Prof Steve Keen makes a lot of sense..
http://www.youtube.com/watch?v=75kFhBAI8Bo&feature=feedu

http://www.youtube.com/user/RTAmerica#p/u/45/368rjAANQRQ
Not a one time jubilee. It has to be a constant jubilee. All debts forgiven instantly as they are created. If debts could not be legally enforced, but only existed on the honor system, then they would be smaller.

http://krugman.blogs.nytimes.com/2011/10/10/if-banks-are-outlawed-only-outlaws-will-have-banks/

It's not news to me that there's nothing preventing FRB from going offshore if it were gone. It may not be practical to even do. But I think I can argue that if it could be done, it would not be harmful.

Krugman writes:

Like a lot of people, my insights draw heavily on Diamond-Dybvig (pdf), one of those papers that just opens your mind to a wider reality. What DD argue is that there is a tension between the needs of individual savers â" who want ready access to their funds in case a sudden need arises â" and the requirements of productive investment, which requires sustained commitment of resources.

Banks can largely resolve this tension, by offering deposits that can be withdrawn on demand, yet investing most of the funds thus raised in long-term, illiquid projects.

To this I say that money is just paper. If savers largely keep their money in shoeboxes under their beds then it is effectively irrelevant to the economy until it is spent. This helps to raise the value of the money that IS available for long term investment creating better incentives to invest long term for those with the vision and the means to do so.

According to Krugman, banks are those entities that borrow short and lend long. This creates adverse selection of ideas because those who prefer to take a loan rather than invest capital they already have are those who believe the interest will not be able to be repaid, but have some hope that their expectations may be exceeded. If you had a dollar it's better to use that dollar on an idea you believe to be good rather than borrow a dollar since you get to earn the interest yourself.

This is analogous to the adverse selection that takes place in the insurance industry. People buy insurance when they think they will need it.

Is it better to try things that you think will fail in the hope that they may succeed and have your expectations exceeded ( by relying on the Fed to increase the money supply so that you can pay the interest ) or is it better to try things that you think will probably succeed in the first place?

Productivity of bad ideas that can't work isn't real productivity.

If there is a lack of money available for long term investing then by all means create more money, but there's no reason banks must create it with a shell game involving other money only available short term. If the short term money is only available for the short term then let it sit harmless in a shoebox.

I'm watching this now. Not quite finished watching, but it's good.
http://youtu.be/JXt1cayx0hs

For example, I live in a US state where billboards are outlawed in favor of small license plate sized signs. Remotely from a place of business it is the only kind of sign allowed. In my state, we are free from the eyesores billboards blocking up the scenery while still being able to find the nearest McDonald's by looking at the far less intrusive signs that are allowed.

Why is advertising so noisy? Because it must be obnoxiously noisy not to be DROWNED OUT BY ALL THE OTHER ADVERTISING.

By limiting volume, we preserve the peace, and also preserve the spirit of the first amendment by preventing those with the means from drowning out everyone else's voice like a GNAA troll with too much time on their hands.

The government already limits the power of radio transmitters including Citizen's Band radios, and regular FM radio stations. The power of money to transmit ideas also needs to be limited. This means political ideas as well as other ideas. Each must be able to voice their opinion, but it should not be possible to drown out everyone's voice because you can afford the largest loudspeaker.

I think it is probably possible for there to be laws limiting the volume of speech so that everyone can have their say heard without limiting it's content.

What do other people think?

People live in the cracks, meaning that chaos creates niches in which humanity can exist. Imagine if the world were perfectly efficient - you couldn't waste a second. Every waking moment would be accounted for, and you would consume no more than absolutely necessary to maintain your metabolism. You would be a human being encased in a metal life. Imagine how many more people the world could hold if we could only somehow get to absolute efficiency. 7 billion is nothing. Soylent Green is only the beginning.

500 million has been suggested as a good world population that would permit humans to live with some kind of dignity. I agree with this. 13/14 of us should just die ( just as long as me and mine are spared ). To leave a bit of room for growth, maybe half of the remainder should go too leaving 250 million or so survivors.

Yeah, I'm a genocidal maniac at heart. I'm not racist or anything, I don't care who lives and who dies as long as it's not me and mine doing the dying, but humans are pests - especially to other humans. I'm also too lazy to do anything about it, and I have doubts as to whether the living or the dead would be better off. Consider that those remaining living and their no doubt plentiful decendents would be cursed to live on. Some say: Life is suffering. And I don't believe in Nirvana.

At least the sun will go red-giant someday and cook all the unfortunate little earthlings into vapor.

But since I'm here, I'd rather live in style than not. Some, like the Libertarians, believe individual property is sacred, and some like the Communists, believe property is theft from everyone else who would use the property. ( note the capital L in Libertarians and the capital C in Communists, I'm talking about dogmatists here, not ordinary people )

I believe that property is theft, AND that there is *absolutely nothing wrong with theft*. If you can keep the property you claim ownership of then it is de-facto yours to enjoy. Those you stole it from ( everyone else ) should realise that you have wronged them, and you, the claimant to property should defend it from everyone else if you wish to keep it. This is how every other animal operates, and it is how honest humans operate too. The taboo against theft is a con as is the concept of ownership itself.

Might ALWAYS makes right. If you disagree your opinion is by definition wrong.
If you want to fight about it, then you're soon dead, and so your opinion is irrelevant. The living exist by force.

Read through the famous 'Ten Commandments'. There isn't one I agree with per se.

That being said, such cons are useful to manipulate others with. Moral absolutists crashing against each other create lots of cracks and debris in which to live. Moral absolutes are like a piece of rubbish plywood from which one can build as safe little shanty in which to live, or not, leaving it for the next denizen of the social slums to build with.

Philosophical rubbish isn't the only kind of trash in our environment. Your relationship with whatever institutions you depend on are merely unavoidable. You stick your holdfast into a crack and filter the water for food. If there were ever an institution that had no cracks, it would be a sentient machine with no need for humans at all.

If you are more than a 'wage slave' ( I don't like that term, but it's concise ) then your human dignity is due to your being a successful parasite upon the rest of society. Even 'wage slaves' steal their meager nutrients from everyone else by wedging their little holdfasts into a spot that for some reason can't yet be automated. Why can't we just obviate the need for these pesky humans???

Left, right, meh.. I think the left has shut it's collective mouth in recent decades because it realised that the things it traditionally advocated shrunk the overall economic pie, and everyone else realised it too. Some benefitted ( like those in unions that did not lose their jobs, or in some countries, eg, communist party bosses ), most did not.

Recently, in the absence of much of a left in a more rightward leaning environment, of course some still benefit while most do not.

The thing is capitalism exists even if it is outlawed, even if there is no money, even where it is anathema. Social capital, physical capital, political capital, favors etc are always traded. They are impossible to outlaw effectively. There's no point in trying. People are going to steal from each other and accumulate capital in whatever form people are using.

It's a truism, if someone is accumulating more than you, then they are stealing from you. You can try to accumulate more yourself by stealing from others, and this is the route most of us ( including me ) prefer, but that doesn't change the fact that relative success IS to be despised.

But then, ANY success is to be despised. It's generally wiser to steal from the weak, as they can't fight back. Do I steal a dollar from you, risking retribution, or kill a raccoon and steal it's pelt to sell for a dollar? The choice is a no-brainer.

There are too many humans anyway. Why not aid those stronger than you in plundering from the weaker? It's probably safer and pays better than other options right?

I have no problems with this per se.. It puts me on the winning side probably since I live in the first world. However it creates a monster in my own backyard that will some day come to eat me too.

Chaos needs to happen but it's not my job to cause it. I'd rather not be near any of it. I'd rather sit back and watch other people kill each other and mind my own business.

There's a monster growing in the US that needs to be put down so we can get back to being our blessedly lucky old isolationist selves.

There needs to be a constitutional ammendment to get the money out of politics.

I just heard about this Occupy Wall Street etc stuff two or three days ago. According to Wikipedia it's been going on since Sept 17th.... Lately I've been posting some journal entries in that vein. My earliest slashdot post along these lines was Sept 16th. However I'd been reading/viewing that sort of thing quite a bit for some days before that. Have these sort of ideas hit a critical mass on YouTube in September or something? It's just spooky.

In a previous journal entry, I said:

A former Hillary Clinton supporter, and current Barack Obama supporter, I like McCain more than I like most Republicans. Part of me might almost be tempted to vote for him except... Well I like Barack's Health Care Plan better..

I guess I had hope that it might eventually morph into something more along the lines of Hillary's plan. I've had a bit of a sea change in my view of how the world works. I still would have voted for Barack Obama because of fear of Sarah Palin being VP though.

I have to look in the mirror and see that I am as easily manipulated as the Christian Right because I am pretty much their opposite on social issues. I will vote against their agenda because they terrify me. This effectively nullifies me wrt opposing any other issue the democrats may be being paid to support ( cf, Obamacare ). As long as the Christian Right votes Right, I will vote Left.

What to do?

A must read: http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405

http://www.youtube.com/watch?v=EzPgIudSA00&feature=related

From Chomsky's article I extracted the name Thomas Ferguson, which led to this: http://en.wikipedia.org/wiki/Investment_theory_of_party_competition

More on the owners of america:

http://www.chomsky.info/articles/20100124.htm

Chris Hedges & George Carlin ( listen to George talk about 'The owners of America' then Chris Hedges. Chris Hedges also has some interesting things to say about Christian Reconstructionists and Dominionists etc )
Michael Scheuer ( I haven't heard him say anything I disagree with yet ) Ex CIA talks about Arab Spring. Why the hell are we in Lybia, are we STOOPID???

So, I hear this song on the radio, that sounds like some nutso making up his own Book of Revelations, and it sounds familiar - it's something about a 'Hard Rain's a Gonna Fall' or something. The voice, it reminds me of, oh yeah, it's that guy who sings 'Rocky Mountain High', ok, so I look up 'Bob Denver' on the net, and up pops: GILLIGAN!

There has been some debate about whether this was going to be a stagflationary recession or whether the US was going to follow the Japanese script.

The US just lost it's AAA credit rating. The result? Today google news shows stocks falling and Treasury Yeilds DROPPING.

The facts don't lie: We're Japan.

What's going on? Here's my basic economic worldview, and my take on things in a nutshell:

Spending money shifts PRESENT resources. You can't eat future porkbellies now. You can only eat pigs in existence at the present time. It doesn't matter how much money you borrow, the money can only obtain presently existing goods. You can spend money for a promise of bricks in the future, but you can not build a brick building in the here and now out of paper promises to deliver bricks in the future.

Money is government debt. The government will accept currency in payment of taxes. You need not deliver chickens, or lumber, or bushels of wheat when you pay your taxes, the government accepts cash. When you pay cash to the government, then you cancel a debt the government owes you.

The government then is free to shred these obligations, or reissue them by spending the notes again.

When the government spends money, it shifts present resources from private ends to public ends.

When the economy is booming, then there is already plenty of demand for resources like materials and labor, but in bust times, the prices of these things fall.

When the government shifts resources to public ends, the public ends are generally worthwhile when they grow the taxable base of the economy in a sustainable ( haha ) way, more than the private ends they would otherwise have been put to.

( Here I have to say that from my point of view almost nothing could be more worthwhile than for Uncle Sam to write me a nice check for 1 BILLION Dollars. Moo ha haa. Worthwhile is a relative concept of course. You would of course disagree. With a Billion dollars, I could buy some island and be coconut-king of it and the US could go to hell if they insisted. But without a billion dollars, I do care about what happens in the US since I live there. )

Big government spending during boom times creates inflation because there is already high demand, at the time the government is shifting resources away from private ends by spending. The competition for goods raises prices.

Big government spending during bust times utilizes idle goods when demand is slack keeping prices from falling in a deflationary spiral.

But how the government comes by the notes it spends becomes important.

Printing money has the effect of a tax on money holders. Conventional taxation gives the government finer control over how resources are shifted. Obtaining notes to spend by issuing public debt gives investors the choice to lend their money to the government rather than to a private enterprise.

When there are safe and attractive private investments, then the yields rise, but in bust times, and for the shortest term debt, yields are close to zero because there is insufficent competition for money. Nobody wants to spend.

But why should the government perpetually roll over short term debt at near zero percent when it could just issue a 0% fixed interest note such as the Federal Reserve Note?

If the government runs a deficit during bust times, then it will be spending more notes than it takes in with taxation. During boom times it would collect more revenue than it spent, possibly helping to cool things down.

Deflation can not take hold if the government commits to always spending sufficient notes to prevent it. Of course people may decide that because the economy is in the dumps, they will wait for the government dole of newly printed notes rather than embark on new enterprise. It's interesting how a crisis due to Fractional Reserve Banking could lead to a pathological concentration of government power.

But this is not likely anytime soon in the US.

LONG before the US was forced to fund any excessive and unproductive welfare dole scheme to spend sufficiently to effectively prevent deflation, there would LOTS of changes.

Repaying the national debt with newly created money would force those who now earn a small but positive interest rate to accept 0% to hold cash. Some would not find this acceptable. US creditors would do one of four things:

1 - Continue to be US Creditors by holding onto their cash and earn 0%.

2 - Invest the money in the US private sector.

3 - Buy US made goods.

4 - Invest the money in foreign private enterprise or foreign government debt.

1 - The US should commit to enough spending to make earning 0% unattractive.

2,3 - Investing in the private sector or buying US made goods will boost the economy. Great!

4 - Investing abroad will weaken the US dollar. This will make exporting easier, and will have the effect of lowering US consumers' buying power with respect to imports. THIS NEEDS TO HAPPEN - BADLY. In fact countries that hold large quantities of US Debt, do so to devalue their own currencies in the moral equivalent of a trade war. This is both a tarriff on imports from the US and a subsidy of exports to the US. The value of the tarriff accues to the government in question in the form of treasuries, while wages in that country are depressed. The skimmed value is ultimately paid for by the workers in the country ( China and Japan are examples ) in the form of wages paid in devalued currency.

China must artificially control foreign investment to maintain a devalued currency. Japan's relatively low yeilds have repelled foreign investment in Japan thusfar.

Though natural resources ( especially fossil fuels ) are destined to become more scarce in the near future, I believe there is easily sufficient room stimulate the economy by replacing interest bearing debt with newly created money to address very near term issues.

Imagine the effect on the US economy of suspending taxation temporarily but continuing to spend as before? If foreign powers insisted on continuing to devalue their currencies by holding excessive US cash, this is the magnitude of expense they might theoretically incur.

It would obviously not actually be necessary to follow through on such a drastic threat as foreign powers are pretty much rational actors.