Johansen's Third Rule: Like all toxic substances, government is subject to the J-Curve.Diogenes wrote: Taxation/Government is a necessary evil, but beyond a certain legitimate percentage, it transforms into just plain evil.
Manufacturing Poverty
Three of the most dangerous words:Skipjack wrote:As with everything else in life, it is good as long as it is done with moderation. Extremes one way or the other are usually bad...Taxation/Government is a necessary evil, but beyond a certain legitimate percentage, it transforms into just plain evil.
"the government should...".
Whenever someone calls for somebody else to do something be it a government or some private corporation, or some other social entity, one is in the danger of making a deal with the devil.Three of the most dangerous words:
"the government should...".
Not everything governments do is bad. Not everything private corporations do is good. The world is grey... dark grey
What Guernsey Island does is a lot better than what the Island nation of Iceland has done. In Guernsey the government prints the money without debt. In Iceland they just told the international banks to go stick it, they refuse to repay the multibillion dollar loans. You don't hear about it in the news, but Icelands economy is doing very well right now.
CHoff
Thought I'd post a few quotes from past presidents and bankers on the subject of fiat currencies.
"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -Thomas Jefferson, The Debate Over The Recharter Of The Bank Bill, (1809). This prophesy has come true.
"In the Colonies, we issue our own paper money. It is called 'Colonial Scrip.' We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one. In this manner, by creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay, to anyone.
You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury." - *Benjamin Franklin Autobiography
"If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. (in reference to lincoln issuing currency from the US treasury) It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe." - Hazard Circular - London Times 1865
Which was basically a response to this:
"The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power." -*Lincoln Abraham Senate document 23, Page 91. 1865
"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -Thomas Jefferson, The Debate Over The Recharter Of The Bank Bill, (1809). This prophesy has come true.
"In the Colonies, we issue our own paper money. It is called 'Colonial Scrip.' We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one. In this manner, by creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay, to anyone.
You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury." - *Benjamin Franklin Autobiography
"If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. (in reference to lincoln issuing currency from the US treasury) It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe." - Hazard Circular - London Times 1865
Which was basically a response to this:
"The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power." -*Lincoln Abraham Senate document 23, Page 91. 1865
CHoff
I'm afraid I have to disagree with those great men. The value of currency naturally varies in proportion to the marketplace, and inversely with the quantity of currency in circulation. The quantity of money in circulation is rarely a problem, unless it be in units too large. A rapid change in the value of currency, however, is universally ruinous. For most of the history of the US, monetary policy has kept the rate with which the dollar changed value small enough to not be a problem.
I agree that the quantity of money in circulation isn't the problem. The Fed created over $7.7 Trillion and gave it to the largest banks in the U.S., Europe and Canada with little change in value. European banks have even been creating US currency to cover derivative risks.hanelyp wrote:I'm afraid I have to disagree with those great men. The value of currency naturally varies in proportion to the marketplace, and inversely with the quantity of currency in circulation. The quantity of money in circulation is rarely a problem, unless it be in units too large. A rapid change in the value of currency, however, is universally ruinous. For most of the history of the US, monetary policy has kept the rate with which the dollar changed value small enough to not be a problem.
The value against other currencies is largely related to the self regulating balance of trade.
The problem comes when private companies have monopoly control over both the quantity and price of the national currency. Corporations do not work in the interest of the general public. They work to create maximum profit for the shareholders. Who do you think has majority control of the shares in federal reserve banks, the Fed is not a public institution, look it up.
Think about it, if you have monopoly control to create a nations currency, and control over the prime interest rate, you are the ultimate inside trader. You have the power to manipulate markets to the advantage of your business partners and exclusion of everybody else.
If you don't want to believe that's exactly what's been happening all along then I can provide you with the quotes of not so great men(bankers).
You might want to look up what Edison and Ford had to say about it.
CHoff
Agreed, but as I wrote before I think the issue of what the government spends money on is separate from how it funds that spending. And I think continuing to pile up sovereign debt is a worse option than either taxation or printing money for the latter.Diogenes wrote:Taxation/Government is a necessary evil, but beyond a certain legitimate percentage, it transforms into just plain evil.
Sovereign debt can pile up for years, then hit with a vengeance when the ability or intent of the debtor government to pay comes into question. Printing fiat currency is less likely to have such a severe delayed sudden impact. The inflation impact will usually be felt as the currency enters circulation.
Even the kids get it.
http://www.globalresearch.ca/PrintArtic ... leId=31125
In 1993, the Auditor General noted in his annual report:
[The] cost of borrowing and its compounding effect have a significant impact on Canada’s annual deficits. From Confederation up to 1991-92, the federal government accumulated a net debt of $423 billion. Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.
In other words, 91% of the debt consists of compounded interest charges. Subtract those and the government would have a debt of only C$37 billion, very low and sustainable, just as it was before 1974.
In 1974 the Canadian national debt stood at approx. $18 Billion, so we added less than $20 Billion in actual spending in the next 20 years but close to $380 Billion in compound interest. At one time I saw another figure of close to a trillion in debt payments by 2006.
I suspect it would have been a whole lot cheaper for the Canadian government(and taxpayers), to have the BoC create less than $2 Billion in fiat currency and credit per year to cover shortfalls in taxes from 1974 to 1993.
This of course assumes Canada actually needed an additional $20 Billion to cover revenue shortfalls. In the '70s Trudeau era, a lot of idiotic government programs created the net imbalance. In hindsight, this seemed deliberately manufactured, a la "Confessions of an Economic Hitman." Created to enslave the country in an endless cycle of debt.
What would be interesting to find out, is what percentage of the U.S. gross national debt is actual shortfall in revenue since either 1776 or 1913, and what percentage is compound interest from the same time, also the total of all debt payments from the founding.
http://www.globalresearch.ca/PrintArtic ... leId=31125
In 1993, the Auditor General noted in his annual report:
[The] cost of borrowing and its compounding effect have a significant impact on Canada’s annual deficits. From Confederation up to 1991-92, the federal government accumulated a net debt of $423 billion. Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.
In other words, 91% of the debt consists of compounded interest charges. Subtract those and the government would have a debt of only C$37 billion, very low and sustainable, just as it was before 1974.
In 1974 the Canadian national debt stood at approx. $18 Billion, so we added less than $20 Billion in actual spending in the next 20 years but close to $380 Billion in compound interest. At one time I saw another figure of close to a trillion in debt payments by 2006.
I suspect it would have been a whole lot cheaper for the Canadian government(and taxpayers), to have the BoC create less than $2 Billion in fiat currency and credit per year to cover shortfalls in taxes from 1974 to 1993.
This of course assumes Canada actually needed an additional $20 Billion to cover revenue shortfalls. In the '70s Trudeau era, a lot of idiotic government programs created the net imbalance. In hindsight, this seemed deliberately manufactured, a la "Confessions of an Economic Hitman." Created to enslave the country in an endless cycle of debt.
What would be interesting to find out, is what percentage of the U.S. gross national debt is actual shortfall in revenue since either 1776 or 1913, and what percentage is compound interest from the same time, also the total of all debt payments from the founding.
CHoff
It probably was. Think Cloward-Piven strategy. Or it simply could be idealism run amok. Either one is bad.choff wrote:Even the kids get it.
http://www.globalresearch.ca/PrintArtic ... leId=31125
In 1993, the Auditor General noted in his annual report:
[The] cost of borrowing and its compounding effect have a significant impact on Canada’s annual deficits. From Confederation up to 1991-92, the federal government accumulated a net debt of $423 billion. Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.
In other words, 91% of the debt consists of compounded interest charges. Subtract those and the government would have a debt of only C$37 billion, very low and sustainable, just as it was before 1974.
In 1974 the Canadian national debt stood at approx. $18 Billion, so we added less than $20 Billion in actual spending in the next 20 years but close to $380 Billion in compound interest. At one time I saw another figure of close to a trillion in debt payments by 2006.
I suspect it would have been a whole lot cheaper for the Canadian government(and taxpayers), to have the BoC create less than $2 Billion in fiat currency and credit per year to cover shortfalls in taxes from 1974 to 1993.
This of course assumes Canada actually needed an additional $20 Billion to cover revenue shortfalls. In the '70s Trudeau era, a lot of idiotic government programs created the net imbalance. In hindsight, this seemed deliberately manufactured, a la "Confessions of an Economic Hitman." Created to enslave the country in an endless cycle of debt.
What would be interesting to find out, is what percentage of the U.S. gross national debt is actual shortfall in revenue since either 1776 or 1913, and what percentage is compound interest from the same time, also the total of all debt payments from the founding.
As mentioned, from 39 to 74, all Canadian government borrowing was done entirely from the 100% government owned BoC, so all BoC profits from such loans were paid back into Canadian government revenue as dividends, the national debt was flatlined at $16 Billion to $18 Billion the entire period.
During that time the government had to pay for WW2, the national highway system, coast to coast railroads, St. Lawrence seaway buildup, plus healthcare.
The complaint has been made that a fiat currency issue is a hidden tax, it devalues existing money. Every time a bank issues a loan or mortgage they create an issue of money backed only by the banks good name, this is also a hidden tax that devalues existing money.
So, in order to provide for a shortfall of $37 Billion over 20 years the Canadian government had the private banks create $400 Billion, a hidden tax that devalued currency that existed previous.
My arguement would be, a much smaller hidden tax would be to create one or two Billion in fiat credit per year over the same period. Since it would be issued by the BoC and not drawn from private banks, no deficit would ensue.
This would be a much, much smaller hidden tax on existing wealth. Remember, the $400 Billion number doesn't include retired government debt, only the current standing national debt. When you add up the percentage of collected taxes paid toward debt per year over the whole period, the number is much higher.
I used to think the Trudeau Liberals were simply misguied lefties, now I believe at the core it was deliberate evil.
During that time the government had to pay for WW2, the national highway system, coast to coast railroads, St. Lawrence seaway buildup, plus healthcare.
The complaint has been made that a fiat currency issue is a hidden tax, it devalues existing money. Every time a bank issues a loan or mortgage they create an issue of money backed only by the banks good name, this is also a hidden tax that devalues existing money.
So, in order to provide for a shortfall of $37 Billion over 20 years the Canadian government had the private banks create $400 Billion, a hidden tax that devalued currency that existed previous.
My arguement would be, a much smaller hidden tax would be to create one or two Billion in fiat credit per year over the same period. Since it would be issued by the BoC and not drawn from private banks, no deficit would ensue.
This would be a much, much smaller hidden tax on existing wealth. Remember, the $400 Billion number doesn't include retired government debt, only the current standing national debt. When you add up the percentage of collected taxes paid toward debt per year over the whole period, the number is much higher.
I used to think the Trudeau Liberals were simply misguied lefties, now I believe at the core it was deliberate evil.
CHoff