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The article somehow misses many different points, perhaps deliberately, as a satire of sorts. The point of money creation and subsequent inflation is funding f

The article somehow misses many different points, perhaps deliberately, as a satire of sorts. The point of money creation and subsequent inflation is funding for infrastructure, real estate and public projects. There will be outsized returns to road building, city sewers systems and such. However, good luck collecting funding for them without banks issuing money. Good luck fundung any project which has large upfront costs and time to return investment of more than a decade. The system currently exists is in place party because we historically knew how to capture positive spillover effects of such projects. Naive systems which does not even consider credit against future spillover effects will be very much like ours, but will develop slower and eventually collapse. Credit is good. Banks printing money with credit is a feature. Opaqueness of banks is a feature.

anm89 5y ago
This is a pretty rosy picture you are painting. So where do the tomahawk missiles and multi decamillion dollar police budgets for military gear, and the funding to run Iran Contra schemes get accounted for? We put a VERY small percentage of government spending into infrastructure so making that out to be the entire point of the system is just misleading IMO
- evancox100 5y ago
  New slogan: "Missile Systems are Infrastructure"?
- hamilyon2 5y ago
  Well-funded military is remarkably similar to well-maintainad roads if we look at consequences. Putting questions about what is the optimum amount to spend to each. Both promote trade and large-scale division of labour. Both directly (road-pavers specialize at that, infantry specialize at application of force) and indirectly, by promoting people and goods movement. Trade creates wealthy merchants, banks, and eventually further division of labour, manufacturing, large-scale specialized manufacturing and agriculture. In a sence, it is military who we should thank for silicon integrated circuits. We could agree or disagree about certain parts of military spending, but current global world would be unthinkable if huge armed forces didn't ensure peace for everyone.
nly 5y ago
Money creation is surely and simply to keep up with the volume of goods and services in the economy? If we didn't create money we'd have deflation (prices would drop year on year). The interesting side of things is really about the different ways money is created and where it goes. Money created through lending is paid back, it's ultimately backed by consumption or investment. Money created through QE is more onerous and can lead to financial repression instead of deleveraging of an overleveraged economy. I don't see why you tie this to infrastructure projects. Infrastructure projects are funded by government because it's government who can reap taxes to pay for them. It's government who can coordinate huge projects on a state scale, compulsory purchase land, and regulate and ensure fair access, etc etc. The alternative of thousands of miles of private roads and tolls would be hell. Monetary vs fiscal intervention is definitely important. If the government wants to go spend $1T on research and development or infrastrucmture for the next 100 years, fine. But a lot of what's been happening over the last 13 years is just robbing savers (lower savings and pension annuity rates) and driving inequality (the rich leveraging up)
- imtringued 5y ago
  >If we didn't create money we'd have deflation (prices would drop year on year). Calling deflation a drop in prices is misleading in my opinion. What really is happening is that money gets more expensive. People then start speculating on money the same way they speculate on stocks, real estate or Bitcoin.
  - nly 5y ago
    Nominal prices falling is the widely held definition of deflation. Life would be somewhat easier if we could all had magic glasses that converted prices on menus in to [hours you worked to earn this purchase], but for now we all deal with fiat.
- Dazdraperma 5y ago
  > Money creation is surely and simply to keep up with the volume of goods and services in the economy? If we didn't create money we'd have deflation (prices would drop year on year). Then why the guy from the FBI showed up the last time I tried to create more money to save the world from deflation?
missedthecue 5y ago
Banks don't print money. A double ledger accounting system does not create new dollars.

anm89 5y ago

This is a pretty rosy picture you are painting. So where do the tomahawk missiles and multi decamillion dollar police budgets for military gear, and the funding to run Iran Contra schemes get accounted for? We put a VERY small percentage of government spending into infrastructure so making that out to be the entire point of the system is just misleading IMO

evancox100 5y ago
New slogan: "Missile Systems are Infrastructure"?
hamilyon2 5y ago
Well-funded military is remarkably similar to well-maintainad roads if we look at consequences. Putting questions about what is the optimum amount to spend to each. Both promote trade and large-scale division of labour. Both directly (road-pavers specialize at that, infantry specialize at application of force) and indirectly, by promoting people and goods movement. Trade creates wealthy merchants, banks, and eventually further division of labour, manufacturing, large-scale specialized manufacturing and agriculture. In a sence, it is military who we should thank for silicon integrated circuits. We could agree or disagree about certain parts of military spending, but current global world would be unthinkable if huge armed forces didn't ensure peace for everyone.

nly 5y ago

Money creation is surely and simply to keep up with the volume of goods and services in the economy? If we didn't create money we'd have deflation (prices would drop year on year). The interesting side of things is really about the different ways money is created and where it goes. Money created through lending is paid back, it's ultimately backed by consumption or investment. Money created through QE is more onerous and can lead to financial repression instead of deleveraging of an overleveraged economy. I don't see why you tie this to infrastructure projects. Infrastructure projects are funded by government because it's government who can reap taxes to pay for them. It's government who can coordinate huge projects on a state scale, compulsory purchase land, and regulate and ensure fair access, etc etc. The alternative of thousands of miles of private roads and tolls would be hell. Monetary vs fiscal intervention is definitely important. If the government wants to go spend $1T on research and development or infrastrucmture for the next 100 years, fine. But a lot of what's been happening over the last 13 years is just robbing savers (lower savings and pension annuity rates) and driving inequality (the rich leveraging up)

imtringued 5y ago
>If we didn't create money we'd have deflation (prices would drop year on year). Calling deflation a drop in prices is misleading in my opinion. What really is happening is that money gets more expensive. People then start speculating on money the same way they speculate on stocks, real estate or Bitcoin.
- nly 5y ago
  Nominal prices falling is the widely held definition of deflation. Life would be somewhat easier if we could all had magic glasses that converted prices on menus in to [hours you worked to earn this purchase], but for now we all deal with fiat.
Dazdraperma 5y ago
> Money creation is surely and simply to keep up with the volume of goods and services in the economy? If we didn't create money we'd have deflation (prices would drop year on year). Then why the guy from the FBI showed up the last time I tried to create more money to save the world from deflation?

missedthecue 5y ago

Banks don't print money. A double ledger accounting system does not create new dollars.