Re: Latest Rant from Warren Mosler
From: The Trucker (mikcob_at_verizon.net)
Date: 12/15/04
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Date: Tue, 14 Dec 2004 21:52:24 -0800
william_b_ryan@hotmail.com wrote:
> Referencing
> http://www.mosler.org/docs/docs/liberal_agenda.htm
>
> [Mosler] In fact, the first macro equation we learn -
> and the one that the government accountants must
> balance to or find their math error - is as follows:
>
> Government Deficit = Non Government Surplus
> ----------------------------------
>
> Hummel: Mosler has merely quoted a well-known identity in
> macroeconomics.
> ---------------------------
> -------------------------
>
> Whether or not it is "well-known," it is not generally
> accepted. You'll find it in some Keynesian inspired
> analyses. You'll seldom find it in non-Keynesian
> analyses. It is in fact utterly fallacious on several
> counts.
It will depend on one's definition of _money_ and _savings_.
> It is a cash-flow concept that ignores the
> realities of double entry accounting. It is premised
> on the assumption that government prints money and
> spends it, and government spending is the only source
> of money.
There is nothing wrong with that premise (it depends on
how you define money). If reserves are the only real
money and all the rest is simply bank credit then the
premise is correct.
> Moreover, it is premised on the assumption
> that the cash account is the tabulation of government
> money held by the firm, and there is no other asset
> held by the firm, and that "savings" is equivalent
> to the balance in the cash account.
But if Mosler is speaking of "financial assets" then other
assets held by the "firm" are irrelevant to the discussion
here. IOU's between the people in the private sector
are a wash in the balance between government and the
private sector. The only way the private sector as a whole
can increase the number of bucks it has in the piggy
bank is for government to create more bucks. Why this is
seen as a good thing is somewhat confusing.
> If we take "non-government surplus" to be profit as
> it is defined in double entry accounting, this so-
> called "identity" is complete nonsense.
>
> The Mosler model is a welter of logical inconsistency
> built on false premises.
Not so.
> If you examine it closely, you will see that it is
> the argument for fascism, in that it is the rationale
> for centralizing the power of finance in "government,"
> from whose authority there is no appeal, with the
> populace enslaved in the so-called "buffer stock."
I think this is ridiculous. Who do you think enforces
all the private sector contracts (IOU's)? In a representative
democracy the government is supposed to be _US_.
-- "I know no safe depository of the ultimate powers of society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education." - Thomas Jefferson. http://GreaterVoice.org
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