Re: Fw: We are making some progress here

Dear John,

You continually support the virtues of "debt free
money."

I think you understate the importance of Ch. 11
bankruptcy law.

When a corporation is over its head in debt, they
may declare either Ch. 11 (we're going to solve this)
or Ch. 7 (we are closing up shop).

Via Ch. 11, many a company that might have been
wrecked, is given the opportunity to settle with
lenders, in hopes that there is a win-win situation,
i.e., the lender receives more return than if the
assets were simply sold off.

"Debt Free Money" (DFM) does not hold "any feet to the fire."

You protest that government DFM can, at times, be
a worthy stimulus.

This is a Keynesian argument, and has merits, at times.

You and I have hashed, back and forth, about when such
stimulus is successful, or not.

You seem to view government as a source of infinite
funds, and funds that can be doled out, regardless of
the financial state of the government.

I FIRMLY DISAGREE.  We are, today, witnessing the
US federal government spending countless billions
that are not in the coffers.  Today, as you know,
I posted an article on the Federal Debt list, "A
Medicare fund gets dim forecast: insolvency seen
seven years earlier."

I am part of the baby boom as I was born in 1946.

What I see is frightening.  What I count on for
S.S. in retirement, and what I count on for health
care in retirement, simply won't be there.

Our federal government surely have/had economists in
either the Office of Management and Budget (OMB)
or the Congressional Budget Office (CBO), who could
clearly see the "bulge" of the baby boomers and that
to pay them their due, that the government could not
and should not use their contributions to S.S. to
pay for various boondoggles of the current kind.

Can we bankrupt this federal government, simply in
the name of preventing terrorism?  Absolutely.  And
Bin Laden will be laughing all the way to his stockpile
of non-US dollars and assets.  (no insult on the 
victims of 9-11 intended)

By our very actions, post 9-11, we are undermining this
country in a way that 9-11 barely did.  How does one
protect a country of this physical size from terrorism?

The short answer is, you can't.  We can attempt this,
but, in the end, for every effort we make, there are
thousands of opportunities to commit an act of terrorism
in this country.

At best, we are undermining the VERY virtues of this
country.

We brag about the US as the "home of the free."  Yet,
every action under the USA Patriot Act undermines that
freedom.  We hear about the specific ramifications of
that kind of governmental power, every day, in the news.

Meanwhile, we have yet to witness any acts of terrorism
since 9-11.  That does not prove the effectiveness of
our policing measures, but, rather, it proves that if
we get pissed off, we will bomb whole countries, whether
they had anything to do with the terrorism, or not.

A spokesperson on the Jon Stewart show last night
revealed why we bombed Iraq, rather than Afghanistan.

He said, there "were identifiable, bombing targets in
Iraq; there weren't such in Afghanistan."  So, we
bombed a country that has yet to be linked to 9-11,
let alone "weapons of mass destruction."

This level of spending insanity simply cannot continue.

Are you truly suggesting that our Federal government 
should deficit spend ourselves into a giant hole of
further debt?

Regards,

Curtiss

John Gelles wrote:
> 
> 
> Dr. Priest, our friend and mentor, voices optimism -- without which we
> cannot breathe: "We are making some progress here."
> 
> Progress where?  Progress toward ending poverty, pollution and the
> scourge of war -- as well as other blights on civilization that good
> people, with the help of science and technology, may remove (or
> lessen) over time.
> 
> In particular, we need progress toward defining a monetary system of
> production, similar to the one we now have, (set in a democratic
> society that enforces human rights and relies on good conduct not
> police power or brain washing to organize the affairs of state and
> associations of states.)
> 
> In particular we need to examine and clarify the functions, theory and
> practice of money, taxes, debt, savings, price, business governance,
> unions, trade, and other BIG issues with a bad record -- at present --
> for perpetuating misery in place of prosperity.
> 
> There is money created, like a negotiable IOU, which reflects the
> expected price of land, buildings, inventories, and other real
> products, for which the money will be exchangeable if foreclosure and
> levy on such property becomes necessary. This is debt based money
> (DBM) -- not debt-free money (DFM).
> 
> Then there is money created without benefit of foreclosure and levy
> whose value is based on continuity of business and government
> operations to produce real wealth. This is DFM, which, in a way we
> already have, because we know that when push comes to shove,
> democracies declare bank holidays and issue new money when old money
> fails to work.
> 
> Of course today we rely wholly of DBM because it is working well
> enough to satisfy the voters.
> 
>      But if there were votes for all the children and adults
>      cheated by the current system, they would insist on DFM
>      money for government to spend into circulation as necessary
>      until they too had a fair deal.
> 
> 
> Dr. Priest asks if government injection of extra DF money into
> circulation will not raise price or lower the value of saved DBM. The
> answer is it will not!  Why? Because price is based on supply of
> things for sale more than anything else. If by stimulating production
> we can gain economies of scale, the more the government spends of DFM
> the more DBM will be worth in terms of living standards.
> 
> Moreover, any DFM plan ought to include indexed-savings accounts to
> guarantee that DBM is not "watered" by following the Channel Islands
> lead. Note my email address:  indexed-savings @. . .
> 
> John Gelles
> 
> 
> 
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-- 


           W. Curtiss Priest, Director, CITS
   Research Affiliate, Comparative Media Studies, MIT
      Center for Information, Technology & Society
         466 Pleasant St., Melrose, MA  02176
   781-662-4044  BMSLIB@MIT.EDU http://Cybertrails.org