So why are pensions to current retirees funded by current employees?

On Mon, 10 May 2010 22:40:34 -0400, Les Cargill wrote:


Yet insolvency is not possible in a true fiat system. You are merely confirming my thesis. The problems in historical cases were a lack of appropriate taxation. Understanding that governments print their own money is the easy part. The hard part comes when we have to figure out how to keep the amount of money under control. Taxing the producers in the economy as opposed to taxing the wealthy owners is always the kiss of death.

Why are you changing the subject? Why are you talking about communism and nationalizing industries and such? I am talking about insurance systems and fiat money. And fiat money is what we currently have but for the invasion of the interest/rent sucking "financial thieves".

And again.... Why are you changing the subject?

That isn't a "we". It is the Libertarian and the right winger that does not know how to do it. The sane people just need a little bit of education and they will figure it out for themselves. The rightarded will NEVER allow themselves to figure it out and will fight like hell to keep the regular folks from finding out how to do it.
--
"Senate rules don't trump the Constitution" -- http://GreaterVoice.org/60

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Michael Coburn wrote:

Yet it *has* happened. Chile is just an example where it spread and took a regime down.

It's frequently difficult to tell the difference.

Ah, I'm not. If you haven't seen/read "The Ascent of Money", Ferguson's principal thesis is that social insurance programs cannot be extended indefinitely. Even worse, it's not possible to know how far you can go. You run up against confidence in your paper (bonds) in the international markets.
His is hardly a flawless exposition, but it's essentially sound.
The nationalization was part of Allende's plan to provide extended social insurance. That is why I brought it up.
<snip>

I fear it's beyond just right-wingers or inflation hawks. After all, the last round of contagion was as much people desperately trying to figure out how to allocate all the Greenspan pumping from '02-03 forward as anything else.

-- Les Cargill
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On Tue, 11 May 2010 01:17:52 -0400, Les Cargill wrote:

http://en.wikipedia.org/wiki/Insolvency
If an entity can simply print money then it "technically" cannot become insolvent. I do, however, appreciate the fact that currency may not _serve_ as money. Unless the regime can reclaim its currency then currency is _NOT_ money.

It is not really necessary to be that precise. Indirect taxation such as taxation of land values and other asset values and excise taxes on frivolous or harmful consumption do not tax real prosperity. Taxation of imported goods that can be produced internally can actually enhance internal production. The most stupid tax in the universe is a wage tax applied to median wage income and below or a consumption tax applied to general goods and services. i.e. a VAT. Why do stupid people continually want to directly tax actual production. And general consumption is just the other side of production.
But a word needs be inserted here concerning social insurance systems. These systems should tax production as a mainstay because the tax is an insurance premium as opposed to a true tax that would be invested in defense, and property rights` enforcement. It is entirely reasonable, however, to subsidize such insurance systems with asset taxes or to use excess revenues during "good times" to acquire mineral rights and direct ownership of sovereign natural resources such as land owned by the private sector. Based on such state ownership, rents can be used instead of taxes. But the bulk of the support for such systems must be taken from the productive beneficiaries of the system. When regimes attempt to tax production and wealth accumulation too heavily in the pursuit of "social justice" or some other touchy feely crap then these insurance systems become unsustainable. This unsustainability can be prevented by proper and honest accounting and transparency, and, as I said above, by acquiring rights to minerals and land in the public interest when times are good and production exceeds the pubic need.
The primary cause of economic upheaval is always speculation interrupted by reality. In the latest round it was peak oil and the interruption to world wide economic growth that triggered the financial collapse.

So let us be sure to understand this.....
A "social insurance system" that does not pay for itself over the long term will not work. The "conclusion" that social insurance systems cannot continue forever is rightarded pig crap. Such systems, like any other valid systems must be valuable in their own right. That seems to be pretty clear to me and to most other sentient creatures. The rightarded will forever deny that planing and rationality can avert the harm caused by a rightard created "business cycle".
The other piece of the monetary puzzle is, of course, a dependence on trade that leaves the system vulnerable to external politics. An entity that prints its own money for internal trade can do as it pleases. But that same entity cannot expect to send its currency abroad while not reclaiming any of it through reciprocal trade or some sort or tribute. Sooner or latter the external people will have too much of the currency and lose all respect for it. If the currency cannot be used to acquire any real goods or services directly or indirectly from the realm served by the currency creator and the currency creator cannot force taxes or tribute then the game is over.
A sovereignty as a unit can be rich or poor measured as the quality of life of its middle class. When and if trade dose not serve the middle class and make the middle class more prosperous over the long term then trade sucks. National insolvency in the USA can only occur due to _unnecessary_ trade (which is actually some sort of theft).

That seems to be a very popular misconception among the righties. The "last round of contagion" was caused by the unrestrained creation of credit-money outside the bounds of the traditional banking system by a bunch of greedy criminals. The malfeasance of non regulation continued with the "bail out" of these same crooks. Greenspan did not "pump" anything at all. The entire government just looked the other way while the thieves created their own money and then, based on the fear of financial disorder, the government created _REAL_ money and credit and gave it to the crooks. The crooks got richer and the rest of us got poorer. It's called Republican economics.
That decision was made by a Republican administration that AGAIN lied about the sky falling if the administration didn't get what it wanted. That seems to be a recurring theme in Republican administrations. The administration holds all the cards and intelligence data and claims a threat to national security (like a collapse of the entire economy) if it doesn't get what it wants.

--
"Senate rules don't trump the Constitution" -- http://GreaterVoice.org/60

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Michael Coburn wrote

But it only applys to the social safetynet component, FICA.

It isnt insurance either.

Pigs arse they are. Not all the social security recipients spend their SS income immediately and its nothing like goods even when they do.

They dont owe you a damned thing, because you get the same benefits yourself if you last long enough.

Only the fools do.

Even sillier.
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