Sunday, 31 August 2014

Enough with the balanced budget crap

An arbitrary budget deficit cap or a debt-to-GDP cap doesn't make sense, regardless if you're living in a democracy or a dictatorship.

There's no such thing as a free lunch; and people in Europe haven't been getting it. Welfare payments don't produce goods out of thin air. At the end of the day, that welfare money goes to producers and service providers. And the permanent and involuntary unemployment are in such a position because of government fiscal policy - not because they're lazy or want to live in poverty all their lives.

The slogan of the right is always the same. Subsidies for the big corporations. Yes, we want. Tax cuts/deductions for the big corps? Yes, we want. Child care or health insurance for the poor and middle class? NO! We don't want. That's unproductive and inflationary, don't ya know. So yeah, I'm really tired with all these double-standards.

Even in your minimalistic state, the government would still need to run a fiscal deficit in order to allow for private economic activity. For any given size government, there's always a respective fiscal deficit level required to achieve and maintain full employment and price stability. When there are more unemployed than the government sector wishes to hire, the government can either lower the tax or spend more money into the economy - a simple and just way would be for it to directly spend it into people's pockets. A basic income doesn't go against the "fairness" ideea of the reasonable libertarian. Hell, governments are net payers of interest to bankers anyway. Why not scrap this state of affairs, and make government a net payer of money to households?

I'm not really familiar with how EIB works and who stands behind it. Probably rich member states limit poorer states access to this funds with 50-50 financing scheme and deficit limit. After all EIB is not charity, is it?"

The EIB's framework is utter nonsense. Its design simply favors the commercial surplus EZ countries to get access to funding; it doesn't allow access, based on the scheme's constraints, to the commercial deficit countries - the so-called periphery. One more undemocratic feature of the Union, meant to give leverage over the deficit countries. For France and Germany namely to do as they wish.

You'll notice that in the USA, the Federal government and the other states are not making a case for the deficit states to balance their trade and budgets OR ELSE! Nobody is threatening Texas to leave the union because they run net commercial and budget deficits.

In the EZ, the framework is totally idiotic as well as malitious.
As for the accounting (S-I)+(G-T)+(X-M)=0 It means this: (G-T)=(S-I)+(X-M)
Thus the root source of all the money that goes to paying government taxes, that goes to buying government bonds, and that remains in the pockets of the private nongovernment sector as net financial savings - all of that money comes from government spending.

Though it's true that the vast majority of the world's money is created endogenously by private banks - and only a minority of that is base money (net assets created by government fiscal deficits); all that private bank money created, all those assets created horizontally have a corresponding liability. All horizontal transactions balance out to 0. A reason for why private debt levels are so high, is because government fiscal deficits are too low to satisfy the desire of the private sectors to net save. This goes for the USA, for Europe, and many other parts of the world.

Monday, 25 August 2014

A few lines from a couple of my Of Hate And Laughter characters

Kalafar of house Sodomis, lord of Weiyenor and warden of the Northlands.

Coat of arms: a ram with fiery hooves

Realm: Winterlands

“Don’t make me make you rue the day you’ve squeezed me into this world from between your legs, mother.” ~from book 1, An Empire Of Traitors

Drakanes, a sister of the High Temple of the Matriarchy

Coat of arms: none/lowborn

Realm: Westlands

"Sword! Sword! My cunt for a sword!" ~from book 1, An Empire Of Traitors

Birus of house Mandon, lord of Rivermark and warden of the Streamlands

Coat of arms: a hawk's majestic head upon a field of white

Realm: Midlands

“Brothers! Soldiers! This day we rid our lands of these invaders! We’ll cut them down and spit on their corpses! To battle! For Rivermark! For the Streamlands! For Hagyai!” ~from book 1, An Empire Of Traitors

Amarius Soronius of house Mero, Sunborn emperor of the Old World (the five realms)

Coat of arms: the Sunfist encircled by a golden beam with its rays sinister

Realm: Southlands

“Worry not, brother. For I share the same slippery robes of your circumstances, even more so. My allies are like dogs; sniffing about my throat, waiting for the right moment to tear it open and feast.” ~from book 2, A Heretical Divide

Tobias of house Findley, lord of Stoneweed

Coat of arms: the dog-headed serpent red against a field of jade

Realm: Eastlands

“You are to be my mistress. I wish it so. If you betray me, I’ll have your head on a spike. But first, I’ll cut open your belly and feed you your insides.” ~from book 2, A Heretical Divide

Neezor Arrtrofis, captain of the Prodigious

Coat of arms: a demon’s head with its tongue hanging out above two crossed scimitars

“Great dweller of the underworld! I am the holder! I am the keeper and master of his heart by blood pact! I am Neezor of house Arrtrofis, first of my name! I am your master, and you are bound to my will until the promised hour! Until the Great Annihilator conquers the entirety of hell, and his servants prepare the earth for his glorious and terrible coming!” ~from book 1, An Empire Of Traitors

Read the first and second OHAL books (Of Hate And Laughter) at Scribd.
An Empire Of Traitors
A Heretical Divide

Sunday, 24 August 2014

Brits, stand up and save your NHS!

In the past two years, £11bn worth of the NHS has been put up for sale, while 35,000 staff have been axed, including 5,600 nurses. Half of the 600 ambulance stations are earmarked for closure. One-third of NHS walk-in centres have been closed and 10% of A&E units have been shut. Waiting lists for operations are at their longest in years as hospitals are consumed by the crisis in A&E.
The morale of the NHS family is at rock bottom. Their pay has been frozen for two years under the coalition, and they have been forced to accept a major downgrading of their pension benefits. Freezing and squeezing pay is heaping financial misery on more than one million NHS workers.
The NHS will just be a logo; reduced from being the main provider of health services in England with one of the biggest workforces in the world, to a US-style insurance scheme, divorced from the delivery of care. Fewer treatments will be available to people as cuts start to bite, with wealthier people able to "top up" treatments. It's not just a postcode lottery – it's also a tax code lottery.
Patients are being denied prompt hip or cataract operations – and the list of hard-to-get services will grow and grow, reducing the NHS to a skeleton. Money that could be spent on patient care is being spent on unnecessary bureaucracy, debt interest and dividends. Meanwhile, Hunt blames individual cash-strapped trusts for making "bad choices".

Private profits are made on the back of the health of people, by narrowing access and increasing prices. Private economic rent is (in most cases in certain countries) more of a burden than actual government taxes. What they're trying to do now with the NHS is to increase private economic extraction on the backs of the citizens. This has nothing to do with "saving the country from debt burdens" or "future generations." It's not about "saving" money on this particular (health care) sector, so that the government may increasing funding or decrease taxes somewhere else. Any fiscal policy that lets so-called market forces impose the price on services that should be every citizen's right - are nothing more than undemocratic efforts to control the poor and the middle class; to lower their living standards and allowing the interests of the opulent minority to dictate the rules of the "game" - to have leverage over everybody else.

A lower fiscal deficit in these times ISN'T serving the citizens of Britain, or the citizens of every other country for that matter. Cause nobody's working and full employment.

British people, do not let your national health care system be robbed by private business; because you and your children will regret it. I assure you! Take it from a guy who lives in a country in which many privatizations happened after the communist regime fell. And all of those public-owned assets which were privatized, were actually sold for scrap for a quick buck. And the ownership went to shady actors who had ties with the inteligentia and with politics. All in all, the profits were privatized and the losses socialized.

Don't let that happen to you.

Friday, 22 August 2014

Rothbard's solution to the 1992 LA riots


Making Economic Sense
by Murray Rothbard 

Chapter 17
Rioting For Rage, Fun, And Profit

The little word "but" is the great weasel word of our time, enabling one to subscribe to standard pieties while getting one's real contrary message across. "Of course, I deplore communism, but . . ."; "Of course, I approve of the free market, but . . ." have been all too familiar refrains in recent decades. The standard reaction of our pundits, and across the entire respectable political spectrum, to the great Los Angeles et al. riots of April 29-May 2 went: "Of course, I can't condone violence, but . . . ." In every instance, the first clause is slid over rapidly and ritualistically, to get to the real diametrically opposed message after the "but" is disposed of.
The point, of course, is precisely to condone violence, by rushing to get to the alleged "real structural causes" of riots and the violence. While the "causes" of any human action are imprecise and complex, none of that is attended to, for everyone knows what the "solution" is supposed to be: to tax the American people, including the victims of the massive looting, burning, beating, killing rampage, to "assuage the rage of the inner cities" by paying off the rampaging "community" so handsomely that they supposedly won't do it again.
Before we rush past the riots themselves, the whole point of government, of an institution with a monopoly, or preponderance, of violence, is to use it to defend persons and property against violent assault. That role is not as obvious as it may seem, since the Los Angeles, state, and federal forces most conspicuously did not perform that function. Sending in police and troops late and depriving them of bullets, cannot do the job.
There is only one way to fulfill the vital police function, the only way that works: the public announcement--backed by willingness to enforce it--made by the late Mayor Richard Daley in the Chicago riots of the 1960s--ordering the police to shoot to kill any looters, rioters, arsonists, or muggers they might find. That very announcement was enough to induce the rioters to pocket their "rage" and go back to their peaceful pursuits.
Who knows the hearts of men? Who knows all the causes, the motivations, of action? But one thing is clear: regardless of the murky "causes," would-be looters and muggers would get such a message loud and clear.
But the federal government, and most state and local governments, decided to deal with the great riots of Watts and other inner cities of the 1960s in a very different way: the now accepted practice of a massive buyout, a vast system of bribes in the form of welfare, set-asides, affirmative action, etc. The amount spent on such purposes by federal, state, and local governments since the Great Society of the 1960s totals the staggering sum of $7 trillion.
And what is the result? The plight of the inner cities is clearly worse than ever: more welfare, more crime, more dysfunction, more fatherless families, fewer kids being "educated" in any sense, more despair and degradation. And now, bigger riots than ever before. It should be clear, in the starkest terms, that throwing taxpayer money and privileges at the inner cities is starkly coun terproductive. And yet: this is the only "solution" that liberals can ever come up with, and without any argument--as if this "solution" were self-evident. How long is this nonsense supposed to go on? If that is the absurd liberal solution, conservatives are not much better. Even liberals are praising--always a bad sign--Jack Kemp for being a "good" conservative who cares, and who is coming up with innovative solutions trumpeted by Kemp himself and his neoconservative fuglemen. These are supposed to be "non-welfare" solutions, but welfare is precisely what they are: "public housing "owned" by tenants, but only under massive subsidy and strict regulation--with no diminution of the public housing stock; "enterprise zones" which are not free enterprise zones at all, but simply zones for more welfare subsidy and privileges to the inner city.
Various left-libertarians focus on removal of minimum wage laws and licensing requirements as the cure for the disaster of the inner cities. Well, repeal of minimum wages would certainly be helpful, but they are largely irrelevant to the riots: after all, minimum wage laws exist all across the country, in areas just as poor as the inner cities--such as Appalachia. How come there are no riots in Appalachia? The abolition of licensing laws would also be welcome, but just as irrelevant.
Some claim the underlying cause is racial discrimination. And yet, the problem seems worse, rather than better, after three decades of aggressive civil rights measures. Moreover, the Koreans are undoubtedly at least equal victims of racial discrimination--and they also have the problem of English being their second, and often a distant second, language. So how is that Korean-Americans never riot, indeed that they were the major single group of victims of the Los Angeles riot?
The Moynihan thesis of the cause of the problem is closer to the mark: the famous insight of three decades ago that the black family was increasingly fatherless, and that therefore such values as respect for person and property were in danger of disappearing. Three decades later, the black family is in far worse shape, and the white family isn't doing too well, either. But even if the Moynihan thesis is part of the problem, what can be done about it? Families cannot be forced together.
A greater part of the cause of the rot is the moral and esthetic nihilism created by many decades of cultural liberalism. But what can be done about it? Surely, at best it would take many decades to take back the culture from liberalism and to instill sound doctrine, if it can be done at all. The rot cannot be stopped, or even slowed down, by such excruciatingly slow and problematic measures.
Before we can set about curing a disease we must have some idea of what that disease is. Are we really sure that "rage" is the operative problem? For the most part, the young rioters caught on television mostly did not look angry at all. One memorable exchange took place as the TV camera caught a happy, grinning young lad hauling off a TV set from a looted store and putting it in his car. Asked the dimwit reporter: "Why are you taking that TV set?" The memorable answer: "Because it's free!" It is no accident, too, that the arsonists took care to loot thoroughly the 10,000 stores before they burned them to the ground.
The crucial point is that whether the motivation or the goal is rage, kicks, or loot, the rioters, with a devotion to present gratification as against future concerns, engaged in the joys of beating, robbing, and burning, and of massive theft, because they saw they could get away with it. Devotion to the sanctity of person and property is not part of their value-system.
That's why, in the short term, all we can do is shoot the looters and incarcerate the rioters.

Noam Chomsky on Fox News radio

Here's the link to the interview. Got to say, the interviewer and the guest were great. They asked sound questions and didn't try to resort to sophistry or ad hominems. Quite the stark surprise from an organization like Fox News; but it's good to see that it's not just filled with liars and manipulators.

Tuesday, 19 August 2014

Money is destroyed when loans are repaid

Money is destroyed when loans are repaid:

From the Bank of England’s 2014 Q1 Quarterly Bulletin:
“Just as taking out a new loan creates money, the repayment of bank loans destroys money. For example, suppose a consumer has spent money in the supermarket throughout the month by using a credit card. Each purchase made using the credit card will have increased the outstanding loans on the consumer’s balance sheet and the deposits on the supermarket’s balance sheet. … If the consumer were then to pay their credit card bill in full at the end of the month, its bank would reduce the amount of deposits in the consumer’s account by the value of the credit card bill, thus destroying all of the newly created money.
“Banks making loans and consumers repaying them are the most significant ways in which bank deposits are created and destroyed in the modern economy.” (McLeay, Thomas, & Radia, Money creation in the modern economy, page 3)

My ebooks are live!

The first 2 books in the series Of Hate And Laughter and my black-humored short story, Talking Crows (perma-free).

1-An Empire Of Traitors
Plot: Within the five realms of the Empire things are stirring. Driven by ambition and wounded pride, many nobles seek to change their fortunes, even with the price of treachery. A feeble monarch sits the Sun Throne; and from exile, from the heathen nations of the Lowlands, another Sunborn scion of house Mero gathers strength behind his claim. No family, great or small, shall remain indifferent to fate's whim. It takes an emperor to rule an empire, but it takes numbers and honored oaths to keep both crown and throne. Flesh will bleed. Bones will break. Swords will turn. And the principalities of ruin shall feast and drink; the ethereal powers are laughing with stygian mirth, for the skin between worlds is getting thinner - and by war and treachery, the race of man shall sacrifice to feed gods.
At Barnes and Noble
At Gumroad
At Google Play
At Google Books
At the Smashwords store
Kindle Store
At the iBook Store
At Scribd!
At 'txtr
At Oyster
At Kobo Books

2-A Heretical Divide
Plot: A Heretical Divide picks up right where An Empire Of Traitors left off. The Inquisition proves itself a hydra of murderers and schemers. The ram's war in the Winterlands gets mired in betrayal, and the hawk's vengeance comes to the devil's home under sorcery and ploy. Even with a new emperor, the Sun Throne's vassals are still brewing; each house following its own petty interests. Death's breath looms upon the weak and strong, upon country and sovereign. The princes of ruin have many servants upon the earth - many souls to claim by storm and blood.
At Barnes and Noble
At Gumroad
At Google Play
At Google Books
At the Smashwords store
Kindle Store
At the iBook Store
At Scribd!
At 'txtr
At Oyster
At Kobo Books

3-Talking Crows
Plot: Follow Magnus, Korvern, and Septimius in this black-humored short story as they talk on all manner of aspects. From stray dogs and men of evil hearts, to matters of politics and things preternatural. Fiscal austerity, cats, dead elders, and evil spirits to name a few. Strange things for crows to ponder on, indeed.
At Barnes and Noble
At Google Play
At Google Books
At the Smashwords store
Kindle Store (not yet price-matched to be free)
At the iBook Store
At Scribd!
At 'txtr
At #ebooks with sounds
At Oyster
At youheartbooks
At Kobo Books

PS: I made the drawings; the actual cover desgin was done by a very good friend of mine.

Monday, 11 August 2014

I don't get it...

So we have a top guy at S&Ps who understands endogenous money. Then why maintain the bullshit rates for sovereign credit?