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Sure, but there's a flow rate problem: they're predominantly good at a productive skill whose fruits are taxed at a lower rate than those of people with differe
by lr4444lr 9y ago
Sure, but there's a flow rate problem: they're predominantly good at a productive skill whose fruits are taxed at a lower rate than those of people with different productive skills. Now, because most people have some stake in investment, the progressive rates could start quite high - maybe in the tens of millions - but the monetary system simply won't work forever at the trajectory its on.
- WalterBright 9y ago> the monetary system simply won't work forever at the trajectory its on. It can under a fiat money system (which we've had since 1914). If you or I borrow money, we have to pay it back. That's not so for the government with fiat money. It can just print more money anytime, or do the equivalent (issue more bonds), and it can do this forever. This is why the dollar today is worth just a few cents of what it was worth in 1914. (The 1914 dollar was worth the same as the 1800 dollar.) Check out "Monetary History of the United States" by Friedman.
- lr4444lr 9y agoThat's the Chartalist (and MMT view, I think). Friedman did make a strong case for the central bank's role like you describe to end recessions, but he was also sensitive to the fact that money was not identical to productive capacity, ie that which would produce capital gains. The concern as I understand it is that unless you did something radical like literally gave the cash to people directly, there is still the liquidity trap with the central bank's levers.
- WalterBright 9y agoFriedman showed in MH that the stability of the money supply was greater with the "blind" operations of the market than with the enlightened levers of the Fed.