You, like most conservatives, see business as the “source” of the currency, which is why we are stuck in this circling of the drain of supply side economics currently.

Rubbish. I don’t see it that way at all. Business adds value and reallocates currency, and that’s why it must be mentioned as part of any value equation. That’s obvious. (Companies CAN be a source of currency, when they authorize additional shares of stock, but that’s a bit tangential to the discussion.)

But, the more pertinent issue is that currency is simply a proxy for value. Remove all the currency tomorrow, and business activity still goes on, albeit inefficiently. Nobody NEEDS a printed piece of currency to exchange value.

Only the federal government can “create” a dollar. All others are “users” of currency, and that currency is the property of the government.

Technically correct, but omits the rather important matter of the currency is just being a proxy for value. The note itself might be the property of the government, but the value it represents is NOT the property of the government. Remove all the currency tomorrow, and the economy figures out a way to move on. The currency simply represents a unit of tradeable value.

Illustration: My company (software) had an interesting incident right after the fall of the Soviet Union. Seems that the Polish government had a need for our software. Problem is that they had no way to pay for it, since whatever they were using as “currency” was crap; it had no value. So, our creative boys in Germany figured out a way to sell the software anyway; fortunately, they figured out how to sell all the milk the Poles paid us in before it spoiled. :-)

Taxes levied on business end up as a cost item that gets marked up and passed along to consumers. Ditto for taxes on fuel or materials that business uses to produce and distribute goods and services.

Well, welcome to the Tea Party.

I do believe that taxes can be used to direct the investment of wealth into productive use in the economy that offers sufficient velocity to make currency creation less necessary for the government.

Depends how you’re defining “investment”. In recent years, people who favor large government efforts to direct the economy have broadened the term to make pet projects more palatable to the public. I don’t sully the language that way. What Obama and now Trump want to do with infrastructure, for example, is not an “investment”; it’s maintenance and improvement.

That said, the notion of tax breaks to force investment using the tax code is a “been there, done that”. Reagan got rid of it, and wisely; even lefty economic writers like Krugman admit that the pre-Reagan tax code was an inefficient way to drive investment and created distortions in the economy. The problem was (and would be) that the investments the government wants to drive get codified into law, builds a political constituency, and survives long after changes in the economy render the investment vehicle unproductive. You see this happening now with ethanol. So, it’s one of those things that sounds good on paper, not so good in practice.

If your idea of fiscally responsible means totally ignorant of macroeconomics and even how our Federal Reserve and Treasury work

Rolls my eyes. Here’s a news flash for you: Macroeconomics is an enormously complex subject that is in many ways more art than science. You don’t know everything about it and neither do I. And neither do the economists that win things like Nobel Prizes. Put Krugman, Prescott, Stiglitz, and Shiller in the same room and watch the sparks fly. They won’t agree about much.

Point here is that neither of us is in a position to declare anyone else “ignorant” of macroeconomics. If your ego requires you to believe that you are the Oracle of Macro and everyone else is a poor foolish peon, then that’s your problem, not mine. However, if your ego does NOT require you to believe that, you might consider the possibility that very very smart people who do understand macroeconomics and how the Fed and Treasury work pretty well (a) disagree with you, and (b) also think it’s a shitty system and could use some reform.

And there are no shortage of central bank and monetary fuckups in the last century to back up that POV.

Another point you don’t seem to have considered: Economic systems and subsystems require the public to buy off on them in order for them to work. Whether you or I decide that the opposition to them is “ignorant” or not is completely irrelevant; if the public does not buy in, the system will fail.

Why does that point matter? Because matters like deficit spending and the carriage of large deficits on the national balance sheet may in fact be sustainable in practice (which is a large part of what you are arguing), but if you can’t get the public to buy off on that proposition, then the government has no choice but to unwind that debt. History teaches us that governments who tell the public “just shut up and let the smart people run things” (which is also what you appear to be arguing for) are shortlived.

I should have said “fossil fuels” instead of confining the statement to just oil.

Yes, you should have. But you still have the nuke issue and the fact that there really are no obstacles placed in front of green energy initiatives.

This is always excused with the lame claim that jobs are at risk if the industries are forced to clean up their messes and compensate the public for damages.

Nonsense. That argument has not been made powerfully and in earnest since the events of Love Canal, which was a very long time ago. There is no political constituency for putting cleanup costs on the taxpayer.

I’m old enough to remember those times, but not so old as to be confused to the point of completely reversing history.

Nobody’s “reversing” anything. It is fact that the Vietnam war created debt; it is also fact that under Nixon, a conscious decision was made to print up money and inflate it away. Obviously, OPEC threw an enormous wrench into the works and exacerbated the situation in a major way, resulting in rather nasty inflation rates.

This was doubly applicable since RayGun took away most of the tools in the tax code to direct investment.

Laughs. Yes, it was very important that we continued directing investment into oil wells and cattle ranches so the 1% could lower their AGIs from 70% to 20%. :-) I remember those days. Salesmen running around, investing 5K in a cow, and getting 20K back on their taxes as a result. Great policy. :-)

(BTW, the use of pejoratives decreases your credibility.)

The Chinese give us “real” goods made from real resources and labor and we pay for them by moving “their money” from one account to another and giving them a few paper certificates we can pull out of our ass on demand. And you want to change this because _ _ _ _ _?

Laughs. Well, OBVIOUSLY, if the currencies don’t float, then essentially the Chinese get to keep all the benefits of global trade for themselves. We get trinkets; they get all the jobs, while the working class formerly supported by those jobs end up flipping burgers and drowning their sorrows in alcohol and opiate abuse. And ultimately, you get a really pissed off middle class that ends up voting for a populist real estate magnate because he was the only one who noticed the problem and suggested a solution that was palatable to them. :-)

You seem like a smart guy, but you don’t peel the onion back far enough. You need to tie economics back to human behavior.

The jobs lost to them would be lost already to AI and robotics if they didn’t offer the intermediary step of using cheap labor.

Wrong. Not in concept, but in time horizon, which matters greatly.

I started working in AI in 1988, on LISP-based inference engines. That moved me ultimately into data science (although we didn’t call it data science until recently) and since 2011, I have had the opportunity to work on and off with the IBM Watson technologies. So, suffice to say you’re in my field of core expertise now.

Cognitive computing (AI is just a term used by the rubes) is not nearly as far along as you seem to think it is. Had Cheap Labor not intervened, cognitive advances would have, over the next generation, moved jobs away from the working class, as you state. However, the “generation” that it would have taken us would have given our educational systems and workers time to adapt to this new paradigm.

However, cheap labor didn’t need a generation; it simply walked into thousands of manufacturing plants and shut out the lights, creating social disruption. Not good, nor defensible for a handful of trinkets.

The factory jobs aren’t coming back, and neither are the coal jobs or the permanent jobs claimed by frackers and pipeline builders. If we don’t use the power of our sovereign currency to prepare Americans for the next couple of decades when half of existing jobs also vanish we really can settle in to third world status like Zimbabwe.

I quite agree that we are moving into a period of time where we’ll need plumbers more than programmers. Unfortunately, although neither of us think we’ll end up as Zimbabwe, I think we do end up “paying for all this” with our standard of living; how far that goes before we reach some sort of balance between mean wage and cost of living is anyone’s guess. That’s uncharted waters.

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.