Is That A Debt, Or A Gift?

Mike helpfully calculates in the comments to the last GND post, "$94 trillion comes out to about $261,111 per person in the US." For a household of three, then, you'd be on the hook for $783,333 -- and American household net worth was only $81,850 in 2014 according to Census data.

"But we're going to take from the rich, not the average!" No, that data includes the rich. Once you've taken everything they have, and everything everyone else has, you're still not anywhere near where you'd need to be. You're around ten percent of the way there.

The new slogan, though, is that the idea shouldn't be that this spending will create a debt of $261,111 per individual. It is that this spending represents a gift of $261,111 per individual. They're going to make us all rich! Well, richer.

Inflation occurs when more money chases the same amount of goods. The argument here is that, yes, there will be more money -- we're going to print vast amounts -- but that it will also be chasing new goods: railroads, power plants, wind farms, batteries, refurbished houses. Inflation won't be a problem because the new money won't drive up the price of existing goods. It'll all be spent on the new stuff.

That's clearly wrong for elements of the deal like Medicare For All, which is going to be massive new spending on the same health care stocks that are available now. But it isn't clearly wrong for a lot of the GND's spending, which really does seek to create vast quantities of things that do not currently exist. Indeed, one of my major criticisms of it has been that it cannot possibly attain its goal of reducing emissions because we'd need to run the factories day and night to create the stuff they'd need -- cut down millions of trees for railroad ties -- boil millions of gallons of tar for creosote -- build new diesel plants -- vastly increase production of steel and aluminium for trains and windmills -- etc., etc. Carbon production would be through the roof precisely as a result of this plan.

Where, though, is the inflation? Factory workers are going to have new wages from all this overtime, and they're going to be using that wealth to chase existing goods; but maybe not the same goods. Maybe they'd like a new car -- one of the electric ones, no doubt, assuming they can get a government permission slip for it. Maybe they'd like new, more luxurious clothes. (Still not reducing emissions, are we?) It could be that new economic growth would occur rather than inflation, or more likely 'in addition to inflation,' but less than we imagine.

Inflation, such as did occur, would reduce the sting of any debt anyway.

That's the argument that's being made. We should think carefully about where it goes wrong, and how to counter it.


Ymarsakar said...

The human livestock pays taxes and thinks slavery is freedom. Lovely. And people kept telling me I was the dumb moron crazy guy... heh.

Ymarsakar said...

It doesn't matter if the State decides to spend 98 trillion or 30 billion on NASA> The point is that they decide, the shepherd decides, not the sheep and livestock. The livestock doesn't determine when to get on the truck to the slaughter house.

The job of a livestock is to pay their taxes, Sit Down, Shut Up, and Watch the SUperbowl. The DS doesn't need any backtalk out of the livestock.

The System itself is what determines your slavery. You only get an illusion of choice. So long as the fiat currency is controlled by the Federal Reserve, none of you, including your President Trum, can get out of the Slave System 3.0

Ymarsakar said...

Snowden knows things I do not and I know things he has never had access to.

He is not right about certain things but is closer than most Americans other than Yuri Bezmenov and crew.

I heard the NSA side of the Deep State civil war, the one that backed Trum, doesn't like Snowden. For obvious reasons. Trum won't give him a pardon of course as a result. It would piss off his backers or controllers.

E Hines said...

the idea shouldn't be that this spending will create a debt of $261,111 per individual. It is that this spending represents a gift of $261,111 per individual.

Eric Hines

douglas said...

Funny how in economies that have had massive inflation, I've never heard them extol these so-called good sides to it.

Tom said...

That's about the size of it, Eric.

Texan99 said...

Lordy, in discussing economics, people act like there's some easy magic to producing value, if they just lie about the monetary system. As if it were easy to produce value out of thin air, but we're uncountably failing to take advantage of the opportunity, and they can do it better. Just wave a wand, print money, and order everyone to produce more, at any level needed to match the amount of printed money! It's simple!

They don't even know what money is for.

Ymarsakar said...

Printing money is very useful. It is an indirect tax that can be set by the private conglomerate called the Federal Reserve, which is neither a reserve nor federal.

This indirect tax can be used to launder money and it can be used to use inflation as a taxation scheme. The whole point of a fiat currency system as it was designed originally, was to control the currency and by extension, the citizens that used the fiat currency so that they would be happy to live as slaves in Slavery 3.0, all the while thinking they were free and prosperous.

This con has been far more successful than embezzling or account book shenanigans or pyramid schemes by Enron/Madoff. Some Americans reacted with sanctimony and arrogant self righteousness when they wondered at how many people kept buying into Maddoff and Enron's schemes. They shouldn't be surprised, since most of their countrymen, including they as well, have bought into something even better.