Subject: RE: Surplus's effect on the money supply Date: Sat, 25 Aug 2001 16:01:57 -0500 From: "Forstater, Mathew" <ForstaterM at umkc.edu>
this view ('neo-chartalist'--see Wray's latest working paper for a good over view of the 'state money' view and endogenous money at http://www.cfeps.org/public/WrayWP24.htm ) recognizes the difference between 'real' capacity to produce goods and services and 'money'. the point--obviously 'Keynesian'--is that when there are unemployed resources, money/liquidity/demand/purchasing power can be used to activate these real resources, and the State (through Fed/Treasury powers) `is in a special position to inject liquidity/spending/etc into the system. we shouldnt overstate the point--this doesnt resolve the fundamental 'contradictions of capitalism' or end exploitation, but it can affect the unemployment rate, could be used to finance various social services, public infrastructure (which of course are still political decisions), could *potentially* underwrite planning initiatives,etc., could affect standard of living for populations in need.
-----Original Message----- From: christian11 at mindspring.com Sent: Sat 8/25/2001 11:04 AM To: lbo-talk at lists.panix.com Cc:=09 Subject: Re: Surplus's effect on the money supply
>This seems like high-end crankery to me. Taxes and bond sales=20
represent a diversion of resources (in monetary form) from the=20
private to the public sector. A society facing resource constraints=20
- and what society doesn't? - has to choose between SUVs and=20
childcare, projection TVs and cruise missiles. A government can=20
create money out of thin air, but it can't create real resources,=20
which have to produced using a limited supply of capital and labor.=20
This stuff just seems dreamy.
Doug
So, what does high powered money mean in this context, precisely? Is it fiat money that is "literally" just printed, instead of being borrowed from the private sector?
Christian