Re: The Citizens' Guide to Money

On 2008-01-08, sameer <sameerjalnapurkar@xxxxxxxxx> wrote:
Thanks for the reply. I have one comment:
On Jan 7, 5:11 pm, "J.H.Boersema" <jo...@xxxxxxxxx> wrote:
Should it be handed over to the
Government to use on pork-barrel projects?

Democratic Government: yes. As loans to useful enterprises, who will
pay back, at which point the money can simply be destroyed causing
the money to become more valuable again - zero sum.

Pork-barrel: of course not, why do you say that ? Why do you immediately
need to put a negative marker on "the Government" ? Because maybe you
really know that it is the Job of Government to *spend* it, and not
only regulate the total supply !

The Pork-barrel is only useful to deal with emergencies and special
circumstances like the crippled and old.

It is all so obvious, it is all so obvious ... why can't you all see it.

How do we make sure that
the new money is used in the most worthwhile way?

Democratic control over Government, the inescapable way
- binding referendums
- bottom-up state representative democracy
- state investments are public knowledge
- the Government the slave/servant of the People, tied hand and
foot http://www.jhwh.be/~joshb/constitution-short.html#3
Inescapable public power over all of Government including money
supply in total and all investments in particular, by Constitutional law.

A reasonable answer to this quandary is that the Central Bank should
not simply hand out the money, but loan it. The interest rate on the
loans should be market determined. This will ensure that the money
will go to only those who can use it most productively.

"Most productively" ? Give me 500 people, a whip an AK-47 and
ammunition: I'll starve them first, and then work them to the
breaking point at gun point. You'll see I'll make a hell of a return
on that investment. But is that useful for an economy ? Do the people
exist for their own sake, or for the games of the money markets ?

Your answer is wrong. There should not be money markets to whoever
takes the funds at highest return. Why would that bother anyone
that the return is highest, it only needs to be zero sum in the
end, thus maintaining the money supply as a stable entity.

Bzzzt, wrong, no cigar. Good writing style though. Once you
understand/agree how it should work you should write a book about
it, no doubt it would be as legible as this was.

You trust a democratic government to spend the new money well.

Thanks for your interest. There's a number of things with the
idea if it is good/bad what democratic government does, with money
or otherwise.
0. The People are the most numerous entity by definition, they exist
in every corner of the system and therefore know most, useful if only
all the input could be gathered.
1. If a democratic Government makes mistakes, the People in majority
are most exposed to the problems created, which leads to the
strongest possible interest to get it right, compared to any other
minority group. The 51% of the People is a very large group.
2. If a democratic Government makes mistakes, it is the People who
ultimately made the mistake and feel it, and therefore the People
are going to learn from this. If someone else makes mistakes, you
can get angry or whatever, but if you made them, I guess there's
no alternative but to learn and do better next time.
3. Singling out any subgroup, to place them above the People, I'd say
that such an act alone disqualifies that higher group, and makes them
untrusted by definition because how can they be trustworthy while
denying the People their power and awarding it to themselves, and
taking the spoils of that power position (rather then administering
all it in the general interest, taking out an equal share, which
they aren't doing and never have been able to do).

*

I thought there was an interesting effect though: on the one hand
if you place wealthy people above everyone, they have an interest
in holding the nation together. And they will, because it is
tremendously profitable for them. If a nation disintegrates into
misery and anarchy without that self-interest stability point, it
is in the end best for all to have a top-group of greedy people,
and try to pressure for as much social working conditions as
possible. This assuming that the ruling elite is not the cause of
the disintegration, which it ofcourse frequently is, through
limitless need for more.

If you compute the cost of a 5% top group in a People at great wealth,
the cost of that group is huge on every single individual. Yet many of
this top-group participants are husbands and wives and children and
colleagues and hangers on to the people who have the real power and
hold the nation together in their self-interest.

I thought there was a lot to gain there: placing a single elected
person for decades or even its life at the head of a Nation, giving
it great wealth and palaces and whatnot, but disallowing it to make
other people rich so that it will just be that person, the total
cost of that single rich person is negligible compared to the total
economy. 5% very wealthy ruling class is an unbearable burden on
everyone (that's what modern nations tend to do now), but one person
tremendously rich is hardly noticeable.

But what should that person do ... making it the dictator probably
means he/she will grow up a wealthy class around it, and deny the
people their democratic power, which is how it has always worked out.
These things can be solved in law, not a problem: have this King /
Queen like person in its position, from which its maintainance voice
will definitely be heard. Since its great wealth, it has that inherent
self-interest in keeping the Nation together. Now all you need it
to elect someone with at least some leadership capacity to get the
job done when needed. If a nation threatens to crumble, then quickly
this King / Queen can be given actual Government power, turning the
Nation into a Constitutional Dictatorship under that elected King
/ Queen, until the situation is stabilized. Since a crumbling Nation
is bad for everyone, chances are people will even start to listen to
their King / Queen before disintegration starts, also knowing they
shortly would be forced to by law if the crumbling goes on.

Such a system (see my laws, I have too many laws around this
issue to easily explain in a few sentences) would provide the
natural stabilizing effect of that "hugely wealthy entity" at the top,
while not making that top overweight - just one person - while not
denying the people their democratic power for as long as they
manage it within certain limits of law and order !

The good things: democracy, central focus against disintegration,
without the bad things: power abuse, denial of people's influence/power.
The more proficient people become with democracy, through learning
from mistakes - for instance bad fiscal policy and maybe setting up pork
barrel projects for all which will make people too lazy - the better it
will work, while this King/Queen position is waiting in the wings as
a back-up in case of failure/chaos, after which the democratic system
reboots itself for another go (this is all described in law precisely,
I'm not making this up right now). If the Country is in order and
democracy functions, the top person is left to ... enjoy itself !
If the King / Queen takes true power, that does not imply its wealth
increases, it stays exactly the same - at least as long as the
Constitution is no broken, which of course may cause yet more
disintegration and destabilizes the position of the King / Queen
itself, which is itself dependent on the Constitution. Hence, even
the King / Queen would only want not to have power, because it is
less work for the same pay. Naturally one can quickly depose the
King / Queen and elect another, and there are mechanisms outside
this King / Queen which can quickly depose it in case of power abuse.
Also, after 1 year of power, there are automated re-elections for
the King / Queen position - the King / Queen better deliver if it
wants to stand a chance. (I really mean to see this system in
action.)

http://www.jhwh.be/~joshb/constitution-short.html#3.1.c-1.8 (King Elect)
http://www.jhwh.be/~joshb/representative.html

4. I think the People are quite capable to make sound policy decisions,
I think they are incomparably more loyal to Justice, Peace, truth
and sound fiscal policy then any political group / elites now in power.

I estimate that, despite all the reasons to give the People the power
regardless of merit (certainly given some back-up system to deal
with chaos), the People will initiate and sustain excellent fiscal
policy. They will probably go for a rock-solid coin in most nations
except the very underdeveloped ones who can learn a lot while making
mistakes, and I think that is a great idea (both). They will not go for
pork-barrel, because people really don't support that IMHO. Most people
work, it's their tax dollars/Euros/... at work, they don't want to
give that money away for no reason to people who don't work like they
do, and they are right. The problem sooner lies in the reverse: they
want to spend money in their own interest, maybe parties and football,
and disregard certain aspects of social insurance (unless they
themselves need it). We'll have to see what happens, it is usually
the People who demand social improvements.

I think
a government should indeed spend on social projects, but that should
be funded primarily by taxation (and secondarily by borrowing).

I do not believe any Government should ever borrow. A government can
do a number of things: tax people more, print more currency, call on
other Nations to help in case of disaster (good will). Why should
a Government ever want to borrow, when it has and should have the power
to simply take the money and spend it in the common interest ? A
Government that lends is really: the present day Government is stealing
the power of future government, who are then faced to deal with the
bad fiscal policy of their predecessors. Which they probably would do
well to deal with in the simple fashion: default on all loans. Loans
between Governments are probably bad practice as well, and these can
also be defaulted on, in return for good will for instance.

"Social projects": I'd say in a way everything Government does is a
social project, from maintaining Justice to making roads to making
sure there is adequate insurance for everyone. The common interest
is a social project, IMHO.

Giving
bureaucrats and the excitable masses to print and spend money is
dangerous.

Bureaucrats obviously should not have that power uncontrolled,
it should be in the hand of the actual Government: representatives
and Referendums, tightly controlled by the general public, who know
everything. Laws such as: the Government keeps no secrets,
Referendums are binding, Representatives can be removed and replaced
any day. By the way, my system does not have representatives on
a National ballot, but they are delegates of quite small groups
(100 persons), so there is a tight bond between real people and
representatives, unlike the current representative system. You
can and should really talk to your representative, and you can
decide any day to replace him/her with just 51 persons, so that
is real and practical power. This even holds for the National
Government, the delegates are always hanging on a thin thread,
I thought that would be a good idea, don't let them get comfortable
in their power - they can lose it any minute from a variety of
directions. Keeps them on their toes I think.

The "excitable masses" may decide to print a lot of money for
a great project. But is that wrong ? I think no, because if it
messes up, it is the People who pay the bill anyway. It's their
game. Power elites: that's dangerous. They cause corruption and war.

The government should, however, be in the business of
making laws that ensure that you cannot enslave 500 people with a whip
and an AK-47.

Exactly ! And we should have laws that are devised in such a way that
enslaving people with whips is not the inevitable natural outcome
of the economy system, which it now is because of for profit money
selling and soil markets. Soil and money markets have to be cut out,
and replaced with soil distribution and political investment, simple
& obvious.

But as far as allocate resources efficiently is
concerned, it is better to use the mechanism of market-determined
interest rates.

Money should be spend and loaned by mechanisms that are non-profit and
in the common interest, it should not be set up as a free trade system,
there should not be businesses/individuals gaining profit from lending
money. If there is, it should be marginal and not dominate. The bulk
of the investment money in an economy, particularly for businesses,
should be invested there where it serves the needs of the People, and
not where it serves the need of a for profit investor, who ultimately
is just a gambler, not working at a rate comparable with to the
money involved, and not delivering an accountable product/service. A
non-profit investor delivers a service, a for-profit investor is a
gambler and causes damage. Las Vegas isn't the gambling capital of
the USA, Wallstreet is, the money markets. The problem is that
profit-seeking money goes more to abusive bosses, and that this is
actually very profitable, and you end up with banks who do that who
reap great financial rewards from that, and these come to dominate
the financial markets, it is the natural law of the system. People
abusers are people abusers, you don't want them as bosess, you don't
want them in control of banks, or else. At the same time, the exact
reverse system: public control over non-profit investment, has every
reason in favor of it. I don't see a way out of this argument, and
no reason to find one either: it is a closed equation with one answer.

This results in: 1. nationalization and politication of the entire
financial sector, leaving barely anything, except some marginal
person to person lending of 15,- and such, 2. real democratization
of the government, because that is currently way underdeveloped,
3. restructering of land ownership system (laws). (I advice the current
power elite not to resist, because that may only get you killed.
If you don't resist, you don't give us a reason to lock you up.)
--
http://www.jhwh.be
#70 http://www.xs4all.nl/~joshb/no-id-theft.html
.

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