Good Morning Ted and Jody:
I have been doing a bit of thinking about economic policies of late. I know this will come as a shock ot fiscal and monetary policy makers, but economic growth (prosperity or just activity) is a result of people having access to money and spending it. Not only that, but putting large amounts of money into the hands of a few (banks and primary buyers and sellers in the FED (Federal Reserve Bank) open market operations and Treasury sales) actually reduces the money available to be spent (they, infect, take a cut or commission) and slows economic activity (trickle down takes time and is very sloppy). Finally, transfer payments (the way we seem to want to fight poverty is to keep the poor poor and dependent upon handouts) do not stimulate the economy, cause resentment in those from whom the transfers are taken, retard the ability of recipients (the poor) to creatively improve their economic position, and perpetuate a class of people dependent upon those transfer payments from generation. For in the last case, those receiving transfer payments are not able to amass sufficient savings to provide a base of their children to move up the economic ladder.
I have proposed in my blog, democratizemoney, that a simple change in the way we create new money might begin to address the problems I have noted. In essence, I would give every citizen participating in the political process (voting and jury duty come to mind) a monthly stipend of new money created by the FED. The FED is creating the money anyway.
Economists argue that things are scarce because people’s wants can never be satisfied. To whit, we always want more of most things, but at least more of somethings. Hence, since people’s wants can not be satisfied, they will do something to get more. Hence, I would argue, if the economist’s assumption of the reason for scarcity is valid, then giving people a regular income of new money would not create a class of people who won’t work. On the contrary, if you give me a little bit of chocolate, I will want a lot more. So, I am arguing that the taste of part of the good life will entice people to work to get more of the good life.
I have heard the argument that the poor are lazy or unwilling to work. This is nonsense. If you watch a poor person you will find that person working their rear end off to get simple things—going to great lengths to stay warm, fed and sheltered. Being poor is not a picnic.
Making the change from the way things are now to my proposal was address by Hamilton in the Forward to the Federalist papers. Hamilton argued that those with the cushy life opposed change (the adoption of the US Constitution back in the late 1780s) in an attempt hang on to the good life. I would submit the same would be true of those opposed to the changes I propose. However, ironically, even those having the cushy life now would be better off with the change, both absolutely and relatively. fully how they fight change.
It seems clearer and clearer to me that our system of producing money gets in the way of economic, social and political progress. It also seems to me that they way we use money to bolster the present system (campaign finance) only contributes to holding the people back.
I think I am becoming passionate about making monetary and campaign finance changes in my old age.
Warmest Regards, Ed
PS: There was a small window for taking outside photos today so I took one. While we supposedly get a lot of rain here in the Pacific Northwest, if Noah had to depend on our rain fall to float the Arc, he would be waiting still.