Eunoli Rain

The credit rating of any government is key to their ability to borrow (which is a neccesity for the US right now, like it or not).

If the US was to start summarily dismissing fees and not paying bills, it is highly likely that they would be downgraded again (as they were last year and as they are likely to be soon). What that means is that the new rating would either be AA or even just A+ and that interest rates would rise. This is a consequence that would have world-wide implications and be extremely harmful to a delicate recovery and economy. Purposefully not paying any of a country's bills is a step akin to shooting itself in the foot - especially when they are hugely in debt already.

Jahar Aabye

Got a source for that? Wikipedia says 11 with 1 in rezerve and 3 under construction (keeep in mind that when the ones under construction are completed, they are likely to replace ones currently in service, and the one in reserve is old and obsolete).

ETA: http://en.wikipedia.org/wiki/List_of...ers_in_service

My understanding for why there are so many is that we usually have 3 carriers on station at various hot spots (Persian Gulf, South Pacific, and one more I can't remember), with another three rotating out to replace them and anothrr three coming in for service at any given time. Thus to be able to continuously deploy carriers to three spots, you need 9 carriers.


I know, we get the worst ROI for any empire in Earth's history. The British at least got to tax their colonies and claim them as part of their empire, and conscript soldoers locally to fight wars. We wind up having to pay for our own military bases and we don't even get to colonize the countries.

Man, you Europeans had it so much easier back in the days when you could have empires and not care about human rights or any of that.

Ok, in a less facetious tone, I'll say that I really wish we could pull back a lot of those troops and save some money that we could then spend on important domestic investments like health care. Unfortunately, a lot of those foreign deployments are based on treaties and alliances with other nations. Let's imagine what happens when America pulls back all our foreign military bases. Will the world revert to its completely peaceful pre-USA state? You know, the world as it existed solely in people's imaginations. Or would the result be an arms race as one-by-one those nations began building up their own militaries, and their neighbors followed suit in reaction?


I mean, somehow every time that the major empires of times past withdrew or collapsed, somehow world peace did not seem to be the result. I'm not sure what makes people think it would be different this time.

__________________
He pulled a Captain Ahab and Jaharpwn'ed her. - Trout

Sonja Aeghin

Nature abhors a vacuum. Empires have been replacing one another as would-be hegemon since the time of Nebuchadnezzar II and likely even before. Babylon overthrows Assyria, the Persians and Medes overthrow Babylon, Alexander's Greco-Macedonian empire conquers Persia, the Romans capture what's left, etc. etc.

eighthdwarf Checchinato

BULLSHIT. 1) Countries aren't companies, so ratings for countries are bullshit. Who even gives a damn fuck about what some self-appointed gamblers declare? Who are these "raters" anyways that they even DARE to judge over entire countries? Have they been appointed by the people? No. have they been appointed by the senate or any other government they are judging? No. They are only some little profit-hungry leeches and parasites who simply want their "5 Minutes Of Fame".
2) It's always been that each country has the power and is entitled to print their own money, as much as they need, als soon as they need, and still have it keep the same exchange rate to other currencies. The US could print trillions of trillions new Dollars and still say the exchange rate to Euro or Yen stays the same. That they don't do that, is simply because they put currency on the market like any other ware. Because they allow that bankers and gamblers tell them what to do, instead the other way around.
If it weren't for these unnecessary ridiculously high costs caused by US-led wars and invasions and US-caused armed conflicts, and the ridiculously idiotic tax cuts for the rich and for companies, the US would have the ability to live completely autark, without borrowing form others - and would still strive.

you don't need any of these nine. Not a single one.
Pull the entire military and all military contractors out asap and bring each and every soldier, civil military member, civil contractor, secret agent, mp and whatever home; force the arms industry to change their product range nearly completely to civilian products and services (and yes, I mean, FORCE them!), and punish them severely if they even attempt to deliver as much as a spare part for a weapon or military vehicle, or a shell of a bullet into ANY other nation - and be it to, or via one of their dependancies abroad; make these - then former - military people actually serve their country by doing civil, actually useful work within the country instead of destroying lives and property abroad: give them useful jobs everywhere: schools, healthcare, infrastructure, housing, industry etc and FORCE the companies to make it possible that everyone gets a job and keeps it, and can live from the wages even of a 6h job. FORCE them to accept unions and similar organizations.
And no, being cannon fodder in unnecessary invasions is not equal to serving the country.


You can if you want to. Alliances and treaties, the USA blackmailed the other countries into to make them more dependant in the first place. Neither nor.
But it's not the business of the USA if some country abroad has an election leading to a socialist government instead of a capitalist one. It's not the business of the USA if a country nationalizes their industry. It's not the business of the USA if a country chooses to revert to a stone-age theocracy. It's not the business of the USA if a country calls other countries for help against some separatists.


If there hadn't been other countries and nations involved in the destabilization of these empires and invading them after that, world peace would have been the result for at least a century already.

As I said: It was always other countries invading or influencing these countries. If these "empires" had been left alone, the People in there would have formed a new government by themselves. No war necessary.

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Wrong Weatherwax

To a point, some of this is true. However, while yes, a nation like the United States practices monetary sovereignty and is able to print at need, there are still the very real constraints of inflation and deflation to consider. Just because they "can" print exorbitant amounts of money doesn't mean that the effects are somehow mitigated by fiat of exchange rates. The Eurozone, however, doesn't enjoy the similarly pertinent monetary effects since individual nations in Europe are currency users, rather than a concentrated issuer. You are also somewhat right about rating agencies, however, don't jump too far ahead and assume that the ratings given are without effects. While the US isn't reserve constrained, you still have to balance the idea of perception. No matter the operational realities of sovereignty, if everyone "thinks" your rating is crap, then you are going to be dealing with crap.

And really, despite the perception of "borrowing" the US doesn't borrow money. As you noted, there is no need for this to happen since the US enjoys monetary sovereignty, rather it is self-imposed restraints placed at the Congressional level that ensures this exchange happens, giving the appearance of necessity to "borrow." While there are many, yes, holders of US bonds, monetary sovereignty means that like Japan, the US is unaffected by any bond vigilantism. So when those bonds are "called in" a reserve shift happens between accounts at the Fed level, exchanging liabilities for assets without changing the actual money supply.

That said, Eunoli is correct. A country who suddenly decides to pursue their paradigm goals by fiat, without due consideration to the private markets they do business with is an assured creator of the perception of inability or unwillingness to pay. While the Federal Reserve can still set asset prices for bonds, if no has confidence in the fundamentals of the monetary supply, then renters will seek other holdings, exchanging dollars for other avenues. This WILL create a system of public failure. Furthermore, contract law is one of the foundations and cornerstones of the US legal system and revoking that assured protection through sudden seizure (or severance without redress) will further erode confidence in the market AND the justice system.

__________________
An education was a bit like a communicable sexual disease. It made you unsuitable for a lot of jobs and then you had the urge to pass it on. -Terry Pratchett

detrius

That list only includes the Nimitz-class carriers and the Enterprise, but you easily get at least 20 carriers if you also count helicopter carriers or amphibious assault carriers.

The Brazilian aircraft carrier Sao Paulo has a lower tonnage than the average Wasp-class amphibious assault ship (32,800 (full load) vs. 41,150 t).

A Nimitz-class carrier has a displacement of >100,000 t.


So, in fact, your 'light' carriers alone would be more than a match for the combined aircraft carrier fleet of the rest of the world, and that doesn't even take into account the 10-11 remaining supercarriers or the United States' technological edge.

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Nibb Tardis

The US Navy has 11 supercarriers and 9 LHA/LHDs, which are equivalent in displacement and projected firepower to the aircraft carriers of the rest of the World (especially once they are equipped with F-35s).

Each supercarrier has a displacement of 100 000 tons. The French aircraft carrier is only 42 000 tons, which is equivalent to a Wasp-class.

If you count in tonnage, then the US carrier fleet is 3 or 4 times the rest of the World. Is that really necessary?

Maybe one in each hot spot would be enough. With an escort fleet, it would still project more power than any potential enemy would ever dare to challenge.

eighthdwarf Checchinato

! What's wrong with deflation despite a higher amount of circulating CASH money? When it lead to prices like back then when a gallon of fuel at the gas station was less than $0.49, what would be wrong with that? When people could life from their salaries -- but also no-one earned 10s or 100s of Millions as a board member? What would be wrong with that?
What's wrong with the idea of forcing banks to back up all money 1:1 with CASH instead of debts, so that banks had to cover each and every cent they give out with real existing cash instead of the signatures of debtors? Oh! They couldn't invent money anymore! The interests would drop! A catastrophe, no profits anymore for the gamblers! I'd say, SO WHAT, the less profit gamblers can make, the better!

Did you know that less than 5% of all circulating money is actual cash? The other >95% are virtual money, nothing more than promises to pay. Just as real currency as L$.
I'd say better the government prints exorbitant amounts of money and gives everyone the chance to pay off their debts asap - than private banks invent exorbitant amounts of money through debts and keep everyone in debt through interest.
I always said the Euro belongs gotten rid of.
The governments in the Eurozone showed their submission to the industry and banks by allowing to introduce it in the first place. "La kajira, company X/bank Y" - for all who don't know what that means: "I am slave". Is that what a government should do? Submit to the will of banks and companies? No! A government has to serve the People, not companies - and no, companies are NOT people. And serve it shall, not as a slave, but as a team of trusted employees with rights, even privileges, and duties towards their employer: the People.
Everyone? Or rather just the gamblers and criminals at the Stock Exchange? And yes they are criminals in my book. All of them, including those self-entitled "rating agencies".
If the US government said "From Today on, the Dollar will stay at the same exchange rate to all other currencies as it has today at 12pm EST", then it wouldn't matter how much actual CASH (= printed money) is around, because the exchange rate wouldn't change no matter what. It would always stay at "x" Euros, at "y" British Pound, at "z" Yen etc. It's just that the US government idiotically allows the Dollar to stay on the stock market where it can be gambled with by the traitorous criminals there. And yes, I consider each stock exchange broker a much worse traitor than any whistleblower who sends data to wikileaks.

Fuck the private market! If they protest, nationalize them, as easy as that: it takes a signature on a paper to do that.
Company 1 wants a bailout despite making profit and paying its managers Millions on salary? Nationalize it and arrest the board members for fraud.
Company 2 manipulates their books to pay less taxes and still mourns the taxes for companies are too high? Nationalize it and arrest the board members for tax fraud.
Company 3 sends lobbyists to bribe and/or blackmail Politicians? Nationalize it and arrest the board members and lobbyists for their bribery and blackmailing.
Company 4 openly spreads lies and broadcasts speeches that include death threads to the President? Nationalize it, and arrest the board members for traud and treason.
Company 5 hands out credits worth Billions but has only a few Millions in cash to back these credits up? Nationalize it and arrest its managers for fraud.
Company 6 dares to move their headquarter to the location of some minor dependancy abroad? Get them for tax evasion and fraud, and nationalize their assets.
Company 7 fires most of its employees and closes effectively down after being bought by some gamblers? Arrest those gamblers and their appointed managers for theft and fraud, nationalize the company and open it up again.
Company 8 uses the money paid by its custumers for private profit instead of delivering the service it is supposed to deliver? Arrest the managers for theft and fraud, and nationalize the company. Easy as that.
The side effect of such strict reglement would be that no company even dared again to even try to make an attempt of influencing the politics or economy of the country, or risking health and life of the People for profit. Yes, it would basically lead to a different kind of economy, but what's wrong with that?
You have confidence in the market? As long as the market is not strictly controled by the government with a strong hand, and as long as currencies, companies, and estates are gambled with as if it were chips on the Roulette table, I have no confidence in it.
The managers or board members of a company go out of their way and bribe or blackmail or threaten the government, rob their customers off, gamble with their customers' money instead of their own, refuse to pay taxes, refuse to pay reasonable wages to the employees but pay Millions to themselves instead, risk the lives of people intentionally? Off they go to jail, and all their assets, including the company, become state property or national property.
All it takes is a government with a SPINE.

Rosemaery Lorefield

Wow.

Well, whether you give a damn fuck about it, that is the way it is.

Sonja Aeghin

As long as it doesn't spiral out of control, nothing whatsoever. As an advocate of a modernized Freigeld I actually want a high-velocity, perishable, negative-interest currency. Such a currency is inherently deflationary. The hoarding of money needs to be made unprofitable. There already is more than enough money in existence, but the flow and distribution are so lopsided that in the absence of a credit bubble there's a huge liquidity problem that can't be solved with conventional monetary policy.

Wrong Weatherwax

Because that fantasy of yours leads to the absolute destruction of value of every piece of property invested in before that date. Inflationary and deflationary effects uncontrolled by a loss of confidence in a system is what lead to the devastating effects of the Werner Republic and Zimbabwe, of post-Revolution Russia. Money creation, if controlled carefully can help mitigate the damaging effects but the creation of instability through loss of confidence combined with inflation/deflation on such a broad scale is empirically, a recipe for disaster.

And back up debts with cash? What does that mean? Cash is merely paper, convertible and acting as a system of exchange. Unless you are talking about moving to a system in which commodity backed exchange (another operationally risky idea) then there is little actual difference between IOUs and Cash since both hold the same perception of return as the other. Furthermore, removing interest is one of the primary drivers of vertical wealth (and money) creation in ANY functioning economy. Without its encouragement, what point is there in investment, in savings? Should someone seeking to plan for their future merely drop money into a saving account with no actual ROI to have taxes slowly but surely destroy that savings? Of having inflation eat it without the balancing act of interest investment? You are naively railing against the EBIL corporations but forget that you'd be destroying the hard work and investments of many smaller investors and retirees just to make your point.

And in doing so you'd destroy the underpinning of society, removing the investments of many people you supposedly want to protect as everything they own becomes essentially valueless. This is the promotion of the same sort of pipe dream that anarcho-capitalists pursue with their black and white maxims about a totally "free economy" both holding no value to the previous state of affairs, wishfully enacted so that someone has their own collective paradigm-ic orgasm.


/rant?

Yes, everyone. What do you think underpins the basic investments of almost every retiree and those with retirement plans in the United States? Government T-bonds, whose values are ultimately connected to the overall perception of the value of the monetary supply and shaped by the outcomes of perceptive abilities of the Congress regarding fiscal policy? Yeah, you don't like banks, corporations, etc, that's great, but your fantasy land would essentially destroy the hard work of every individual in the US who thought it would be a good idea to save for their future and ensure a rate of return in greater excess than their opportunity costs. And again, if you think that somehow setting a fixed exchange rate would matter in the least then you've never studied the after effects of economic disaster called hyperinflation.

All it takes is a government willing to rule by fiat you mean?

Jack Belvedere

Thank you for your service, Siggy.

I'm anxious to see how the cuts affect my local economy. We are home to the only active US foundry, with the Arsenal in Illinois and it provides about 7-8,000 jobs locally.

Wrong Weatherwax

Different animal though isn't it? While I can see the advantage (and the creation of money-like instruments such as bitcoins) the operational distinctions still ensure measured control through transactional costs. Deflation then isn't a matter of immediate contraction a la' the Great Depression, but a systematic and slow restructure without the loss of confidence. As long as the quality of life doesn't change in that case and purchase parity increases, it wouldn't matter if the prices were .05 or 5.00 dollars for a gallon of gas. It would however make hoarding money (and the effects of income disparity) less destructive and less likely.

Interesting ideas, but it seems to be based primarily on the reserve, fractional reserve idea of bank lending, when banks don't actually lend reserves (except to other banks).

eighthdwarf Checchinato

FIFY

Otherwise, I agree.

Brenda Archer

I'm no economist, but here's a naive idea that has been going around in my mind for some time. Sometimes people romantically wish they could go back to the gold standard in the hope they could cut down on our current corruption. But why stop there? Trusted actors could back currency with any kind of storable, valuable commodity. Platinum... hard winter wheat.... weapons grade plutonium... grams of cocaine....

Such commodities could move in value relative to each other, which gives some flexibility and allows conversions when necessary. If someone wanted to bring a new currency to the table, they would also have increased the overall value of the money supply, so I don't see this being deflationary in the long term as long as the market correctly agreed on the value of a currency.

Would it work?

Sonja Aeghin

Such ideas crop up in the economic press and blogosphere occasionally. Going back to the gold standard is simply a no-go. There's too little gold and the rigidity of the gold standard hinders central bank flexibility when it would be needed most. More reasonable proposals usually center around energy commodities such as oil and gas. This would require driving retail investors out of commodities markets altogether for the sake of stbility. In fact, it could be argued that the dollar is backed by oil already because world oil futures contracts are always quoted in USD and only in USD making the dollar the de facto reserve currency and ensuring global demand for dollars. Ending the dollar's dominion as the currency of energy would pose a potential nighmare scenario for the Fed.

Seyla Warden

BRB burying myself in a snow bank, wake me up in 500 years when we're over this whole 'currency' and 'capitalism' thing. Also when I can have a NintendoSphere.

I feel like every day I get more jaded, but I honestly can't see 'the way things are' as anything other than the world's hugest Ponzi scheme anymore; there's plenty of money and 'stuff' out there, it's just that 99% of the people can't have it because the 1% who run things are hoarders of money.

I guess I just fundamentally don't agree with a system that regulates everything by imaginary currency and then proceeds to funnel that currency into the hands of a tiny minority like capitalism.

__________________

eighthdwarf Checchinato

Bretton Woods comes into mind...

Though this pretty reasonable system failed because of the unnecessary WARS the US threw themselves in with their blind insane anti-communist rage, and of course it ended effectively because of the accelatated inflation caused by the unnecessary Vietnam War.

Had the US become neutral after the destruction of Nazi Germany, and stayed out of wars and conflicts as much as possible, had they also quickly pulled back all their military from places where it doesn't belong (eg. Pearl Harbor, eg. Panama) then they would still prosper despite the leeches and parasites (and yes, I do mean the gamblers at stock exchange). But no, the US governments had to play world bully #1, warmonger#1.

You could do an experiment and hand out IOU's whenever you are asked for a hammer or a sandwich or even an hour of work, anything of real value, and claim that "there is little actual difference because both hold the same perception of return". Let's wait how your friends, family members, neighbors, acquaintances etc. react on that.
Ever heard of demurrage, or of Freigeld?
Or for example the Bankhead-Pettengill Bill? Or of the LETSystems?

Tranquility

While I do envy the idealism of some of the SLU members, I can't get past my skepticism that whenever there is a loophole or opportunity to exploit, there is always a human or group of humans willing to sink to new levels of low to take advantage of those loopholes and exploitations.

I know for a fact from doing a lot of business with the government (primarily State level) that the gov. can and will break a contract if it suits them to do so, regardless of the legalities. However, there are many factors in these kinds of decisions. First and foremost is politics. If it will come back to bite the main decision maker in the ass (on a PR level or will jeopardize their job) that is the main deciding factor. Second is money/legality. If it is an amount that would be more money for the contractor to sue than it is worth (if suing costs more than the termination fee), then there is a good chance the contractor will not pursue the termination fees and the gov. is more likely to stiff the contractors on said fees. Third is ambiguity. If you have read any of the gov. contracts or standards, you know there are more gray areas than you can shake a fist at. The gov. will use that every chance they get to either pay less than is fair compensation or remove pay items from a contract or any other shady tactic to benefit themselves.

As for this situation with the military spending, I can only imagine that the politics are going to kill the idea of terminating contracts. First, with billions at stake, you can be damn sure that the military contractors will take it to court. Second when you are talking about that kind of money, you know full well that the military contracting companies have a shit-ton of political sway. Politicians aren't exactly known for being "for the people" kind of characters. With their job/power on the line, you know many unethical decisions will be made and we the people will be the ones holding the shit end of the stick. Just like we did in the recent housing/financial burst.

Finally, as for the idealist notion of ceasing all foreign military involvement, I have no doubt it would cause world-wide chaos. Going back to that wonderful human trait of exploitation topped with a health serving of greed, you know that all those areas that legitimately need foreign military assistance will be fucked over royally. I fear that the amount of people that would end up suffering by that kind of pull out move would be far greater than the current corruption.

It would be nice to live in a world where governments do the best they can to take care of all of their citizens, poor to rich, where money isn't needed and everyone can rely on a decent life for themselves and their children. But all of they depends on people being decent to each other and being able to look past their own personal wants and sphere of influence. In short, it simply will not happen.

bubblesort

Well I am not an economist but I am close to having a degree in economics (one semester away), so...

Fiat currency is more stable than representative money (gold and silver certificates) and commodity money (literal pieces of gold).

Think of it like this:

We are in the US, and lets say we decide to back our currency with natural gas because we recently found a lot of natural gas in the marcellus shale region. This is great while we keep finding natural gas and if we have enough of it to fund the economy, but natural gas is a commodity that goes up and down in value all the time. As it fluctuates it causes constant unpredictable inflation and deflation. We might have a lot of gas now while we are mining the marcellus region, but eventually that vein will run dry or the rock formation will crack and we will have a bigger problem than just half the Appalacians on fire, we will loose the ability to make good on the promises on our currency and the entire economy collapses.

Gas is an extreme example, but gold and silver both fluctuated like that when we used them to back our currency. That is why we use a fiat currency.

A fiat currency is based on the aggregate goods and services produced in a country. An american dollar buys exactly one dollar worth of gold or silver or natural gas or movies or avatar skins. This makes it very stable, predictable and controllable by controlling the money supply through fiscal and monetary policy. A change in a single good or service can not cause inflation in a system like ours (well, some goods like gasoline can influence inflation and deflation, but there are ways of controlling for that).

Fiat currencies protect against damage from disruptive technologies also. In the 1800s it might make sense to base a currency on horseshoes because we produced a lot of horseshoes, but as technologies changed we found less and less need for horseshoes, so continuing to produce them would be inefficient. Since we were not on the horseshoe standard our economy adjusted easily to produce more car tires instead of horseshoes. If we were on the horseshoe standard then people would continue making horseshoes simply because it's a currency, even after people stopped finding horseshoes useful. That would sap resources from more profitable industries and hold us back, making American goods much less competitive. With a fiat currency the government does not try to influence people to keep making whatever good they choose to base the currency on.

Gold is a stupid commodity to base a currency on anyway. It's been fetishized by the markets because of some weird cult-like tradition. It is insanely unstable. It's value is based more on fetish than on use, which is why you will never catch me investing in it. Does gold get any more useful when people go to war or whenever a terrorist attack happens? No. You can still use gold for exactly the same things you used it for before the world got a little more violent. That doesn't stop the price of gold from spiking every time the pentagon looks at somebody funny, though. Adam Smith wrote Wealth of Nations to try to convince mercantilists that this gold fetish was stupid. Some people agreed with them, and we call those people economists, but even now over 200 years later we still have to put up with these crazy mercantilist ideas about gold. We really should teach more economics in high school or something.

Seyla Warden

You heard it here first, invest in bottle caps! I have it on good authority that after the Bomb we'll be using them as currency!

Wrong Weatherwax

I'm not talking about fiat money, I'm talking about ruling by fiat, by decree. The troubling aspects of your list is the removal of the ability of choice in a market system, shifting from demand to command. And yes, I'm all too familiar with Bretton-Woods and am quite happy to promote the fiat monetary system because of the flexibility it offers. I'm a proponent of neo-Chartalist policies in general, particularly of the MMR School. Bretton Woods and the end of the gold standard was an excellent idea, still is, as it effectively and ably has allowed most of the world economies to regulate the relative ebbs and flows of the system without huge troubles. However, this particular business cycle ended approximately at the same time as this debt cycle ended and as world markets began deleveraging from this debt cycle, we've seen a steadied decrease and contraction.

This is more of a political point, rather than an economic one. I don't make economic points from political points simply because they are inherently biased and prescriptive, rather than descriptive of the micro and macro picture. Arguably, the largest problem with ANY economic school of thought from Keynes to Marx to Mises to Galbraith is that their is the supposition that "if we just did it the way I like it, everything would be great." Essentially, pseudoscientific approaches that assume the facts must fit the conclusion rather than the conclusion being derived from the facts.

That's frankly a pointless argument as the IOUs I issue don't have the backing of a monetary sovereign, there is no "Full Faith and Credit of Wrong" but in bonds, notes, government, and bank paper, there is a very real anticipation of that value as a store of value. Money stores a perceived value whether that money is paper or a coin. Heck, to be honest, gold is a relatively valueless metal with little to no intrinsic value but because the perception of stored value exists, gold becomes attractive. Those are the basics of money.

Yes, I've heard of them. Money, unfortunately, doesn't tend to decay in value naturally, rather the monetary supply is based on the perceived worth of the system it works in. That's why the as long as the relative QoL remains stable, it doesn't matter if gas costs 5 dollars or .05 cents as long as parity remains constant. Expectations of cost are factored into the supply and value of money, its why wages tend to be sticky because of the relatively low velocity of that monetary supply. Furthermore, demurrage or Freigeld is still relative to the same effects of any accepted currency, it is only valued by what it can be exchanged for. The purpose of such a system, decreasing the disparity issues would be counter productive in my opinion because deflationary pressures tend to spur more hoarding (the current economic outlook is based on this issue, why spend your savings when the economic outlook doesn't seem willing to improve).

There are however other ways to counter the issue, namely ones that don't increase the risk of a systemic deflationary spiral. Namely the removal of regressive taxation schemes, or taxes that carry their primary incidence on lower income payers. The more effective, just by sheer economies of scale, isn't to target the relative small percentage of hoarders at the top, but to mobilize the much larger economic force at the bottom. Drive the economy up from the bottom without the impediment of regressive taxation and you'll achieve income parity at a much faster and more stable rate. Unfortunately, the only tax cut the US fiscal policy apparatus seems to target is the progressive one, which increases disparity.

eighthdwarf Checchinato

Which would be a good thing.
There have to be strict rules on a market - and be it, like in former times, on the town markets: "No you can't place your shop anywhere you like, you put it where I tell you to place it. And, you'll take the scales and rulers I tell you to use. Plus, you'll exchange the currencies to the exchange rates I give out. And you make the prices and margins that I allow you to make. Oh, and don't forget to pay your market fees, and your storage fees and your taxes after closing your shop for the night, otherwise your shop and your stores with everything in them will be confiscated. Remember, it's a privilege to trade here. You can lose it anytime."
That's the kind of market I have in mind. A market completely controled by the government.

actually my conclusion were derived from the facts. How many roads, firefighter stations, schools from pre-school up to university, hospitals, libraries, care-homes and foster homes, homes for the homeless or the almost homeless, insurances for the unijured, etc could have been covered by the costs of all military spendings and CIA spendings since May 45? I would say pretty much of it since the entire military budget is - as i demonstrated with that chart before, more than 1/3 of the entire federal budget. And that's only the official part.
And how much did the military industry pay on taxes? After all, all of their destructive products (and show me any military product that's not destructive or intended to be used for destructive purposes) - and the results of them - are paid entirely by tax money, tax money that's missing at infrastructure, healthcare, social security, education etc! Tax money that's simply burned, thrown out of the window, destroyed.
So, i'm sorry to say that, but when it comes to "serving the country", each street builder or track welders on railroad tracks, each firefighter, nurse, policeman, teacher, social worker, foster parent or even ecologic engineers have served the country way more than any of those who have thrown their lives and health away as cannon fodder for the profit of some arms company. The firefighters who risk their lives to save people from burning houses? They serve the country much more than any soldier in some unnecessary proxy war abroad. The mother who fights a fruitless fight against greedy and ruthless companies wasting land and water? Much more a hero than any Navy SEAL or whatever "super fighters" the military uses to brag about.


Sorry, but an IOU, a promise to pay something, is not at all the same value as the real thing. When I lend money to someone, I don't accept IOU's: I rather consider this money lost until I get it back. I can't buy my food from promises, I need money for that, real money.I don't mind if you give me a bag full of quarters and dimes, or a bundle of bills - as long as the amount is correct. But a check or a credit card? No way: Go to the bank and get the sum you owe me, then give it to me. Gold valueless? Tell that to the electronics industry. Gold is an excellent conducting medium.

So you think people will hoard regardless, no matter that the money loses a part of its worth due to demurrage? You think they don't care whether or not the $1,000 they deposit at the bank are worth only $900 after a year? And $810 after two years? $729 after 3y? But that these $1,000 would still be worth $1,000 if they spent them to buy goods or services within the first year?

What's wrong with progressive tax rates, starting at an income higher than the wages of an average worker, and going through the ceiling together with the incomes, up to >90% taxes for an income of $1,000,000,000 and above? What's wrong with my suggestion of taxing companies just like persons? After all, a company can earn money too, can hold bank accounts, can own things just like a person?
Throw in some tarrifs, make the companies accept and pay according to them - and some kind of income parity would come pretty soon

Wrong Weatherwax

And it fails, because it assumes that exogenous bodies of government minders are somehow free from the corruption such incredible power brings as it has every single time in the past. Capitalism too has similar systemic corruption problems but there is an avenue of correction, namely through the ebb and flow of the market and the freedom to generate interest through voting by a fistful of whatever the monetary ticket is. Command economies don't work and never will, not just because of corruption but because there is no way for those economies to self-check. Pure Command economics is as big as a blind alley as Pure Free Markets. Both are the playground of ideologues, not economists.

Again, your assumptions don't show me that they were based on the choice to make those decision, your assumptions followed an enforcement of your beliefs on the populace, that's purely coercive. Ethically there is little difference between imposing your will on your countrymen by force based in your personal political paradigm as their is in imposing your will on other countries through the same. You've merely exchanged one form of tyranny for another. The numbers aren't the question in this case, its the corrupt ethical system that assumes its ok to force one ethically suspect system of thought for another.

No, I'm sorry, you are wrong. Pick up a dollar bill, or a US government T-note and notice that it clearly denotes that these bills are reserve notes, a store of value, and the only objective difference between a dollar and a bond is which side of the accounting feature it falls on. Furthermore, you are still proposing the same ridiculous assumption that my check is the same as a currency issuer's bond note, its not, nor will it ever be. A government IOU, as a bond, is accepting the difference in storage value at its call function is the exact same thing as a dollar. That's a fundamental part of the entire monetary structure in the US and in Japan (another currency issuer), its also one of the functions that makes government bonds so attractive to domestic and foreign investors, the pure convertibility aspects of the note.

No, I already explained this, deflationary pressures always cause hoarding because in times of economic trouble, even in a zero interest rate environment (like right now in the US) aggregate demand is of far more interest since without the expectation of imminent recovery, there is little impetus to spend those, which in the case of demurrage, would merely exacerbate deflationary pressure downward. You can't generate demand when people feel they are in a threatened economy, and demurrage is merely supply-side economics for monetary supply. Its an interesting idea but its feasibility loses ground as a monetary exchange point if people can't store value for better days.

Again, you aren't reading. I didn't say there was anything wrong with progressive tax rates. I said that progressive tax cuts are generally the type of tax cuts the US uses in its fiscal policy, which is unfortunate, because now the effectiveness of a progressive (specifically income or capital gains) tax cuts would be pointless. Instead, targeting regression in tax incident would be far more effective.