Lest it get lost in the bickering I have nothing but sympathy and respect for those who’ve lost their jobs and are unable to find work. I don’t have any solutions to offer or, more importantly, jobs (although I’m asked on a daily basis). I’m just trying to puzzle out the contours of a workable solution, I will continue to do so like a dog worrying a bone, and I won’t be discouraged from that.
Amen on the jobs. There are way too many good, decent people who cannot find work. I kind of hate telling people what I do for a living now, as I almost always get asked for a job or help in getting a relative a job, usually a child.
Steve
I think we should all assume decent intentions of the people we discuss/debate with. Assuming the other person is some sort of misanthropic ogre is not going to lead to an informative conversation.
If that were the case 90% of blog comments would never be made.
“If that were the case 90% of blog comments would never be made.”
Overly pessimistic.
A good start toward a solution would be getting past the “public debt crisis” fiction which has paralyzed our response to the problem:
“Reserve accounting uses the standard accounting identities, but the meaning of “liability†is not “debt.†The husband-wife analogy for Central Bank-Treasury accounting relationships is apt. Since a husband and wife are responsible for each others debts, neither can be indebted to the other. That is to say, reserve accounting is a fiction that does not represent real relationships, such as exist between a creditor and debtor in the horizontal system.
Moreover, government debt is not true debt either. At the macro level, the reserves that are transferred to banks through government disbursement are used to buy Treasury’s. That is, when a Treasury is bought, this involves a transfer of reserves from the buyer’s bank’s reserve account at the Fed to the government’s account (consolidating Central Bank and Treasury as “governmentâ€).
When the Treasury’s are sold or redeemed, the reserves that were “stored†at interest are simply switched back, creating a deposit again. It’s pretty much the same as buying and redeeming a CD. It’s just a switch from demand to time back to demand in a bank account, and a switch between reserves and securities at the government level. That is to say, the government doesn’t have to draw on revenue, borrow, or sell assets to cover its “debt,†as households and firms do. It’s just a matter of crediting and debiting accounts on the (consolidated) government books, even though it may appear that there is a financial relationship occurring between the CB and Treasury due to the accounting. However, it’s just a fiction.”
via Warren Mosler
http://pragcap.com/the-concept-of-vertical-and-horizontal-money-creation