Cross post on J.K. Galbraith's latest and most important article on money and how it is impossible for a government to run out of money.
http://council.smallwarsjournal.com/...4860#post94860
Cross post on J.K. Galbraith's latest and most important article on money and how it is impossible for a government to run out of money.
http://council.smallwarsjournal.com/...4860#post94860
Couple of things in that article kind of jump out...
If deficits benefit ordinary people, ordinary Americans at this point should be richer than Croesus. While deficit money does end up in people's pockets, the people it flows to are generally a long way from ordinary: the beneficiaries of government spending are generally as small a group as the corporate elite.Deficits put money in private pockets. Private households get more cash. They own that cash free and clear, and they can spend it as they like. If they wish, they can also convert it into interest-earning government bonds or they can repay their debts. This is called an increase in "net financial wealth." Ordinary people benefit, but there is nothing in it for banks.
That's just wrong. The deficit reduction of the 90s was driven not by bank lending, but by an outrageous and unsustainable surge in the valuation (not value) of fictitious "assets", like shares of Infospace or Pets.com. Yes, the taxes levied on fantasy "capital gains" balanced the budget, and the hiring sprees by companies spending invested money ran up lovely employment numbers, but at the end of the day all those lavishly paid employees weren't generating products, services, or revenues, and the captial gains were going to get sucked back into the black hole whence they came when valuation and value had to equalize. The mid to late 90s, I fear, represent one of the most egregious and unnecessary lapses in economic policy in American history. Government could have acted, had the tools to act, but simply didn't want to: bubbles are fun as long as they keep on growing, and if the Nasdaq's going up and the intern's going down, everything has got to be ok. Until it isn't. We're still paying the price...Increased private lending generates new tax revenue and smaller deficits; that's what happened in the 1990s.
Link to article.
http://www.globalresearch.ca/index.p...t=va&aid=18034
Wall Street's War: Congress looked serious about finance reform – until America's biggest banks unleashed an army of 2,000 paid lobbyists, by Matt Taibbi. Rolling Stone, June 10, 2010.
As it neared the finish line, the Restoring American Financial Stability Act was almost unprecedentedly broad in scope, in some ways surpassing even the health care bill in size and societal impact. It would rein in $600 trillion in derivatives, create a giant new federal agency to protect financial consumers, open up the books of the Federal Reserve for the first time in history and perhaps even break up the so-called "Too Big to Fail" giants on Wall Street. The recent history of the U.S. Congress suggests that it was almost a given that they would f@ck up this one real shot at slaying the dragon of corruption that has been slowly devouring not just our economy but our whole way of life over the past 20 years. Yet with just weeks left in the nearly year-long process at hammering out this huge new law, the bad guys were still on the run. Even the senators themselves seemed surprised at what as&holes they weren't being. This new baby of theirs, finance reform, was going to be that one rare kid who made it out of the filth and the crime of the hood for everybody to be proud of.
Then reality set in.
Where is the Church on the issue of Usury? Link to article below.
http://canadafreepress.com/index.php/article/23067
James Galbraith responds to Paul Krugman on how money really works in the USA.
http://krugman.blogs.nytimes.com/201...eficit-limits/
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