For those who follow this group, Money and Public Purpose, this diary won't be anything too surprising for you. However, if you're new to this group you should know that my goal is to so completely change your view of money that your brain will violently reject it, or you'll start questioning everything you thought you knew about money and macroeconomics. If you still want to take that proverbial
blue pillred pill, read on.
I want to present to you a world where one day everyone was working and mostly happy. The next day, one fifth of the population could no longer work. That fifth of the population now had to subsist on handouts from the remaining people that were working. The handouts are barely enough to get food and medicine for their family.
Although this group was told that it was their own fault that they couldn't work, The reason they couldn't work wasn't because they didn't want to. They really did want a job that would get them off of handouts and provide a life beyond just surviving. The reason they couldn't work also wasn't because their jobs were irrelevant. Many of them were police, and there was still crime - it was, in fact, rising. Many of them were teachers, and there were still children who needed to learn. Many were factory workers, and people still wanted the stuff they manufactured. All of them still had talents to offer the world, but they couldn't... for some reason.
The tools that the people used to do their jobs are also still present. The cars the police used to patrol the neighborhood still exist, most of the school buildings and text books still exist, even much of the factories are still standing - in fact industrial potential is at it's highest for this land. And yet, these people cannot work. Maybe they forgot or are unable to do their job? No, they are still medically sound. There was no mass amnesia that keeps all these people from going to work and earning a living.
Many of them couldn't understand why they weren't allowed to work. Therefore, they started to educate themselves on why they couldn't. Eventually, they figured it out. There was a box - a very big box - with a whole lot of numbers in it. The day before, when everyone was working, the numbers in the box were very large. Today the numbers in the box were much lower and that was why they couldn't work.
For most, this explanation of why they couldn't work made perfect sense. "Well, if the numbers in the box aren't very high, then how can I possibly work?"
A few however questioned it. "Why don't we just make the numbers in the box higher?"
This suggestion was greatly upsetting to everyone else. Those who were lucky enough to still be working as well as many who weren't. The supporters of the box shouted, "You can't just change the numbers, what a ridiculous suggestion!" The vehemence, anger, and confidence in their voices dissuaded some from asking followup questions.
However, A few brave souls were undeterred and kept asking. "Why not? What would be so bad?"
While some supporters of the box got quiet, the others got even more angry. "Because! If you raise the numbers in the box, it'll make all the other numbers worth less!".
"But the numbers were higher yesterday. Why will today be different? Why can't they be higher today so we can all go back to work?"
Before walking away, the supporters of the Box. "You're ignorant and don't understand. If you mess with the numbers in the box you'll just screw it up and leave us all poor and jobless."
"Aren't we already poor and jobless?" they said back, but it was too late. The supporters of the box had already left.
So how does my little fairy tale apply to today? Lets talk about the global financial crises of 2008. The global financial crises of 2008 was a fascinating event. The entire financial sector crashed. Trillions of dollars of money disappeared seemingly overnight. When all that money disappeared, apparently, so did our ability to manufacture goods, grow crops, and heal the sick. Even simple things like our ability to live in a house or go to the gym was lost. Considering that 90% of the world's dollars exist in electronic form, it means most of the money that disappeared was in the form of digital bits and blips on a giant computer inside of a box.
If aliens landed on earth tomorrow and started asking about our society, can you imagine trying to explain to them that the reason almost a fifth of our ready, willing, and able workforce isn't working is because, literally, a box or two doesn't have the correct numbers to allow us to work? They would get back in their spaceship and leave the planet forever due to the lack of intelligent life.
After reading this, you might think I'm advocating we do something silly like get rid of money or completely stop taxation or deficit spend until we achieve hyperinflation. I am not. Right now, I'm not suggesting anything. My only goal for this post is get you thinking about the difference between the REAL economy and money. To start questioning the things we've been told by mainstream economists. To start thinking about things that ACTUALLY hold back an economy.
If you come to the conclusion that it makes perfect sense that numbers in a box can keep us from working then, thanks for reading please continue on to the next daily kos diary without a second thought - I won't be offended. If, on the other hand, you find it quite silly that a box with numbers in it is preventing us from achieving prosperity then I ask that you learn more about Modern Monetary Theory(MMT for short). You can learn more by following our group, Money and Public Purpose, and reading our past diaries. You can also learn more by going to the MMT Wiki. Finally, if you're really ambitious you can read Warren Mosler's book, 7 Deadly Innocent Frauds of Economic Policy, for free by downloading the PDF. A print version is available for a cost.
If you continue, expect to learn:
How our modern monetary system actually works and how it's different from how everyone thinks it works.
How to achieve full employment with zero long-term inflation
How to resolve the so-called debt "crises" once and for all without breaking the economy
Why QE1 and QE2 neither fixed the economy nor caused massive inflation
Why the federal government can deficit spend 1.4 trillion dollars last year without causing mass inflation
Why the United States debt issues are different from Greece, Ireland, etc... and are therefore less problematic
Why U.S. bond sales will never fail.
Why U.S. interest rates aren't sky high.
and much much more...