[OT] Ameros will clog the tubes - was Re: Network Neutrality

Von Fugal von at fugal.net
Fri Dec 5 12:39:14 MST 2008

<quote name="Nicholas Leippe" date="Fri,  5 Dec 2008 at 11:48 -0700">
> On Friday 05 December 2008 11:25:00 am Von Fugal wrote:
> > Obama is still going to "buy a yacht." He's just going to do so on a
> > smaller budget. You're solving the amount of inflation, but not the
> > distribution problem.
> >
> > > > The printers benefit (the government gets more power, more pet
> > > > projects, hidden taxation). The first receivers benefit. This is
> > > > demonstrable in several ways. First, they get to sell more of their
> > > > product than they would normally. They get more business. More business
> > > > for any business is good business and most certainly a benefit.
> > > > Secondly, and highly related, they experience an increased demand for
> > > > their product. Supply/demand dictates that with an increased demand
> > > > comes an increased cost. They not only get to sell more of their
> > > > product, they get to do so at a higher charge. Lastly, they get to use
> > > > all this extra money they got from doing extra business at extra charge
> > > > to increase demand at the next level of the chain.
> > >
> > > Okay, so yes, there may be an additional increase in demand from putting
> > > the new currency into curculation. This would raise prices--meaning more
> > > profit for those producers. But, it doesn't have to be done this
> > > way...read on.
> > >
> > > > If you somehow manage to keep the money
> > > > supply/capita ratio constant, then yes, overall prices don't go up. But
> > > > prices DO go up on that first step, then of necessity prices drop
> > > > elsewhere. Where? Most likely in wages and compensation, small
> > > > businesses, etc.
> > >
> > > Here's a kicker for you. If the government budget is required to stay the
> > > same, regardless of printing new currency, then taxes collected must
> > > decrease by as much as the new currency--thus the government buying power
> > > stays the same, while the population's buying power increases. There's no
> > > increase in demand directed at the suppliers of the goods and services to
> > > the government. At worst there would be an increase in demand for
> > > whatever the entire population buys--everything!. Oh, but wait...the
> > > capita increased--so the per/capita buying power did not increase after
> > > all... which is exactly what we wanted. Solution? Perhaps.
> >
> > How do you propose to keep the government budget the same? How do you
> > propose to decide ahead of time what the government budget will be for
> > today and forever afterward?
> I didn't mean same as in never changing, I meant same w/respect to new 
> currency. So if they are collecting a 10% income tax, and issuing 3% new 
> currency, then the tax gets reduced to 7% (or whatever it works out to so that 
> their actual budget amount collected from what would have been a 10% tax is 
> the same). I didn't mean they couldn't change the tax rate and thus their 
> budget.
> I also don't mean that the gov't could do defecit spending by issuing new 
> currency. That would not be allowed, period. That is not a power they would be 
> granted.
> > I can see what your saying, and it sounds good in theory. How would it
> > be? To always have the same paycheck, it's always enough (and in fact
> > buys me more and more as the economy grows) and always the same taxes
> > that never increase? That's a splendid ideal. I fear it places far too
> > much trust in the government.
> Wouldn't it be wonderful if we could trust the elected representatives? Who 
> else in history ever expressed that ideal--understood that it was impossible, 
> and thus implemented checks and balances...?
> Since, as you remind us, power corrupts (has done so and is doing so), the 
> only solution is to remove that power.
So you agree then we shouldn't have inflation? :) I don't have a
particular problem with inflation itself. I feel that inflation is
inevitable in many respects. Well distributed, limited inflation is
acceptable and manageable. Not good, but it's there and tha's ok. What I
have a problem with is giving exclusive license to anyone to inflate at
their own behest, and beyond that, the disproportionate distribution of
wealth that is a result of inflation springing from a single source. I
especially don't like the government having the power to inflate. Like
you say, our country wasn't built on trust of government, it was built
on distrust of governmnet. I have no obligation to trust my government
with the power of inflation.

> > Also the fact remains, that even though the government has a constant
> > budget, it still aqcuires that budget dispraportionately to the market.
> > It's suppliers are constantly better off, and their suppliers, while the
> > low end businesses are constantly at a disadvantage.
> How is this so? (And like I clarified, I didn't mean the budget could not 
> change.) If the budget is a percentage derived from the exchange of goods 
> and/or services (income tax and/or sales tax), how would that ever be 
> disproportionate to the market--I'd say that would make it always exactly 
> proportionate to the market.
Good question. Let's see if I can do it justice. The increase in the
money supply is directly proportional to the nations increased wealth
(more people, more producers) for which you allocate more money. Thus,
government, being the sole printer of the new money, has a direct tap
right into the nations increasing wealth. The government then quite
literally skims the cream right off the top before anyone else gets to
benefit from the increased wealth (their own labor). Then the
governments suppliers get this cream first, and on down the chain. Well
then wouldn't taxes be the same? Isn't it the same thing if the
government skims that cream via taxes and then distributes it, unevenly,
back into the economy? That very well may be. That I'm not clear on yet,
I'd have to study that out some more. If taxation is the exact same
thing, then, why not just tax? Why inflate instead? I know why the
government wants to, it's because people never see that tax and remain
docile even in the face of severe taxation through inflation. Maybe we
could successfully limit how much the government could ever tax through
inflation, but why give them the privilege? Wouldn't you prefer that we
can see, directly, what our government is costing us?

> > So monetary inflation is one of the causes of all other inflation. The
> > only other cause is decreased production.
> If you have a precious metal (or other commodity) as currency, then you can 
> have a decline in the real value of that currency because it is tied to the 
> production of certain supplies as a resource. (eg, gold is used in producing 
> electronics and jewelry--if jewelry goes out of fashion, or electronics finds 
> a better material than gold, it's utility value declines, demand for it 
> declines, and it's value thus declines.)
I retract my statement that production is the only other cause of
inflation. Yours is a valid cause, though probably rare. (Yet so is
decreased production, hopefully).

Von Fugal
Government is a disease that masquerades as its own cure
-- Robert Lefevre
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