NETWORK  FOR  ECONOMIC  DEMOCRACY     Emails to Hummel

NAVIGATION Home Money Jobs Outsourcing Fed Dividend Savings&Taxes Debt & Wealth Plutocracy? Agenda Members Non-Member Sites we like Reader Reply temp Blank Page

Subject: Network for Economic Democracy Mon, November 16, 2009 10:36:11 PM TO: wfhummel@gmail.com; John Gelles <indexed-savings@sbcglobal.net Dear Bill, Your http://wfhummel.cnchost.com/index.html is certainly a masterpiece. I am doing a nice site http://www.ustaxreform.us/nfed1.htm I think you will like it. Our disagreements I believe are pretty much resolved with QUANTITATIVE EASING.  We are back to a more modern edition of Eccles and Morgenthau and green-bond greenbacks for debt-free, tax-free money finance of emergencies like wartime procurement and fighting deflation. You may note on my site there is a NON-Member list with your site on it. You are the first. But there will be many more. I do not expect you to join the Network; but I would appreciate your critique of its consensus procedures, as well as its substantive idea on current recovery policy. I have tried to base my thinking of Forstater and Lerner. The indexed savings is my own touch, as is the consensus machine that has no guru at the top or at the gate: it's a non-gatekeeper system that can never censor and never needs to. John Novenber 17, 2009 Dear William, I sent you an email last night using your mailto link. It discussed my new site, the Network for Economic Democracy. The letter is copied to: http://www.ustaxreform.us/nfed-to-hummel111609.htm This morning I have started a pseudo debate with you on subject question: http://www.ustaxreform.us/nfed-hgd1.htm My argument will focus on inflation-protected savings accounts to hold back surplus purchasing power as savings replace both taxes and actual (and potential) debt in our monetary system of production. It will be predicated on Ron Morrison's estimated percentage of greenbacks to total money supply, say 50%. In my mind at the moment I can see this parentage moving from 50% to a much lower percentage over time. The change from debt to cash as the fuel for a modernized monetary system of production would invite ordinary people with large estates in their lifetime and at death to be involved with philanthropy (for which there is infinite room to do good) as the final substitute for taxes in the macro-economy. RSVP 18 November Dear William,     1. I re-read my debate page with good neighbor out loud.     2. It really stunk.  (Talk about really necessary taxes.) http://www.ustaxreform.us/nfed-hgd1.htm     3. Re-wrote it. I think I like it.You may remember when you first appeared on PKT. I remarked at the time how clearly you explained whatever it was at the time. Your whole site remains at that high standard. Of course things have changed and the system we had, and China and others copied, is kaput. We will have to go debt-free tax-free injections money for  major investments. I believe Keynes Without Debt has it right. http://www.ustaxreform.us/nfed-kwod.htm I still hope to hear from you on NFED and the debate. Yet I will fully understand if you have not the time or inclination to comment. John   DEBATE: Are Taxes Really Necessary? (NO) By John Gelles versus   William Hummel (on the previous page) (Undertaken without the permission of William Hummel) Taxes are really  NOT necessary. Rather, they are a drag on investment and consumption—as they disturb a system in perpetual need of money's power to motivate us to produce what people want, and want more than they have. (Not that people should want more and more—forever. Rather, they should want less—and especially, they should want to end poverty and pollution from now till the end of time. And they would if given the chance.) To understand the question (and this debate) we must accept the fact that IF an elected government could earn more money from the sale of oil (or gold) than all its costs and gifts combined, it would never tax the voters and expect to remain in office. What then do to earn money that way?  How can they do it and therefore save the cost of collecting taxes—and avoid the hate of voters who would rather have the money than a receipt for taxes paid.? Answer: they can coin money out of gold, print it on counterfeit-proof paper, or issue it into bank accounts invulnerable to loss. (Such answer, does say what to sell instead of oil or gold. In fact, it can be anything and everything produced for domestic or global purchase. It is that production that will back the money of a nation without taxes.) All of the aforesaid money will be new and persistent when in use. It will be new if government spends it into initial circulation. And it will be persistent, because, unlike debt-based money, it does not evaporate. when the debt is re-paid. But if governments do that—each time they spend money (never collected as revenue or borrowed) and such spending adds to the money supply forever, there will come a day when people (who receive what government spends) will own, in total, more money than they need. (As the money supply grows immense, it may relieve consumers from all debt. This would not be bad. It is more or less the way people were when marginal farming, hunting and fishing protected them from sharp commercial trade. But, inflation is no friend of the consumer of today. We must control it as it is felt.) So, the trick to avoiding taxes is to have people save until they have too much money (for them to want to get out of bed.?)  When will that be.? Savings will be too high if they lose value for not being invested or wisely spent. So, the next thing we must do is protect savings from inflation: this means imitating what we do for inflation protected securities issued by governments now.  We call such issues TIPS bonds (for treasury inflation protected securities). (We could call such protection of tax-free money, "indexed savings accounts".) In addition to protecting savings in a tax free system, philanthropy can be counted on to prevent the accumulation of too much (new and persistent) money. Long before the poorest person is a billionaire, the effect of so much money on prices and wages will be to make hard and dangerous work really  pay well.  It will pull the price of necessities higher than we want—if we expect people to work instead of living on their savings, gifts or inheritances. If this occurs, the price for ending all taxes may be to implement price control for all necessities. Is limited price control more inefficient and ugly than taxes? I think not. I think I have proved William Hummel wrong on the necessity or desirability of taxes. Taxes are not preferable to indexed savings and limited price control (like rent control in the city).  What do you think?  What do you think of holding tight to attempts by government to manage full employment and stable prices with interest rate controls that cannot do the job.  Is it not time to change all that.? go to DEBATE-page 1