We seem to be dancing around the issues a bit, but getting closer.
The idea that paying down or paying off the national debt somehow leads to recession doesn't compute, except to the extent it decreased the money supply. Two different things: debt, money supply. Your response indicates an insistance that there is no money supply w/o debt, which I resist.
In spite of your kind remarks I'm stubbornly trying to address supplying of liquidity directly and accepting a clearly-defined inflation, which is indeed a cost, but less subject to "fuzzy math" of politics: simply x dollars spent, y dollars revenue, y-z=inflationary dollars, and z/total dollars=inflation. This is calculable instantaneously, daily, monthly, quarterly etc., as well as its immediate impact on anything else in daily life, a loaf of bread or wages. The debt, however, is a more insidious second-order number, whose importance relies on economic changes to determine its impact, subject to endless deception and misuse by those who are motivated to contaminate information for the taxpayer.
The idea that direct issuance of gov't payment has "always ended in disaster" might be interesting, but the examples cited refer to disasters already made, not caused by such payments, and it's hard to see how such disasters could have been avoided by the use of a Fed-type system.
Or is that your thesis? If so, it would appear current technology for instantaneous accountability has gone well beyond what may once have been the only way to achieve accountability - the writing of interest-bearing notes.
Perhaps that's the nub of the issue - the best way to manage monetization of excess spending, carefully-accounted debt instruments (with angry bondholders keeping an eye on things), or newly-capable global accounting and take out all the middle men.
As far as the clean and tidy non-profit arrangement with banks, this is a related but a side issue -- there are enormous benefits to handling trillions of dollars, so as a nasty cynic I likewise resist the concept that being a member bank of the Fed is simply a profit-free nuisance undertaken by good corporate citizens. The corp VP in charge of Flows at B/A HQ once gave me a bit of insight into positioning and leverage that goes on among the top banks -- "a license to steal" was how he put it...<VBG>
A more efficient system with current technology for accountability would seem timely. |
