Which is worse, government “printing” money or government “borrowing” money?
In an Objectivist society, the government under normal circumstances would neither print nor borrow money. My question is: In today’s deficit-ridden economy, is it less destructive for the government to finance that deficit by issuing unbacked currency directly or to continue its existing policy of issuing bonds? Two advantages I can see in favor of money printing are that it would not involve debt (thus no interest payments), and would not require the participation (or even the existence) of a central bank.
Milton Friedman appears to have preferred direct money creation over debt financing.
http://0055d26.netsolhost.com/friedma...
Thoughts?
Milton Friedman appears to have preferred direct money creation over debt financing.
http://0055d26.netsolhost.com/friedma...
Thoughts?
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BayBucks, Time Dollars, and BerkShares are just three on-going examples.
http://www.centerforneweconomics.org/...
.. oh, yes, and DISNEY DOLLARS, good at Disneyland and Disney World.
A government is just another economic actor. Have you never bought a home, a car, or a refrigerator on credit?
It was to finance the Civil War that Salmon P. Chase invented the National Bank system. From 1863 to 1933, to open a National Bank, you had to put at least $25,000 in gold in the US Treasury, for which you got Treasury bonds that paid interest. Against those, you could loan out up to 90% of the value. ... and banks still failed from mismanagement. That fact contradicts the hard money religion of conservatives. Gold is, indeed, a good form of money. But it is not magic.
Most of American capitalism was created "from nothing." While there were rumors of "gold in them thar hills" of North Carolina and Georgia, the real hubs were Boston, New York, and Philadelphia, where there was no gold. Spain looted the Americas of untold tons of gold and silver. It remained poor. The Mexican silver dollar was the preferred coin for trade with China. Merchants bought tons of them. Mexico remained (and remains) poor.
Creation is by definition "from nothing." It is not metaphysically "from nothing" (ex nihilo) but it is substantially so. I enjoyed reading The Man Who Found the Money about John Stewart Kennedy and America's railroads. They were all mostly a series of failures in constant receivership with nothing to offer but stock certificates.
You might be opposed to the stock market. Many conservatives are. Adam Smith was. Ludwig von Mises said that investment must come from savings, not from credit. But they were wrong.
I don't trust either government or bankers to create legal tender from nothing. Both have proven that their interests do not agree with mine.