THE BLOG
of John GellesNovember 6, 2006
ENDING UNMET NEED FOR SURE, FOREVER
It is the demand of critics of America and its hegemonic dollar that interest and tax burdens that flow (from its under-performing monetary system of production) to the owners of just plain money be reduced to their essential minimum. Much of this resented flow is to pension and insurance funds and to foreign governments and banks. So the cash flow is not all going to the very rich.
In fact, the very rich like to enjoy greater returns on their investments than those paid by US Government bonds.
So the payment of interest (and, indirectly, taxes) to the very rich is not what most troubles an informed critic of the national debt and its effect: it is the effect on production of the things that money can buy (and the masses need), and the effect on employment and incomes of the masses that is the problem the critics want addressed.
The critics want government to spend money into circulation to buy all the cures to unmet need.
They find that fear of hyperinflation stands in their way.
What if government focused on maintaining high production of essentials—at affordable prices for everyone—and allowed all non-essential purchases to absorb excess money in circulation the way interest and taxes do today?
Among its many options for fighting hyperinflation, other than interest and unemployment, government may contract for and subsidize the production of essentials; it can protect savings from inflation by indexing savings accounts; it can allocate resources in favor of essential production; it can tax products that waste resources; etc.
If a bipartisan consensus will see the possibilities above, we will be able to implement economic reform to end unmet need without taxpayer resistance to change that favors all of them..