- 18 Nov 2021 04:14
#15198533
In the long run national economies are like sports leagues in the sense that the different classes and groups compete in a game. This game has rules, in economies called laws and traditions.
In the US sports leagues have found that they do better if they have rules that give all the teams about the same ability to win. This keeps the fans happy, so they keep spending money and watching games, so corps can show them ads.
By different classes and groups I mean groups like these ---
1] The super rich
2] The merely rich
3] Bankers and financiers
4] Small business owners
5] Well paid professionals (lawyers, doctors, programmers, etc.)
6] Poorly paid professionals (teachers, nurses, etc.)
7] Gov. workers
8] Well paid skilled workers
9] Average workers
10] Poorly paid workers
11] Military people
12] People of color
Etc.
These groups are like teams in a league. If some of them keep loosing, then in the long run the GDP suffers. Obviously, if poor workers can't buy enough of what the nation's corps produce, then some of what the nation produces will have to be exported to be sold. That is, either the corps produce less because they know they can't sell it, or the corps find a way to sell it overseas. Both solutions are bad for the nation. If the stuff is not made and sold the GDP is less, and if it is sold overseas the people of the nation as a whole don't get to use the fruit of their labor.
In any case, US corps AFAIK do not export much stuff. We export oil, corn, soybeans, other raw food, and logs. We can't even saw the logs into boards here first.
A side note ---
. . . Capitalism began about between 1500 and 1600. The steam engine was invented by 1750. The use of coal to smelt iron began in about 1830, later the coal was cooked into coke, 1st.
. . . How much wealth was created by capitalism between 1500 and 10? I think, not much. And how much between 1600 and 1750? I think more, but not a huge lot more. Now, how much wealth was created after 1750? We all know that it was a huge amount, even if we divide by 270 years to get the average yearly wealth created.
. . . My point is that Capitalism's apologists claim that all the wealth was the result of the adoption of capitalism, and none of it resulted from using fossil fuels to massively allow us to do more physical work. Obviously, they are wrong. Obviously, doing more work with steam engines, etc. has caused the most of the increase. OTOH, capitalism did speed up the adoption of burning coal to make more stuff.
. . . I think capitalism is a good system, but it must be used with rules that make it spread the wealth created around to all groups in the economy. Over the last 4 decades, all over the world, these rules have been changed to let the rich and a few computer programmers become super rich.
. . . This does not mean that we need to throw out Capitalism in favor of Socialism (= state or worker ownership of key factories that make stuff, mines, and transportation networks).
My Main Point ---
. . . Sports leagues have added rules that spread out the talent with a "draft" system. The national economy can't really use a draft system, it needs other systems.
. . . Capitalism can be fixed.
. . . The Golden Age of the US was the 50s and 60s. During those 2 decades we had some key rules that now are gone or functionally gone. Some of then are ---
1] Anti-trust laws to not allow monopolies to grab pricing power.
2] Strong Unions to see that workers could force corps to give the workers raises.
3] Banking laws that didn't let banks charge too much interest and make stupid loans and investments.
4] Regular increases in the minimum wage that pushed up wages for all from the bottom. (Workers who are earning near the min. now are earning the min., and they still think they should ern more than the min., so they try to get raises. This applies to every level of pay, they all want a raise. The min. wage laws help non-union workers not be left behind.)
5] High taxes on the rich with the top rate of 90% in the 50s and 75% in the 60s.
6] Traditions and laws that didn't let the rich avoid paying their fair share of taxes. (This gave the rich less of a reason to screw their workers because the Gov. would take 90% of what they gained by screwing the workers anyway.
7] The rule about news networks had to give equal time to the other side of disagreements. Also, they could not outright lie to their viewers.
. . . Like I said, All of this things are gone now, and this is the problem with the US economy. [Note: as an MMTer, I make a big deal out of the fact that in 1971 Nixon took the world off the gold standard, which changed all currencies into fiat currencies. This is a fundamental change. You don't know or believe this because the powers that be have never let you be told this.]
In addition to the above list there are some other ideas that need to be used in national economies ---
1] Now that the world is off the gold standard and has learned from 30 - 50 years of experience with fiat money that now it is no longer necessary to protect the nation's gold supply by ---
. . a] by exporting the same value of stuff as it imports, if it exports too little it may have to pay with gold.
. . b] by not creation so much money that it lacks enough gold to back it, which is another way it must protect the gold supply.
2] The national debt is like all other debts in one way and dislike other debts in a different way.
. . a] It is like other debts in that all debts are at all times both a debt for the borrower and an asset of the holder of the debt. So, among other things the national debt is assets of the people.
. . b] Because all money is fiat money, all national debts that are in its own money have zero risk of default, can be rolled over forever without being forced to pay high interest on it (the UK has been rolling its debt over for 325 years now, and it lost its Empire 50 years ago), can never be repaid with tax receipts that create a surplus in the national budget without creating the "Mother of All Depressions", and so the national debt is not like other debts in that the only part that matters much is that it is also the assets of the people.
3] Corporations can and should be taxed with a 'progressive' tax rate. Corps that are too large in terms of revenue earned in the nation (US) can be taxed at a very high rate. This will keep there from being monopolies automatically.
4] Corporations can be taxed on their revenues instead of profits. This is a radical idea, but the rate will be less than a rate on profits, and we might let it deduct the pay it gives to all the workers except the top 1 to 5 of them depending on the size of the corp. That is we want corps to pay their workers more, so this can be the only deduction. All other deductions are things we want corps to do less of. Maybe also R&D and investments in 'plant' in the US. The idea is that this makes it much harder to use corp bookkeeping to move the profits elsewhere to avoid taxes in the US.
5] MMT has shown us that nations can deficit spend up to a different limit than the supposed lack of money from revenue and borrowing limit (a just money things limit). The new limit is the onset of inflation. MMT says that instead of looking at just the money things, we should be looking at the real resources and labor of a nation to see if any is currently not being used. As long as additional Gov. deficit spending just is used to put those unused resources and labor to use, it will not be inflationary. This means the Gov. can now deficit spend a lot to fight ACC, aka AGW because there is a lot of unused real resources and labor.
6] As much of this as possible should be added to the Constitution. Also some of the 1st list above may need amendments, like reversing some USSC decisions.
7] With a fiat currency, a nation can subsidize exports. The US does this now and you don't know it. It is hidden by calling it foreign aid. What happens is the Gov. gives nation A money to buy US made weapons with.
. . . If the US (or any nation) can't export its products because, e.g., its workers are paid too much; then the Gov. could give money to the corp doing the exporting so it can make a profit. OTOH, the US can put tariffs on goods coming in to encourage domestic production. AFAIK, every nation that has become an exporting nation has done these things. It has worked in the past. The US did the tariff part for 150 years. Germany and Japan also did the export subsidies part. Don't tell me it is against some international law. All such things can be changed, they are man made you know.
The intent of all these changes is to create an economy where all are happy with the result. Where the money flows round and round, without adding more wealth to one group than is added to any of the other groups. This is necessary because the economy needs to be in equilibrium to be stable over decades and centuries. If any group is screwed to allow another to gain massively, sooner or later the SWHTF. And in the mean time GDP is reduced.
. . . Note that, deficit spending adds money to the money supply without needing it to ever be repaid, and this added money is what the members of each groups are fighting over inside their group. Each of the groups should only gain more wealth compared to all others, after a national debate that decides that in fairness the group is owed more because of 'some reasons'. Over the last 4 decades, there has been a stealth campaign to make the rich richer at the expense of all others. This must be reversed and never allowed to happen again. Hence, the need for amendments to the Constitution.
You young people are aware that the main problem we face is ACC, aka AGW. All the above is a wish list for after ACC has been tamed.
The young who are reading this need to understand that someday you will be running the nation. And then it is up to you to fix things for all time.
If you like this you can copy and paste it to a word doc to share with everyone. If you do this, I'd like a 'like'.
In the US sports leagues have found that they do better if they have rules that give all the teams about the same ability to win. This keeps the fans happy, so they keep spending money and watching games, so corps can show them ads.
By different classes and groups I mean groups like these ---
1] The super rich
2] The merely rich
3] Bankers and financiers
4] Small business owners
5] Well paid professionals (lawyers, doctors, programmers, etc.)
6] Poorly paid professionals (teachers, nurses, etc.)
7] Gov. workers
8] Well paid skilled workers
9] Average workers
10] Poorly paid workers
11] Military people
12] People of color
Etc.
These groups are like teams in a league. If some of them keep loosing, then in the long run the GDP suffers. Obviously, if poor workers can't buy enough of what the nation's corps produce, then some of what the nation produces will have to be exported to be sold. That is, either the corps produce less because they know they can't sell it, or the corps find a way to sell it overseas. Both solutions are bad for the nation. If the stuff is not made and sold the GDP is less, and if it is sold overseas the people of the nation as a whole don't get to use the fruit of their labor.
In any case, US corps AFAIK do not export much stuff. We export oil, corn, soybeans, other raw food, and logs. We can't even saw the logs into boards here first.
A side note ---
. . . Capitalism began about between 1500 and 1600. The steam engine was invented by 1750. The use of coal to smelt iron began in about 1830, later the coal was cooked into coke, 1st.
. . . How much wealth was created by capitalism between 1500 and 10? I think, not much. And how much between 1600 and 1750? I think more, but not a huge lot more. Now, how much wealth was created after 1750? We all know that it was a huge amount, even if we divide by 270 years to get the average yearly wealth created.
. . . My point is that Capitalism's apologists claim that all the wealth was the result of the adoption of capitalism, and none of it resulted from using fossil fuels to massively allow us to do more physical work. Obviously, they are wrong. Obviously, doing more work with steam engines, etc. has caused the most of the increase. OTOH, capitalism did speed up the adoption of burning coal to make more stuff.
. . . I think capitalism is a good system, but it must be used with rules that make it spread the wealth created around to all groups in the economy. Over the last 4 decades, all over the world, these rules have been changed to let the rich and a few computer programmers become super rich.
. . . This does not mean that we need to throw out Capitalism in favor of Socialism (= state or worker ownership of key factories that make stuff, mines, and transportation networks).
My Main Point ---
. . . Sports leagues have added rules that spread out the talent with a "draft" system. The national economy can't really use a draft system, it needs other systems.
. . . Capitalism can be fixed.
. . . The Golden Age of the US was the 50s and 60s. During those 2 decades we had some key rules that now are gone or functionally gone. Some of then are ---
1] Anti-trust laws to not allow monopolies to grab pricing power.
2] Strong Unions to see that workers could force corps to give the workers raises.
3] Banking laws that didn't let banks charge too much interest and make stupid loans and investments.
4] Regular increases in the minimum wage that pushed up wages for all from the bottom. (Workers who are earning near the min. now are earning the min., and they still think they should ern more than the min., so they try to get raises. This applies to every level of pay, they all want a raise. The min. wage laws help non-union workers not be left behind.)
5] High taxes on the rich with the top rate of 90% in the 50s and 75% in the 60s.
6] Traditions and laws that didn't let the rich avoid paying their fair share of taxes. (This gave the rich less of a reason to screw their workers because the Gov. would take 90% of what they gained by screwing the workers anyway.
7] The rule about news networks had to give equal time to the other side of disagreements. Also, they could not outright lie to their viewers.
. . . Like I said, All of this things are gone now, and this is the problem with the US economy. [Note: as an MMTer, I make a big deal out of the fact that in 1971 Nixon took the world off the gold standard, which changed all currencies into fiat currencies. This is a fundamental change. You don't know or believe this because the powers that be have never let you be told this.]
In addition to the above list there are some other ideas that need to be used in national economies ---
1] Now that the world is off the gold standard and has learned from 30 - 50 years of experience with fiat money that now it is no longer necessary to protect the nation's gold supply by ---
. . a] by exporting the same value of stuff as it imports, if it exports too little it may have to pay with gold.
. . b] by not creation so much money that it lacks enough gold to back it, which is another way it must protect the gold supply.
2] The national debt is like all other debts in one way and dislike other debts in a different way.
. . a] It is like other debts in that all debts are at all times both a debt for the borrower and an asset of the holder of the debt. So, among other things the national debt is assets of the people.
. . b] Because all money is fiat money, all national debts that are in its own money have zero risk of default, can be rolled over forever without being forced to pay high interest on it (the UK has been rolling its debt over for 325 years now, and it lost its Empire 50 years ago), can never be repaid with tax receipts that create a surplus in the national budget without creating the "Mother of All Depressions", and so the national debt is not like other debts in that the only part that matters much is that it is also the assets of the people.
3] Corporations can and should be taxed with a 'progressive' tax rate. Corps that are too large in terms of revenue earned in the nation (US) can be taxed at a very high rate. This will keep there from being monopolies automatically.
4] Corporations can be taxed on their revenues instead of profits. This is a radical idea, but the rate will be less than a rate on profits, and we might let it deduct the pay it gives to all the workers except the top 1 to 5 of them depending on the size of the corp. That is we want corps to pay their workers more, so this can be the only deduction. All other deductions are things we want corps to do less of. Maybe also R&D and investments in 'plant' in the US. The idea is that this makes it much harder to use corp bookkeeping to move the profits elsewhere to avoid taxes in the US.
5] MMT has shown us that nations can deficit spend up to a different limit than the supposed lack of money from revenue and borrowing limit (a just money things limit). The new limit is the onset of inflation. MMT says that instead of looking at just the money things, we should be looking at the real resources and labor of a nation to see if any is currently not being used. As long as additional Gov. deficit spending just is used to put those unused resources and labor to use, it will not be inflationary. This means the Gov. can now deficit spend a lot to fight ACC, aka AGW because there is a lot of unused real resources and labor.
6] As much of this as possible should be added to the Constitution. Also some of the 1st list above may need amendments, like reversing some USSC decisions.
7] With a fiat currency, a nation can subsidize exports. The US does this now and you don't know it. It is hidden by calling it foreign aid. What happens is the Gov. gives nation A money to buy US made weapons with.
. . . If the US (or any nation) can't export its products because, e.g., its workers are paid too much; then the Gov. could give money to the corp doing the exporting so it can make a profit. OTOH, the US can put tariffs on goods coming in to encourage domestic production. AFAIK, every nation that has become an exporting nation has done these things. It has worked in the past. The US did the tariff part for 150 years. Germany and Japan also did the export subsidies part. Don't tell me it is against some international law. All such things can be changed, they are man made you know.
The intent of all these changes is to create an economy where all are happy with the result. Where the money flows round and round, without adding more wealth to one group than is added to any of the other groups. This is necessary because the economy needs to be in equilibrium to be stable over decades and centuries. If any group is screwed to allow another to gain massively, sooner or later the SWHTF. And in the mean time GDP is reduced.
. . . Note that, deficit spending adds money to the money supply without needing it to ever be repaid, and this added money is what the members of each groups are fighting over inside their group. Each of the groups should only gain more wealth compared to all others, after a national debate that decides that in fairness the group is owed more because of 'some reasons'. Over the last 4 decades, there has been a stealth campaign to make the rich richer at the expense of all others. This must be reversed and never allowed to happen again. Hence, the need for amendments to the Constitution.
You young people are aware that the main problem we face is ACC, aka AGW. All the above is a wish list for after ACC has been tamed.
The young who are reading this need to understand that someday you will be running the nation. And then it is up to you to fix things for all time.
If you like this you can copy and paste it to a word doc to share with everyone. If you do this, I'd like a 'like'.
- By Godstud
- By FiveofSwords
- By wat0n