Its almost as if you see no relationship between how much money is created/printed and that float thing you casually mention.
I did not mention it casually. It is essential to allow the exchange rate to float for the government to have fiscal freedom. Trying to defend an inappropriate exchange rate by fucking up the economy is backwards and always fails in the end anyway.
Indeed they do, with the government's permission. But they do it by lending so when everyone is maxed out the government must take up the slack or allow the economy to shrink.
Money can also enter the economy through a foreign trade surplus, a thing of ancient legend unless you're Chinese or German. Foreign trade is a zero sum game overall so it's dumb to think every country can have a surplus.
The US government has a sovereign currency: it is non-convertible, the exchange rate floats, no-one else can create it without their permission.
The government can spend as much money into existence as it needs to meet its policy goals. It does not need to borrow or tax to do this, though tax is essential and useful for other reasons.
Inflation can occur if it overdoes it by spending more than the economy has the capacity to produce. So it shouldn't do that. But it is a long way from there now.
So why doesn't it? A lack of understanding and an ideological opposition to the government doing anything. For many people of power and influence high unemployment is not a problem, it is a policy.
At no time has Monsanto gone after a farmer for accidental use of Monsanto seeds.
That is an implicit admission that Monsanto has 'gone after' farmers for using Monsanto seeds. Monsanto's 'intellectual property' has therefore caused problems for farmers who were doing things that in the past were SOP.
BSD license = you are free to do with the software what you want. GPL license = we are going to dictate what you may do and what you may not, which products it is acceptable to build, etc.
Sounds like one of those is much freer than the other...
BSD License = you are free to enslave your users. GPL License = you are not free to enslave your users.
The Government can issue as much (sovereign) money as it likes without causing inflation provided it is in exchange for new wealth so the wealth per dollar ratio is maintained. The limit is the capacity of the economy and ecosystem to produce wealth. Exceeding this will cause inflation. Borrowing is entirely optional.
The causes of hyperinflation are a little more involved than the popular narrative you relate. See Michael Hudson's definition here: H is for... A more detailed examination of Weimar and Zimbabwe here: Positive Money A fuller explanation of the whole borrowing/spending thing here: Warren Mosler
it is backed by the US government bomd rating (credit score) which the government must maintain because they survive on debt. If the govt devalued the currency beyond expected inflation rate, that would be constructive default on their debt, which is denominated in dollars. If they did that, no-one would lend them money anymore and they'd be unable to function.
The US Government can create dollars out of nothing (and therefore without limit). It can never default on dollar denominated debts (unless it wants to), nor go bankrupt. It does not need to borrow a cent to function, the only reason it does is because it can control the interest rate that way and (it thinks) that has some effect on the money supply and hence the economy.
People have little incentive to build and grow on land they do not own.
In the UK all land is 'owned' by the 'Crown'. There are several buildings and farms though, as the people using the land have freehold or leasehold contracts (in effect) with the Crown. In fact most people are unaware of this legal nicety and go about their business as if they owned land themselves.
I don't suppose the World Bank has mentioned it, but the private monopolisation of land also has some negative effects, as famously noted by Henry George.
So what you're saying is that because we've let our trade deficit run unchecked for many decades, eventually all our property will be owned by the foreign interests.
Is this an accurate summary?
The first part of this process is that the US gets all the wealth that China has produced, and China gets all the money the US has produced. This is obviously a better deal for the US. The second part of the process is China buys US wealth with their US money. Naturally they will buy the good stuff, not the crap they sold before. So in the end the US has swapped its infrastructure and capital for trinkets. Not such a good deal.
I'm trying to identify the false assumptions made by standard economic theory
To prevent the collapse of Western Civilization due to complete automation and unfettered rent-seeking we need to institute these three policies:
Universal Basic Income which will replace most forms of welfare. However, this will not work without...
Land Value Tax based on the rental value of land not including any improvements. This will replace most other forms of taxation. For this to have the desired effect we also need...
Full Reserve Banking which will remove the ability of banks to create money and then charge interest on it.
Private natural monopolies and every other form of rent extraction must be hunted down and neutralised.
If we don't do these things the booms and busts will continue to ratchet up wealth inequality until the economy collapses and the peasants revolt.
I live in the rural third world. I pay 15 USD per GB for slow and flaky 3G mobile internet. So I ssh into an old laptop at my father's house in the UK to download media from iPlayer or usenet or bittorrent using his comparatively luxurious broadband. Then every couple of months he copies it onto micro SD cards and mails them to me. Then I mail them back. Not exactly instant gratification, but I get what I want eventually and it costs next to nothing. To watch them I just use mplayer on my laptop with a Logic3 clock-radio for better sound.
I've been reading a lot of economics the last few years, trying to figure out why it's so full of shit. It seems mainstream (neoclassical/keynesian synthesis) economists believe in mathematics but don't believe in reality. Their close kin the Austrians don't believe in mathematics either. They both believe economies are in equilibrium, this is a fundamental assumption, and other nonsense like 'people behave rationally', 'people have perfect information' etc. These are not a priori assumptions like a physicist might make but come out of their theories and without which they do not work. This does not phase them.
Along the way I have discovered System Dynamics, a way of modeling complex dynamic systems which seems well suited to studying economics. There is an economist using this, he has designed his own System Dynamics software called Minsky, and unlike Krugman, Rogoff et al. he makes a lot of sense. His name is Steve Keen and you can get Minsky from here: Windows, Mac or here: Linux. He has an excellent book: Debunking Economics and you will find him on YouTube too.
There have been experiments in this before. Here's one in a small village in Namibia: Otjivero It seems everyone thought it was a success except the local farmers who enjoyed the large pool of minimum wage labour. There's no indication that they actually lost out but they feared they would.
Lakenheath and Mildenhall most certainly are active USAF bases. Menwith Hill and Croughton are coms/listening posts and radar stations. Alconbury is some sort of support facility. That does not seem to be an exhaustive list but some of the bases may have been closed since I last paid them attention (eg. Upper Heyford, where I once attended an air show). Mildenhall and Alconbury are slated for closure.
The vast majority of those "bases" have just a handful of guys. That's not a base.
That's 132 countries not bases. There's 44 air bases and 22 naval bases according to Wikipedia (if my tired eyes are counting right). Some of those countries have over 100 'bases'. Even a small base can eavesdrop, run agents, torture abductees etc. What else are they for? How would you feel if even Canada (say) had 100 military bases in the US? What sovereign country would allow that?
With good reason, too, which became clear soon after.
Yes, Iraq was a monumental fuckup on almost every level. But it was a strategic goal for the Neo-cons who aren't happy it has been given up, ISIS or no.
132 countries have permanent bases (not counting 'black' sites). Some of those in Europe, and no doubt elsewhere, have nuclear weapons. The stronger countries are probably not much intimidated by the military presence as such, it just forms part of the overall control mechanism. The weaker countries are essentially not free to choose a government opposed to US hegemony. Iraq is a special case, there are many in Washington who are furious that Obama agreed to (mostly) leave. Guess which major Western European country has no US bases.
So when the US doesn't fit the criteria for empire you just change the meaning of the word until it fits.
I have not changed the meaning of the word, the GP sought to (re)define it narrowly so as to exclude its current leading exponent. Since it is traditionally used for such diverse organisations as the Mongol Empire and the British Empire to try to pretend it doesn't also apply to the "Washington Consensus" smacks to me of exceptionalism and self-delusion. Having said that, even if we accepted GLMDesign's definition, three-quarters of the countries in the world currently enjoy a US military presence on their soil. I'm sure this has no effect at all on the excercise of their sovereignty.
If troops aren't controlling your interaction it is not an imperial relationship.
That's an old-fashioned view. The modern empire uses economics as its primary means of control. Economic dependency is encouraged by bribing leaders, tailoring economic theory, foreign 'aid' and 'investment', intervention by 'international' institutions such as the World Bank and IMF, sanctions, blockades, and so forth. Foreign leaders who pursue independence and decline the bribes find themselves voted out in rigged elections, or overthrown in 'local' coups and 'revolutions', or assassinated. Only if all that fails do the troops invade, a friendly government is installed and a permanent military base is established to discourage backsliding. After that it's Hotel California...
2) France asked America to help in Vietnam which we did.
No. When France quit Vietnam after Dien Ben Phu the US decided it would suck up the remnants of the French Empire as it had done for the Spanish and British Empires. Oh, and Communism.
3) reagan tried to stop massacre in Libya, but showed yellow belly when we were attacked.
What massacre? Gadaffy was a murderous nutter (though no more so than many 'friends' of the US) but more importantly he had oil.
4)we did go into Panama but only to stop noreiga.
Not really. It was to regain control of the canal which had been given to Panama by Carter.
We also invaded Grenada to stop a coup that had ussr, North Koreans, and Libyan soldiers helping
That is complete bullshit. There were 700 Cuban soldier/workers. There are a few more than that only 90 miles from the US at all times. Not sure if you are referring to the original Bishop coup or the US inspired counter coup.
America has only responded to events that others did.
If you look a bit deeper you will find that in most cases the 'others' were provoked (often covertly) by the US into giving them an excuse.
Slashdot Mirror
Its almost as if you see no relationship between how much money is created/printed and that float thing you casually mention.
I did not mention it casually. It is essential to allow the exchange rate to float for the government to have fiscal freedom. Trying to defend an inappropriate exchange rate by fucking up the economy is backwards and always fails in the end anyway.
Banks create money
Indeed they do, with the government's permission. But they do it by lending so when everyone is maxed out the government must take up the slack or allow the economy to shrink.
Money can also enter the economy through a foreign trade surplus, a thing of ancient legend unless you're Chinese or German. Foreign trade is a zero sum game overall so it's dumb to think every country can have a surplus.
You do realize that 'float' you speak of is actually sitting on the back of every US taxpayer?
Not sure what you mean. You think a fixed exchange rate would be better for some reason?
The US government has a sovereign currency: it is non-convertible, the exchange rate floats, no-one else can create it without their permission.
The government can spend as much money into existence as it needs to meet its policy goals. It does not need to borrow or tax to do this, though tax is essential and useful for other reasons.
Inflation can occur if it overdoes it by spending more than the economy has the capacity to produce. So it shouldn't do that. But it is a long way from there now.
So why doesn't it? A lack of understanding and an ideological opposition to the government doing anything. For many people of power and influence high unemployment is not a problem, it is a policy.
At no time has Monsanto gone after a farmer for accidental use of Monsanto seeds.
That is an implicit admission that Monsanto has 'gone after' farmers for using Monsanto seeds. Monsanto's 'intellectual property' has therefore caused problems for farmers who were doing things that in the past were SOP.
-- George Bernard Shaw, famous socialist
... and satirist.
BSD license = you are free to do with the software what you want.
GPL license = we are going to dictate what you may do and what you may not, which products it is acceptable to build, etc.
Sounds like one of those is much freer than the other...
BSD License = you are free to enslave your users.
GPL License = you are not free to enslave your users.
As a user I know which seems freer to me.
The Government can issue as much (sovereign) money as it likes without causing inflation provided it is in exchange for new wealth so the wealth per dollar ratio is maintained. The limit is the capacity of the economy and ecosystem to produce wealth.
Exceeding this will cause inflation. Borrowing is entirely optional.
The causes of hyperinflation are a little more involved than the popular narrative you relate. See Michael Hudson's definition here: H is for...
A more detailed examination of Weimar and Zimbabwe here:
Positive Money
A fuller explanation of the whole borrowing/spending thing here: Warren Mosler
it is backed by the US government bomd rating (credit score) which the government must maintain because they survive on debt. If the govt devalued the currency beyond expected inflation rate, that would be constructive default on their debt, which is denominated in dollars. If they did that, no-one would lend them money anymore and they'd be unable to function.
The US Government can create dollars out of nothing (and therefore without limit). It can never default on dollar denominated debts (unless it wants to), nor go bankrupt. It does not need to borrow a cent to function, the only reason it does is because it can control the interest rate that way and (it thinks) that has some effect on the money supply and hence the economy.
People have little incentive to build and grow on land they do not own.
In the UK all land is 'owned' by the 'Crown'. There are several buildings and farms though, as the people using the land have freehold or leasehold contracts (in effect) with the Crown. In fact most people are unaware of this legal nicety and go about their business as if they owned land themselves.
I don't suppose the World Bank has mentioned it, but the private monopolisation of land also has some negative effects, as famously noted by Henry George.
So what you're saying is that because we've let our trade deficit run unchecked for many decades, eventually all our property will be owned by the foreign interests.
Is this an accurate summary?
The first part of this process is that the US gets all the wealth that China has produced, and China gets all the money the US has produced. This is obviously a better deal for the US.
The second part of the process is China buys US wealth with their US money. Naturally they will buy the good stuff, not the crap they sold before. So in the end the US has swapped its infrastructure and capital for trinkets. Not such a good deal.
I'm trying to identify the false assumptions made by standard economic theory
This will help: Debunking Economics
To prevent the collapse of Western Civilization due to complete automation and unfettered rent-seeking we need to institute these three policies:
Universal Basic Income which will replace most forms of welfare. However, this will not work without...
Land Value Tax based on the rental value of land not including any improvements. This will replace most other forms of taxation. For this to have the desired effect we also need...
Full Reserve Banking which will remove the ability of banks to create money and then charge interest on it.
Private natural monopolies and every other form of rent extraction must be hunted down and neutralised.
If we don't do these things the booms and busts will continue to ratchet up wealth inequality until the economy collapses and the peasants revolt.
I live in the rural third world. I pay 15 USD per GB for slow and flaky 3G mobile internet. So I ssh into an old laptop at my father's house in the UK to download media from iPlayer or usenet or bittorrent using his comparatively luxurious broadband. Then every couple of months he copies it onto micro SD cards and mails them to me. Then I mail them back. Not exactly instant gratification, but I get what I want eventually and it costs next to nothing.
To watch them I just use mplayer on my laptop with a Logic3 clock-radio for better sound.
Prince of Persia: Sands of Time was surprisingly good I thought.
Who stands to gain from increasing government (specifically environmental regulaton)?
Only people who live in an environment, the self-serving scum.
I've been reading a lot of economics the last few years, trying to figure out why it's so full of shit.
It seems mainstream (neoclassical/keynesian synthesis) economists believe in mathematics but don't believe in reality.
Their close kin the Austrians don't believe in mathematics either.
They both believe economies are in equilibrium, this is a fundamental assumption, and other nonsense like 'people behave rationally', 'people have perfect information' etc.
These are not a priori assumptions like a physicist might make but come out of their theories and without which they do not work. This does not phase them.
Along the way I have discovered System Dynamics, a way of modeling complex dynamic systems which seems well suited to studying economics. There is an economist using this, he has designed his own System Dynamics software called Minsky, and unlike Krugman, Rogoff et al. he makes a lot of sense.
His name is Steve Keen and you can get Minsky from here: Windows, Mac or here: Linux.
He has an excellent book: Debunking Economics and you will find him on YouTube too.
There have been experiments in this before. Here's one in a small village in Namibia: Otjivero
It seems everyone thought it was a success except the local farmers who enjoyed the large pool of minimum wage labour. There's no indication that they actually lost out but they feared they would.
This is pretty cool: empire
Those aren't US bases at all.
Lakenheath and Mildenhall most certainly are active USAF bases. Menwith Hill and Croughton are coms/listening posts and radar stations. Alconbury is some sort of support facility.
That does not seem to be an exhaustive list but some of the bases may have been closed since I last paid them attention (eg. Upper Heyford, where I once attended an air show). Mildenhall and Alconbury are slated for closure.
The vast majority of those "bases" have just a handful of guys. That's not a base.
That's 132 countries not bases. There's 44 air bases and 22 naval bases according to Wikipedia (if my tired eyes are counting right). Some of those countries have over 100 'bases'. Even a small base can eavesdrop, run agents, torture abductees etc. What else are they for?
How would you feel if even Canada (say) had 100 military bases in the US? What sovereign country would allow that?
With good reason, too, which became clear soon after.
Yes, Iraq was a monumental fuckup on almost every level. But it was a strategic goal for the Neo-cons who aren't happy it has been given up, ISIS or no.
132 countries have permanent bases (not counting 'black' sites). Some of those in Europe, and no doubt elsewhere, have nuclear weapons.
The stronger countries are probably not much intimidated by the military presence as such, it just forms part of the overall control mechanism. The weaker countries are essentially not free to choose a government opposed to US hegemony. Iraq is a special case, there are many in Washington who are furious that Obama agreed to (mostly) leave.
Guess which major Western European country has no US bases.
So when the US doesn't fit the criteria for empire you just change the meaning of the word until it fits.
I have not changed the meaning of the word, the GP sought to (re)define it narrowly so as to exclude its current leading exponent.
Since it is traditionally used for such diverse organisations as the Mongol Empire and the British Empire to try to pretend it doesn't also apply to the "Washington Consensus" smacks to me of exceptionalism and self-delusion.
Having said that, even if we accepted GLMDesign's definition, three-quarters of the countries in the world currently enjoy a US military presence on their soil. I'm sure this has no effect at all on the excercise of their sovereignty.
If troops aren't controlling your interaction it is not an imperial relationship.
That's an old-fashioned view. The modern empire uses economics as its primary means of control. Economic dependency is encouraged by bribing leaders, tailoring economic theory, foreign 'aid' and 'investment', intervention by 'international' institutions such as the World Bank and IMF, sanctions, blockades, and so forth.
Foreign leaders who pursue independence and decline the bribes find themselves voted out in rigged elections, or overthrown in 'local' coups and 'revolutions', or assassinated.
Only if all that fails do the troops invade, a friendly government is installed and a permanent military base is established to discourage backsliding. After that it's Hotel California...
Get your fucking military out of half the world's countries.
More like three-quarters.
2) France asked America to help in Vietnam which we did.
No. When France quit Vietnam after Dien Ben Phu the US decided it would suck up the remnants of the French Empire as it had done for the Spanish and British Empires. Oh, and Communism.
3) reagan tried to stop massacre in Libya, but showed yellow belly when we were attacked.
What massacre? Gadaffy was a murderous nutter (though no more so than many 'friends' of the US) but more importantly he had oil.
4)we did go into Panama but only to stop noreiga.
Not really. It was to regain control of the canal which had been given to Panama by Carter.
We also invaded Grenada to stop a coup that had ussr, North Koreans, and Libyan soldiers helping
That is complete bullshit. There were 700 Cuban soldier/workers. There are a few more than that only 90 miles from the US at all times. Not sure if you are referring to the original Bishop coup or the US inspired counter coup.
America has only responded to events that others did.
If you look a bit deeper you will find that in most cases the 'others' were provoked (often covertly) by the US into giving them an excuse.