“ The government creates money when it spends and destroys that money when it taxes or borrows.”
When it spends that money into existence it would seem there is some presumption of it being an obligation, or debt, or why would anyone willingly accept it?
What is wrong with it being viewed as a contract, with one side an asset and the other a debt? I don’t see any problem with debt, if it falls within some functional parameters of the one making the obligation to sustain. Some moderation and judgement needs to apply. Even the United States, as issuer of the global currency ought accept there are eventual limits to its responsibilities, or they are eventually squandered.
“ The concept of unlimited money available to the government even if it doesn’t collect or borrow a dime is just too far fetched for anyone to believe if it doesn’t gain some traction among politicians.’
At some point it really does become just so much confetti. Even for the United States. Do we really want to hit the end of that chain, at a dead run?
“People see them as zero-sum since any benefit realized comes at some price to those who may, or may not, be benefited. It is also much easier to garner support for safety nets that benefit the poor and automatically stabilize the economy if the middle-class worker doesn’t feel they are “paying for” them, raising questions about “deserving”’
If people understood that money functions as a public utility, much like that other medium of roads, they would understand that neither rich or poor effectively own them and the rich would not be able to appeal to the belief of money as private property, to use as leverage against the rest of society. You can have the most expensive car on the road, but you still get the same space as everyone else, unless you do have some larger need for it, like trucks on roads, or companies running their businesses need more cash flow than individuals. Then people can trade their talents in a market that is not at the mercy of those abusing the medium that makes it possible. Government used to be private, but there was a limit on how much nonsense kings could get away with.
We can store wealth as stable assets. Gold, land, houses, businesses, etc. are fairly stable assets. They are not abstractions in a runaway financial sector(think derivatives), where much of the value is in the assumption of the greater fool, or a central bank that can be counted on to further loosen the money supply whenever the stock market drops more than ten points. Creating a feedback loop, where everyone buys into the market, no matter how high, because they know the normal risk is insured against, leaving only a total collapse of the system, when the rates can’t go any lower.
When interest rates are 3% and the market is going up 6%, what is to stop it from going to infinity, on borrowed money?
Yet presumably that would be good, as your solution is the government can issue as much money as it feels like.
Even tools can be destructive, if they are misused.
My argument remains that money is an accounting system, but one which needs careful attention and regulation.
Think vouchers, instead of money. People will get it that this is a form of receipt for services they gave the community and can be traded for other’s services, not as an object of value in itself. Yet if those vouchers are just thrown out like confetti, the system breaks down.
