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View Diary: There is NO fiscal cliff. (69 comments)

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  •  Personally, I think the government collects (5+ / 0-)

    revenue to keep the money moving and that's why I agree the hoarders should now be taxed more.
    On the other hand, all of this only applies to the federal government. The states are in a different situation, as are the cities, because they don't issue their own currency. Indeed, the countries of Europe who have recently adopted the Euro are discovering what that's like. The citizens approve because having to change currencies is a nuisance, but the countries are finding it hard to resists the imprecations of investors who bought debt and now want to be paid interest for doing nothing.
    Getting over the idea that currency has value is going to be difficult everywhere because, as long as it was tied to relatively scarce metals, it did.

    Just think, it took just one generation for all the gold plundered by Spain from the Americas to be transferred to the Dutch vaults and sequestered as the backing for notes that were issued to finance Britain's industrial revolution, from which the Dutch benefitted without doing anything but handling money.
    There was good reason for Jesus to drive the money changers out of the temple.

    We organize governments to provide benefits and prevent abuse.

    by hannah on Sat Nov 10, 2012 at 10:19:13 AM PST

    [ Parent ]

    •  Currency does have value (0+ / 0-)

      Currency is backed by the power of the government to collect taxes.  And even to seize property.  

      So ultimately, currency is backed by the entire output of the economy.  The trick here is, if people are unemployed, and not creating output, then it really costs the government nothing to pay them to then create output.  The new currency is backed by the new output.  

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