The Emperor's New Clothes: How to Pay off the National Debt & Give a 28.5% Tax Cut

Finnbar01

I offer a £1,000 reward for anyone who can tell me why this logically won’t work, practical politics, for now, being another matter.
What follows is an attempt to show you that this can be done.
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I am going to tell you that our Emperor – the government – has no clothes and is indeed naked with respect to our money. The sooner we realise this the better. Then we can make real progress and prevent the imminent misery. Indeed, the realisation of its nakedness should reveal that we have a unique moment in history to do something very special: to make banking secure, pay off the national debt, and even enable a 28.5% income-tax cut.

Does he have a good plan.

http://www.cobdencentre.org/2010/05/the-emperors-new-clothes-how-to-pay-off-the-national-debt-give-a-28-5-tax-cut/

ei.sdraob

sigh after printing 200 billion in UK this guy (Mugabe school of Economics graduate ) is now proposing to print another 800 billion, whatcouldpossiblygowrong

yes you could get your cash (uk pounds) back, except it be worth sweet **** all

PeakOutput

ei.sdraob wrote: »

sigh after printing 200 billion in UK this guy (Mugabe school of Economics graduate ) is now proposing to print another 800 billion, whatcouldpossiblygowrong

yes you could get your cash (uk pounds) back, except it be worth sweet **** all

while i tend to agree with you he cites plenty of respected economists who have apparently agreed with this type of plan so do you think he is misunderstanding them or they are all wrong aswell?

ei.sdraob

PeakOutput wrote: »

while i tend to agree with you he cites plenty of respected economists who have apparently agreed with this type of plan so do you think he is misunderstanding them or they are all wrong aswell?

where where these economists when most of the world where blowing an ever bigger bubble and ploughing head long into a pile of ****

anyways see sig...

eoinbn

It's just a form of monetary reform. He isn't talking about printing new money he is talking about printing £800bn that currently exists in the form of debt-95% of the words money exists as debt, not as hard cash.

ei.sdraob

eoinbn wrote: »

It's just a form of monetary reform. He isn't talking about printing new money he is talking about printing £800bn that currently exists in the form of debt-95% of the words money exists as debt, not as hard cash.

read slowly what you just typed

this quite literary is money printing of physical money in order to directly expand the M0, not just the quantitative easing type that was undertaken so far (200 billion in case of UK where the author is from)

as I said Mugabe would be proud

johnnyskeleton

eoinbn wrote: »

It's just a form of monetary reform. He isn't talking about printing new money he is talking about printing £800bn that currently exists in the form of debt-95% of the words money exists as debt, not as hard cash.

You mean as deposits, not debt. But even if it is, so long as the 95% that is deposits stays on deposit then there is no problem.

The solution presented in the OP is to wipe out all savings and debts, create a shedload of new pound notes, then give it to the banks to loan out. So, if you are a bank or a debtor it is a great idea. If you are a saver, not so much. I'm still not sure whether he is taking the piss or not and trying to expose the quantitive easing advocates as the emperor's fawning yes men.

No real world economy would do such a thing, other than Zimbabwe as pointed out above. UK and US efforts at QE are not nearly as bad.

eoinbn

You mean as deposits, not debt.

Sorry, in this case deposits, which the bank counts as a debt!

ei.sdraob wrote: »

read slowly what you just typed

this quite literary is money printing of physical money in order to directly expand the M0, not just the quantitative easing type that was undertaken so far (200 billion in case of UK where the author is from)

as I said Mugabe would be proud

I know what I typed. All he is suggesting is replacing money that is suppose to exist with money that does exist. That will NOT cause inflation.

However what I don't understand is that he saws that banks will have to maintain 100% of the deposits in reserves but then he says that the bank will now loan out the real money.

Scarab80

eoinbn wrote: »

However what I don't understand is that he saws that banks will have to maintain 100% of the deposits in reserves but then he says that the bank will now loan out the real money.

He is talking about maturity matching there. Demand deposits would be held 100% in reserves - the depositers would not earn interest and would in fact have to pay warehousing fees.

If you wanted to earn a rate of return you would have to leave your deposit for a fixed term which would be matched against a similar fixed term loan.

George Orwell 1982

ei.sdraob wrote: »

read slowly what you just typed

this quite literary is money printing of physical money in order to directly expand the M0, not just the quantitative easing type that was undertaken so far (200 billion in case of UK where the author is from)

as I said Mugabe would be proud

Paul Krugman is a nobel prize winning economist and he is infavour of quantitative easing.

Read some of his blog:
http://krugman.blogs.nytimes.com/2010/06/19/the-facts-have-a-well-known-keynesian-bias/

"You know, some people might take the fact that what’s actually happening is exactly what people like me were saying would happen — namely, that deficits in the face of a liquidity trap don’t drive up interest rates and don’t cause inflation — lends credence to the Keynesian view."

ei.sdraob

RTFA, this goes way beyond quantitative easing and talks about directly printing cash, there is a difference

George Orwell 1982

ei.sdraob wrote: »

RTFA, this goes way beyond quantitative easing and talks about directly printing cash, there is a difference

Agreed.

Scarab80

ei.sdraob wrote: »

RTFA, this goes way beyond quantitative easing and talks about directly printing cash, there is a difference

Your are discounting everything else in the article and focusing on the printing of cash. What he is advocating is a transition to Austrian economics - the elimination of fractional reserve banking. If this was done by itself it would have a massive deflationary impact, hence the printing of cash to cancel this out.

ei.sdraob

thanks ,
i didnt read the comments when working this morning
and missed the bit with the author going on about fixing the total money supply at x units, which he doesn't mention in the article itself ...