Difference between revisions of "The Money Question"

Revision as of 10:46, 22 February 2007

THE MONEY QUESTION A Debate from [1]

Resolved: Money to motivate real economic growth should be spent by government to establish economic democracy.

Economic democracy can be defined by President Franklin Roosevelt's Second Bill of Rights [2].

   * It provides individual economic security through full employment, fair wages and prices, benefits, retirement, a home, an education, care and recreation.
   * Without economic democracy, political democracy is far too vulnerable to scarcity and drift into wage slavery.

Whenever the minimum and median standards of living are inadequate they can be raised by government spending (and lending) to produce and distribute real wealth until adequate or higher standards prevail.

   * This may require subsidized jobs and production.
   * Care must be taken that subsidies are not counter-productive: they must not unleash hyperinflation or otherwise defeat the power of money to motivate work.
   * Subsidies should be paid by government check or direct deposit without increasing taxes.
   * The absence of tax increases will reduce political opposition to such essential spending.
   * Price effects of an increase in the money supply will be minimized if the supply of products for sale increases and private savings divert money from purchasing.
   * If private savings are protected as though they were inflation protected government bonds, they will be very high and prices will remain affordable.
   * High savings will get people out of debt and put them "in the money".

If government spending does not undertake to achieve political democracy, and business is compelled as it is today to externalize all costs to society that escape recording by accident, we may expect the fouling of our planet and the end of the good life for all.

   * Concern is always expressed that if government intervenes in "markets", private industry will buy government favors and the result will be worse than if there were no government at all. But current experience compels us to constantly clean and re-clean government, as the latter drives the economy to perform the miracles technology can deliver.

If government runs short of money as a result of low or zero taxation, together with its central bank it can create more money as needed. It can do this until output for sale and money to be saved reach limits that compel introduction of anti-inflation transactions taxes.

   * Anti-inflation transaction taxes will never be based on private capital or income. They will always target purchases that threaten to reduce production of necessary goods and services.
   * Our current system of income taxation has demonstrated its counter-productive effect on both political and economic democracy.

It should be obvious to all of us that our economic system falls far short of perfection. We have entered the age of robotics and unlimited production of necessities, yet billions of us remain insecure in our jobs, our neighborhoods, and our control of the circumstances facing our children and theirs. Pollution has not been sufficiently abated. Peace has not been sufficiently defended. A handful of crazy terrorists have taken away freedom to trust other people.

It is time to look to the science of reform and to break the bad habits we learned before we could escape the chains of poverty, filth and ignorance that nature has always applied to animal populations that grew too large for their range.