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View Diary: There is NO fiscal cliff. (69 comments)

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  •  By this logic (1+ / 0-)
    Recommended by:
    shypuffadder

    (the government can just print money and spend endlessly), the government shouldn't need to take in tax revenue at all...if it can just create value out of thin air, why does it need to collect taxes at all?  

    •  to offset inflation (3+ / 0-)
      Recommended by:
      illinifan17, jellyyork, splashy

      nt

    •  because money would be worthless (5+ / 0-)

      you only want to print new money to keep up with a growing population. Otherwise you can get run away inflation.

    •  Money is a measurement tool. It's like an inch or (10+ / 0-)

      a centimeter. It symbolizes value, but it is not worth anything in itself.
      Imagine hoarding inches or centimeters.

      But, you say, people trade and exchange money.  True.  People also trade and exchange used postage stamps.
      Some people like to accumulate stuff.  For some people it becomes obsessive.
      It's fine. It's not a problem. Unless the rest of us make their obsessions significant. It doesn't matter if people hoard money, as long as the Congress doesn't exploit that by claiming there's not enough money to do what needs doing.

      We organize governments to provide benefits and prevent abuse.

      by hannah on Sat Nov 10, 2012 at 09:14:07 AM PST

      [ Parent ]

    •  You misunderstand the diary if you think that (6+ / 0-)

      follows from the logic laid out. The effectiveness of printing money is obviously constrained by legitimate economic demand. That doesn't mean the government can only use existing money, but it doesn't mean they can print more money than what's needed to sustain market conditions without diminishing its value. A government paying its own bills exclusively with printed money obviously falls outside the confines of legitimate economic demand.

      You must understand that the government here doesn't print money at will, but to respond to lending pressures exerted by banks that are part of the Federal Reserve system. Drawing an analogue with a country that actually does print money willy nilly (e.g. Zimbabwe in the 2000s, Yugoslavia in the 1990s) and the consequences therein is inaccurate because the Federal Reserve operates in a different manner --- and under different circumstances --- than the central banks in countries where monetary policy is more centralized.

      Compassion is not weakness, and concern for the unfortunate is not socialism.

      by Zutroy on Sat Nov 10, 2012 at 09:21:21 AM PST

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    •  to give state money it's value: If you have to (8+ / 0-)

      pay taxes and the only currency accepted by the gov is dollars, then you will work to earn those dollars.

      Also, as another person said, to cool off the economy if it gets too hot, ie, too prevent inflation by reducing the amount of dollars in circulation.

      When you pay taxes, those dollars are destroyed.  Poof, gone, thus reducing the amount of dollars in circulation, thus reducing inflation.

      •  Yes, and thanks to modern technology, we (1+ / 0-)
        Recommended by:
        katiec

        already have the capability to raise and collect taxes at a moment's notice. All we need is a universal payroll system.

        Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

        by hestal on Sun Nov 11, 2012 at 06:00:19 AM PST

        [ Parent ]

    •  The need for government deficits (2+ / 0-)
      Recommended by:
      splashy, katiec

      The need for deficits comes from two sources.

      One is the need for actors in the economy to save. In other words, if the money does not get recirculated, but ends up in a safe lock box in somebody's basement. This savings generally is as a percent of income. These savings act as a buffer stock for an individual entity to tide against bad times.

      The second need for deficits comes from the need to stimulate the economy out of recessions and depressions, and also from the desire of the population to increase their levels of consumption - in other words a better quality of life. This is a macro need, that comes about because of the actions of the entire society (compared with individual need in the first point I made.)

      Thus from a very real perspective, the accumulated deficits of the government can be considered the accumulated savings of the society as a whole.

      The needs for the deficits will fluctuate depending upon the economic conditions. However, as long as the society desires to increase its levels of consumption - either due to an increase in population, or from a desire for improving its standard of living, there will be a need for continued deficit spending on part of the government.

      •  In the case of saving, if the govenment (1+ / 0-)
        Recommended by:
        katiec

        provides an adequate safety net to help those in need work their way through hard times or disasters then the need to save is greatly reduced. In effect, rather than save, we citizens can purchase an insurance policy that will cover our losses when disaster strikes. And obviously, we already have the technical capabilities to do this, we merely need to add things to the range of covered losses. We are very well positioned to transform our society by adopting MMT and adapting existing systems and technologies.

        Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

        by hestal on Sun Nov 11, 2012 at 06:03:45 AM PST

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        •  I've really enjoyed reading your comments. &... (0+ / 0-)

          I assumed you were a woman cuz you're so nice and reasonable :)

          •  No, I am male, but I am old and wise. (1+ / 0-)
            Recommended by:
            katiec

            my mother and my grandmothers were very smart and deeply analytical, and they were all three very, very strong. My father was the smartest man I have ever known. He had only an eighth grade education but he knew so much about so much, he was fascinating, and he understood what was important in life. The first two decades of my life were an intellectual adventure but I didn't know it until I went to college. Forgive me, but anonymity frees one to say what one thinks.

            Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

            by hestal on Sun Nov 11, 2012 at 05:51:59 PM PST

            [ Parent ]

            •  You're a really good writer, and bet you have (1+ / 0-)
              Recommended by:
              hestal

              a really good book in there somewhere.

              •  You humble me, and that ain't easy to do. nt (0+ / 0-)

                Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                by hestal on Mon Nov 12, 2012 at 01:07:15 PM PST

                [ Parent ]

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