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Re: point of Georgist/MMT convergence

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  • Scott Baker
    Argh, it is getting boring debunking your unsupported sandbagging.  Please read the previous attachment (attached again) and give me just a little credit, and
    Message 1 of 145 , Sep 27, 2011
    Argh, it is getting boring debunking your unsupported sandbagging.  Please read the previous attachment (attached again) and give me just a little credit, and those whom I quote, for having thought of the obvious rejoinders before you came up with them. 
    Anyway, see below...again.  Sigh.
    In the ever-optimistic hope of a breakthrough in understanding, I'm going to open this discussion up to some discussion groups I belong to.  Maybe they can marshal arguments I haven't thought of.

    From: Warren Mosler <warren.mosler@...>
    To: Scott Baker <ssbaker305@...>
    Cc: Jerrit Erickson <jerrit@...>; Scott Fullwiler <scott.fullwiler@...>; "jgriesgraber@..." <jgriesgraber@...>; "Wray, Randall" <WrayR@...>; RogerErickson <rge@...>; Aussie Employment - Bill Mitchell <bill.mitchell@...>; WilliamK. Black <blackw@...>; Dr.Jan Kregel <jankregel@...>; AparnaBio -Martin Woodle <mwoodle@...>; Maj. Don Vandergriff <vandergriffdonald@...>; Col. Gary Wilson <wilsongi@...>; stevenhansen <mshaganes@...>; UnionCollege Economics - Brad Lewis <lewisb@...>; Ellen Brown <ellenhbrown@...>
    Sent: Tuesday, September 27, 2011 11:35 AM
    Subject: Re: point of Georgist/MMT convergence

    On Tue, Sep 27, 2011 at 11:29 AM, Scott Baker <ssbaker305@...> wrote:
    Once more, for the gold...so to speak.

    I'm attaching testimony and supporting materials I gave to the trilevel (federal, state, city) jobs task force about a year ago.
    In it, you'll see the NY State budget, which clearly shows over $100 billion in investment assets (that is, things that could be invested elsewhere).  Now, if a small portion of these were put into a state bank, re-invested as loans into NY state,

    This presumes there are credit worthy borrowers the banks currently won't lend to, and that the state bank would have lower lending standards than the private banks.
     =====
    No, it presumes that money goes to where it can get the greatest return, and right now the system is rigged to provide that in the FIRE sectors, not the Real Economy where people actually work for a living.  Even so, the Bank of North Dakota has managed to find credit-worthy borrowers since 1919.  What do they have that we don't?  Better mid-western stock?  Climate (yech!)?  No, it must be something else.  A State Bank that invests all the state taxes back into its citizen?  Yeah, maybe that's it...

    we would have what the state of North Dakota does - a 2-year budget surplus, even in the face of the worst downturn since the Great Depression, plus interest paid to the state, plus thousands of new jobs and opportunities, in New York (not, for example, China). 

    North Dakota has massive income from natural resource extractions and a very small population, which is why there is a surplus.
    =====
    Wrong again, as Ellen Brown has debunked.  I won't trouble you or myself looking up her recent article showing it ain't about the oil, but here's just one take-away.  Alaska has slightly more people, but twice the oil revenues, and they also have twice the unemployment, and state deficits.  What's the difference, other than an oil fund that gives its citizens about $3,000/year (We Georgists actually support that)?  Ans: The State Bank.
    ======
    I'm good with the real estate tax, but the state taxing and spending alone isn't going to address the overall lack of aggregate demand (drag) that comes from the federal govt. grossly overtaxing us for the size fed govt we have
     ======
    When you say RE tax, I hope you understand this is really 2 kinds of taxes - one on Land (good) and one on buildings (bad).  We Georgists want only a tax on Land (capital 'L' to indicate ALL natural resources).  Throw in locational values, and most Georgists will tell you it's 1/3 to 40% of GDP in Rent.  See Gaffney's: "The hidden Taxable Capacity: Enough and To Spare."  It's about 140 pages, but worth reading, especially for a trained economist like you.  Demand is ALWAYS there.  If I had the money, I would DEMAND my Porsche tomorrow!  More broadly, 1 in 5 New Yorkers is living in poverty now.  Don't they have demands too?  No, it is lack of effective demand, and that is only held back by lack of opportunity.  That can be fixed with the proper changes, some of which I've described (I try to stick to the big stuff).

    As for being over-taxed, well, the Gov has to get those investable assets somewhere, right?  Plus pay the interest on the debt you keep saying is already paid for.  Actually, the government needs to do neither of those things.  It DOES need to change the way it does accounting, and start counting assets honestly, and learn that it can "coin (its own dang) Money" (Article 1, Section 8: US Constitution - my favorite section!)  I know, I know, Greenbacks are like Unicorns.  Well, I have a Unicorn framed on my wall, then.

    New York City has similar levels of assets.  Add in all the smaller agencies and towns, and pretty soon you're looking at close to half a TRILLION in assets that could be invested differently.  When legislators say we are broke, they are only looking at current revenue minus current liabilities, not at long-term assets.  It is the difference between an Annual Financial Report and Comprehensive Financial Report.  It's like counting what's in your wallet and ignoring your bank account etc.
    De-busting myth #1: We are not broke.

    In this document you will find a highlighted footnote from one of our prime educators and researchers, using NYC dept of finance figures, showing that we have some half a trillion in Land values (NOT counting improvements like buildings), just in NYC alone.  This is an underassessment by at least half, but even using the underassessed figures, if we taxed land values at just 8%/year, we could eliminate every other municipal tax on sales, wages and other property.  This would spur development by forcing unused land into production, and by untaxing true production.
    De-busting myth #2: We have vast amount of value, but it is locked up in Land.

    Notice I didn't even go into the Greenbacker issue with again.  It seems to me you are not receptive to that, so I will move on.  The point being there are many ways to save the economy, and we are hearing about almost none of them in the mass media, schools or anywhere else.  Perhaps this is because most universities are land-grant universities and are biased by their free largesse.  Perhaps it is from the "Corruption of Economics" as Mason Gaffney and Fred Harrison have written about in the book by the same name.  Perhaps it is because people dismiss original thinkers like Zarlenga as pseudo-novelists and ill-informed, even when they have history, logic and some of the greatest thinkers of the ages on their side (like Aristotle, who said Money is a legal creation).  I don't know.  I can't get into your heads.  But when you start treating man-made laws as immutable facts of nature, I have to wonder who has really been drinking the Kool-aid here. 



    From: Warren Mosler <warren.mosler@...>
    To: Scott Baker <ssbaker305@...>
    Cc: Jerrit Erickson <jerrit@...>; Scott Fullwiler <scott.fullwiler@...>; "jgriesgraber@..." <jgriesgraber@...>; "Wray, Randall" <WrayR@...>; RogerErickson <rge@...>; Aussie Employment - Bill Mitchell <bill.mitchell@...>; WilliamK. Black <blackw@...>; Dr.Jan Kregel <jankregel@...>; AparnaBio -Martin Woodle <mwoodle@...>; Maj. Don Vandergriff <vandergriffdonald@...>; Col. Gary Wilson <wilsongi@...>; stevenhansen <mshaganes@...>; UnionCollege Economics - Brad Lewis <lewisb@...>; Ellen Brown <ellenhbrown@...>
    Sent: Monday, September 26, 2011 5:25 AM
    Subject: Re: point of Georgist/MMT convergence

    No, that what is called govt debt has already been paid

    It's the dollar balances already spent being held in safe keeping by the same govt

    <sent from mobile device>
    Warren Mosler
    President, Valance Co.
    5013 Chandler's Wharf
    Christiansted, St. Croix
    USVI  00820


    On Sep 26, 2011, at 5:12 AM, Scott Baker <ssbaker305@...> wrote:

    Well, of course they could, but in addition to the anti-government folks, there is this paralyzing fear of the "DEBT" stopping both Republicans an Democrats.  Warren seems to think, if I read him correctly, that people just need to learn that the debt doesn't need to be paid - indeed, should not be paid - because then we'd have no money (or just the tiny amount from the mint).  But the bond markets would go into a tailspin if they believed they were not first in line for repayment, or even the only ones in line.
    With Greenbacks, there IS no debt to repay.  People are put to work, earning money which will then be circulated into the economy (trickle sideways, not trickle down).  If we do like Lincoln and deliberately NOT use the new money to pay off debt, the bond markets need only worry about overall devaluation - not a trivial concern, but not the same as repudiating the debt entirely. 
    Now, Zarlenga wants to pay off the debt with new U.S. Money too.  I'm not asking to go that far, at least not initially.  Zarlenga says that if we have 2 competing money systems, the bankers will always swamp the Government version, and that is true as far as the original Greenbacks were concerned, which were artificially restricted to a paltry $450 million (well, that was not so little in Civil War days).  But I think we are so far removed from knowing what true government issued money is, and what it can do, that even this limited applicaiton would be a boon both for the economy and for understanding.


    From: Jerrit Erickson <jerrit@...>
    To: Scott Baker <ssbaker305@...>
    Cc: Scott Fullwiler <scott.fullwiler@...>; Warren Mosler <warren.mosler@...>; "jgriesgraber@..." <jgriesgraber@...>; "Wray, Randall" <WrayR@...>; Roger Erickson <rge@...>; Aussie Employment - Bill Mitchell <bill.mitchell@...>; WilliamK. Black <blackw@...>; Dr. Jan Kregel <jankregel@...>; AparnaBio -Martin Woodle <mwoodle@...>; Maj. Don Vandergriff <vandergriffdonald@...>; Col. Gary Wilson <wilsongi@...>; stevenhansen <mshaganes@...>; UnionCollege Economics - Brad Lewis <lewisb@...>; Ellen Brown <ellenhbrown@...>
    Sent: Monday, September 26, 2011 4:55 AM
    Subject: Re: point of Georgist/MMT convergence

    On Mon, Sep 26, 2011 at 12:57 AM, Scott Baker <ssbaker305@...> wrote:
    > Most Greenbacks were spent by their owners on things other than taxes.
    > Maybe they never made it back to government at all (heck, I have a $5
    > greenback from 1963 framed on my wall.  Am I contributing $5 to the national
    > debt?  It gets a bit absurd to continue that chain of thought at a certain
    > point).  Government can abrogate its "debt" by simply coining more money -
    > something no one else can legally do, not even banks; instead they have to
    > use double-entry accounting to establish a debt when they make a loan, that
    > A truly sovereign government does not have to operate
    > that way (though it chooses to at the moment).  It can simply put new money
    > out into circulation, subject to reasonable restraint for inflation.
    > This new money could be used for new job creation, again, without debt.
    I'm still convinced that you're arguing for things that we all want
    under the assumption that we either haven't heard of or don't want
    them. Just because greenbacks are ideal, what (in your opinion) makes
    the US unable to spend on job creation and public works _right now_?







    --
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    'The 7 Deadly Innocent Frauds'
    http://www.moslereconomics.com/2009/12/10/7-deadly-innocent-frauds/
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    The 1998-2001 budget surplus was the longest surplus since the 1927-1930 surplus.  Coincidence? 

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  • roy_langston
    ... As a lawyer, you are surely aware that there are ways of circumventing inconvenient constitutional limitations. I think we have mentioned a universal
    Message 145 of 145 , Sep 21, 2012
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      --- In LandCafe@yahoogroups.com, "jdk_maryland_atty" <jdkromkowski@...> wrote:

      > Roy the UIE/UPE is all well and good, but you have to realized that in the united states getting a UIE/UPE in almost all cases is going to require amendments to state constitutions because of uniformity clauses. These uniformity clauses don't apply to income taxes. Getting state constitution is just an arduous process.

      As a lawyer, you are surely aware that there are ways of circumventing inconvenient constitutional limitations. I think we have mentioned a universal individual housing voucher system as one possible constitution-compliant substitute for the simpler and better UIE. Such a voucher could be further tweaked by, e.g., offering full reimbursement value off LVT but only fractional reimbursement value for improvements.

      Laws, including constitutions, are not sacred writ. Their only purpose is to implement in practice the principles of good government. Given the relevant principles, solutions to these kinds of implementation problems have to be developed locally by people familiar with local conditions, laws, etc. My concern is to identify, specify and clarify the principles of good government that laws exist for no purpose but to implement.

      -- Roy Langston
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