"Debasing the currency" -- One point that gets lost is that spending in excess of receipts always forces eventual reckoning, which without luck and proper leadership leads to those bad things like debasing the currency, unfavorable interest rates, recession/depression.
The difference is the time-frame of the reckoning, the ability to play politics (sometimes for good, i.e. "pump priming"), and how contaminated or concealed the information is from the taxpayer.
The other point is whether the current model of interest-bearing notes is expensive and deceptive in practice, in lieu of controlled direct issuance. The Fed system is a technique for management due to discovered inability to maintain adequate accounting control in previous centuries, when mail was sent by train and computations by pen and pencil. Previously this was do-or-die compared to hyperinflation due to lack of controls, and any cost was trivial. The question is: what is the cost of this today compared to alternatives, now that we're in a $10 trillion economy? There's a significant cost of such deferral when done in the form of $300 billion/year interest payments.
Regardless of the inability of gov'ts to avoid such problems in the past, the heretical notion here is that accounting is now both comprehensive, immediate, and automatically auditable, providing information that is timely and uncontaminated, therefore better options may exist today and deserve to be explored. |
