In this space I will discuss various aspects of how Economic Systems function from the point of view of Particle Physics. In particular I expend a lot of energy attacking the "Taxes Fund Spending" lie that is so very pervasive. Perhaps I should reference my "Last Lecture" presentation entitled "The Inevitable Demise of Capitalism".
This article is a good starting place as long as you are aware of the caveat that we use the term "fiat" rather than the term "high-powered". Finally, for a more complete explanation, start by reading the first twenty pages of The Deficit Myth, Modern Monetary Theory, and the Birth of the Peoples Economy by Stephanie Kelton or some other equally well written description of Reality based economic practices. In Particular, Read The Last Sentence Of The Last Full Paragraph On Page 10.
· · · MMT radically changes our understanding by recognizing that it is the currency issuer—the federal government itself—not the taxpayer, that finances all government expenditures. Taxes are important for other reasons that I will explain in this book. But the idea that taxes pay for what the government spends is pure fantasy.
We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest.
The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, he must justify his right to exist.
So we have inspectors of inspectors & people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school & think about whatever it was they were thinking about before somebody came along & told them they had to earn a living.
As a "warm-up" I include a Scientific American article written by Dr. Bruce M. Boghosian a professor of mathematics at Tufts University, which motivated me to send the following (rather enigmatic) Letter To The Editor:
editors@sciam.COM
Regarding Page 70: The Inescapable Casino by Bruce M. Boghosian
*****
Economics: A Human Construct
In the realm of particle physics each vertex conserves energy and momentum to the point that off shell particles exist only for a time consistent with Heisenberg's Uncertainty Principle. While they impose very real consequences we will never extricate them from their virtual realm.
Economic transactions, however, need not be fair and balanced. In the grand scheme of things government spending (monetary creation) is fundamentally decoupled from government taxing (monetary annihilation). Economic activity unlike particle processes are not subject to physical constraints. During my seventy years of life I have seen how this artificial environment allows for much evil as well as for much virtue.
Dr. Boghosian writes "Given how complicated real economics are, we find it gratifying (that this analysis) describes the actual wealth distributions of multiple nations with unprecedented precision and accuracy." I, for one, am a bit surprised "that a simple analytical approach developed by physicists and mathematicians" revealed so very much about economics.
I would like to "second" Dr. Boghosian's final paragraph: We of the cognoscenti need to pressure our policy makers to create a fair and equitable economic system. Economics cannot be used to justify the subjugation of the many to benefit the few. There is no compelling reason to allow the unfettered concentration of wealth to the detriment of life, liberty, and the pursuit of happiness.
Dr. Robert I. Price, retired University of Nebraska, Kearney
AKA: Rip
To forgive student debt or to not forgive student debt? That is the question! And, what about the health and welfare of those underpaid and destitute?
Why is it so hard for Americans to understand this basic fact?