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Tax receipts are in no sense returned to the economy unless you really overload one of those words. A modern economy works by running a printing press a little

Tax receipts are in no sense returned to the economy unless you really overload one of those words. A modern economy works by running a printing press a little faster than a furnace, with the coefficient being (under honest and competent management) a good estimate of next year being better than this year by such and such, a self-fulfilling prophecy in a good way until you like, burn the planet via carbon emissions or some hard constraint like that. And it’s a perfectly good system… under honest and competent management. It’s just easier to corrupt than systems with much lower potential (which is the distance between gold bug and ignorant, those folks have a point, they just rarely make it). This is where all the 1971 stuff comes in: no rich person does anything but advantage their less-capable kid or lover or whatever unless someone is pointing a gun at them. (e.g. Altman has a job let alone unfettered power). The gold standard has a lower maximum potential risk to the extent you can stop there being a de Beers of gold. You likewise accept 50 years from the transistor to a computer in your house even if you’re fucking loaded. The unanswered question is: can we get competent and honest leadership (after a fashion) back without the bloodshed it has required 100% of the time before? A lot of us hope so but don’t have an answer just yet, and the clock is ticking.

whage 3y ago
This post feels like recent movie trailers. The way you wrote it makes me believe you know what you are talking about but I have no idea. Care to give the curious reader pointers to the topics you mention? I mean the "printing press to furnace" analogy of the economy, or what you mean by 1971 or the gold bug or the 50 year transistor omg what?
- benreesman 3y ago
  I’m just a nerd whose nerd hobbies came to encompass finance when I moved to Manhattan. I was also a party monster back then (please don’t read the book) which for a childless bachelor is a pretty reasonable way to get the most knowledge NYC has to give in a year. If you have particular questions about the monetary system, I know enough to either answer or know that I don’t know and refer you to someone who does.
  - dspillett 3y ago
    > If you have particular questions There were four fairly direct questions in the post you replied to, to which you might like to give a response: >> [what do you] mean [by] the "printing press to furnace" analogy of the economy >> what you mean by 1971 >> or the gold bug >> or the 50 year transistor The first of those I'm pretty sure I understand what you are meaning, though if I'm right about that I don't think it is a good analogy, but the others I have no context for.
    - benreesman 3y ago
      1971 (and/or 1973) is a year people often point to as when we “went off the gold standard”. Neither year is particularly great as a signal example of the collapse of what is loosely called the “Bretton Woods” monetary system, but either is a pretty good nickname for it. By “printing press” I mean the set of mechanisms in which fractional reserve deficit spending creates the money supply to notionally value future growth, and by “furnace” I mean the set of mechanisms by which we prevent arbitrary inflation as a result. You can measure the money supply in plenty of ways, but for someone who needs a glossary on my original comment, TLDR you want a number called “M2”. A “gold bug” is someone who either does or advocates the strategy of holding “precious” metals as a uniquely good asset class (no one turns down a free pile of gold, many of us think the market is pricing gold as well as we are), in particular an asset class uniquely resistant to inflation and/or the “government”. I can assure you from painful experience that “the government” gives no fucks if you have gold in your back yard when they make a clerical error. 50 years is roughly the period of time it took for at least two separate inventions of “the transistor” by a bunch of Bell Labs people, but overwhelmingly associated to a guy called Shockley, to culminate in a useful computer that a middle class person could afford to have in their living room. I learned to code on an IBM PC my distinctly middle-class grandfather owned, and it is a substantially better computer than no computer, a harder claim to make about the Apple I for example.
- shawabawa3 3y ago
  > "printing press to furnace" analogy of the economy Very roughly modern economies work by printing money in the form of government treasuries (government borrows $ to run the country) and destroys money by charging taxes (taxes go to IRS and are used to pay off the outstanding treasuries)
Workaccount2 3y ago
>A modern economy works by running a printing press a little faster than a furnace, I think you are confusing Modern Monetary Theory with modern economics. What you are describing is MMT, not what actually happens (the government collects taxes then spends that money + prints more money)
- benreesman 3y ago
  I’m aware of both Modern Monetary Theory as well as behavioral economics. I’m aware of what bankers say “off tape” or “LDL”, (“let’s discuss live”). I’ve worked places where we said “he was with us at Goldman”, because I’ve worked at places and during times that were so elite that my last name, Reesman, which is Dutch, was overlooked for “sounding too Jewish”, which is an actual thing I’ve been tapped on the shoulder about but still to this day don’t understand. I’m not aware of what social dynamics are in play when sounding too Jewish is an issue. Bet your ass New York bankers say shit like that though. You sir, like many, imply an academic knowledge of markets that would be tradable. If you know what’s wrong with my comment there’s serious money in it, and no one can buy the education you’re implying because the price would be the arb value of all the misprinted securities, trillions easily. I’m asserting that actual guys called names like Cavendish, who get the actual spread by virtue of being in jobs where you need a name like that laugh in their beer, I’ve been there and I’ve seen it. “You’ve never dealt with Harkonnens, I have, they’re not human they’re BRUTAL”. You’re free to disagree, and free to do so under a pseudonym. But if you know anything I don’t about markets generally and US sovereign debt markets in particular I don’t: fuck this HN shit and go trade it. You’ll own HN by the close of business tomorrow, and I will be the least of your worries.

whage 3y ago

This post feels like recent movie trailers. The way you wrote it makes me believe you know what you are talking about but I have no idea. Care to give the curious reader pointers to the topics you mention? I mean the "printing press to furnace" analogy of the economy, or what you mean by 1971 or the gold bug or the 50 year transistor omg what?

benreesman 3y ago
I’m just a nerd whose nerd hobbies came to encompass finance when I moved to Manhattan. I was also a party monster back then (please don’t read the book) which for a childless bachelor is a pretty reasonable way to get the most knowledge NYC has to give in a year. If you have particular questions about the monetary system, I know enough to either answer or know that I don’t know and refer you to someone who does.
- dspillett 3y ago
  > If you have particular questions There were four fairly direct questions in the post you replied to, to which you might like to give a response: >> [what do you] mean [by] the "printing press to furnace" analogy of the economy >> what you mean by 1971 >> or the gold bug >> or the 50 year transistor The first of those I'm pretty sure I understand what you are meaning, though if I'm right about that I don't think it is a good analogy, but the others I have no context for.
  - benreesman 3y ago
    1971 (and/or 1973) is a year people often point to as when we “went off the gold standard”. Neither year is particularly great as a signal example of the collapse of what is loosely called the “Bretton Woods” monetary system, but either is a pretty good nickname for it. By “printing press” I mean the set of mechanisms in which fractional reserve deficit spending creates the money supply to notionally value future growth, and by “furnace” I mean the set of mechanisms by which we prevent arbitrary inflation as a result. You can measure the money supply in plenty of ways, but for someone who needs a glossary on my original comment, TLDR you want a number called “M2”. A “gold bug” is someone who either does or advocates the strategy of holding “precious” metals as a uniquely good asset class (no one turns down a free pile of gold, many of us think the market is pricing gold as well as we are), in particular an asset class uniquely resistant to inflation and/or the “government”. I can assure you from painful experience that “the government” gives no fucks if you have gold in your back yard when they make a clerical error. 50 years is roughly the period of time it took for at least two separate inventions of “the transistor” by a bunch of Bell Labs people, but overwhelmingly associated to a guy called Shockley, to culminate in a useful computer that a middle class person could afford to have in their living room. I learned to code on an IBM PC my distinctly middle-class grandfather owned, and it is a substantially better computer than no computer, a harder claim to make about the Apple I for example.
shawabawa3 3y ago
> "printing press to furnace" analogy of the economy Very roughly modern economies work by printing money in the form of government treasuries (government borrows $ to run the country) and destroys money by charging taxes (taxes go to IRS and are used to pay off the outstanding treasuries)

Workaccount2 3y ago

>A modern economy works by running a printing press a little faster than a furnace, I think you are confusing Modern Monetary Theory with modern economics. What you are describing is MMT, not what actually happens (the government collects taxes then spends that money + prints more money)

benreesman 3y ago
I’m aware of both Modern Monetary Theory as well as behavioral economics. I’m aware of what bankers say “off tape” or “LDL”, (“let’s discuss live”). I’ve worked places where we said “he was with us at Goldman”, because I’ve worked at places and during times that were so elite that my last name, Reesman, which is Dutch, was overlooked for “sounding too Jewish”, which is an actual thing I’ve been tapped on the shoulder about but still to this day don’t understand. I’m not aware of what social dynamics are in play when sounding too Jewish is an issue. Bet your ass New York bankers say shit like that though. You sir, like many, imply an academic knowledge of markets that would be tradable. If you know what’s wrong with my comment there’s serious money in it, and no one can buy the education you’re implying because the price would be the arb value of all the misprinted securities, trillions easily. I’m asserting that actual guys called names like Cavendish, who get the actual spread by virtue of being in jobs where you need a name like that laugh in their beer, I’ve been there and I’ve seen it. “You’ve never dealt with Harkonnens, I have, they’re not human they’re BRUTAL”. You’re free to disagree, and free to do so under a pseudonym. But if you know anything I don’t about markets generally and US sovereign debt markets in particular I don’t: fuck this HN shit and go trade it. You’ll own HN by the close of business tomorrow, and I will be the least of your worries.