Doug - The person you are talking about either does not understand the Wray/Bell argument or is subscribing to some other view, such as that of John Gelles (there is a New School grad student who does fit this latter, btw). You will not find the argument that no taxes are necessary or that the government should just print money to pay its expenses in anything by Wray, Bell, or Mosler for that matter.
When I said no taxes, no currency, I thought it would be understood that I meant state fiat currency. It was not an historical argument, although there are historical cases of new currencies being introduced through public receivability (requirement that tax obligations be settled in gov't currency), it was intended to make the point that public receivability is an important component of the demand for government fiat currency. Again, I have never read in anything by Wray et al that says no taxes are necessary, in fact quite the opposite. I also agree that there are important political issues involved. But modern governments (operating with a fiat currency and flexible exchange rates) are not constrained in their spending by purely financial constraints. My point about the Economists' statement is that the notions that any stimulus package should provide only a temporary boost; that investment incentives should be temporary; and that tax cuts must be revenue-neutral, seriously misunderstands our present economic situation. All these are found in the statement. I have serious reservations about the Bush tax cut proposal, but I also have serious reservations about the Economists' statement. One may disagree with me, as obviously many have (although I get the feeling some may have just signed on without really thinking it through--"oh, here's a petition against Bush, let's sign it"), but I see nothing outrageous or cranky (in the monetary sense) about my position. Mat -----Original Message----- From: Doug Henwood [mailto:[EMAIL PROTECTED]] Sent: Friday, February 14, 2003 12:38 PM To: [EMAIL PROTECTED] Subject: [PEN-L:34755] Re: RE: Re: FW: Economists' statement opposing the Bush tax cuts Forstater, Mathew wrote: >I don't think anyone argues that no taxes are necessary? Several years ago, I had an argument with a New School grad student who claimed just that - that the gov could just print money to pay its expenses. It was like no real resources were involved. > No taxes would >mean no currency, because taxes create the demand for money (see Wray's >book, etc.). That really strikes me as loopy. There's no private need for money? Money doesn't arise in exchange? Re: the deficit. Could the USG run a deficit of, say, 5% of GDP indefinitely? Could the debt/GDP ratio hit 100% with no ill effect? How about 200%? And doesn't, as Jim O'Connor put it, public debt increase capital's power over the state? Doug
