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View Diary: New IRS report confirms upcoming retirement crisis (95 comments)

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  •  One quibble: Taxes don't fund fed gov (0+ / 0-)

    spending for a monetary sovereign of a fiat currency like the US.

    We can mark up the accounts for seniors without raising taxes.

    Cuz when you create money out of thin air, the ability to push a computer key is decoupled from the need to earn dollars.

    Taxes remove dollars from circulation.

    They don't pay for anything, not even our elderly.

    As long as we have the labor and natural resources with which to make the stuff our elderly need to survive, then we can afford to give them free money tokens with which they can purchase stuff from the younger generation, thus creating jobs for their children.

    Our elderly are job creators.

    So, just as we give banks reserves by marking up their account, we can give the elderly dollars by marking up their account.

    •  isn't the difference (0+ / 0-)
      So, just as we give banks reserves by marking up their account, we can give the elderly dollars by marking up their account.
      when we give the banks reserves, it is still government money deposited with the bank for them to lend?

      a loan vs. a gift?

      •  The Fed Reserve can either give banks reserves, or (1+ / 0-)
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        Auburn Parks

        can lend them reserves.  That's a policy decision.

        Banks make loans first, then if they don't have enough reserves, they find them.

        Either through overnight interbank lending or through the Fed acting as lender of last resort.

        Sort of the opposite of what most people think and say.

        But...  my point is that the Fed creates reserves out of thin air through simply marking up the accounts of it's member banks.

        We could do away with retirement savings and simply mark up the accounts of the elderly.

        Cuz dollars, coins, bonds and reserves are all created out of thin air.

        Cuz fiat currency is simply an accounting mark, keeping account of how many dollars are  in the private sector.

        It's a score.

        And like the bowling alley, the points don't come from anywhere other than the score keeper's desire to take note.

    •  But, the resulting... (0+ / 0-)

      ...inflation would have a ripple effect on the economy that includes a lot of negatives.

      After all, if it was this easy, why not just print and send every resident of the US a $5M bill every year? By your logic, all would then live in luxury (and, presumably, most would choose not to work as $5M is more money than most people ever thought they would have at any time in their lifetime, let alone as an annual stipend).

      Just "printing money" as you seem to propose is a form of taxation, it's just a wealth tax on all who hold assets in cash equivalents (regardless of their wealth).

      •  Well, I didn't say you could print into infinity. (0+ / 0-)

        You can, however, buy all idle capacity.  Idle capacity absorbs new dollars.

        If you don't, you get deflation, like what most are experiencing now.

        If you "print" past the point of the economy working at full capacity, then you begin having too many dollars chasing too few goods = inflation.

        So, you can't replace water coolers with expensive wine, or buy everyone a pony - unless doing so would create new, real output.

        If inflation becomes an issue, you tax away the excess dollars.

        But....   inflation is the constraint on spending.  Not affordability.

        As far as "just printing money" being somehow the issue.

        It's just what money is, it's just how we do it every day.

        How much should we print?  However much is needed to buy available capacity/real wealth.

      •  If you're addressing the idea of paying the (0+ / 0-)

        elderly once they retire rather than having them save:

        Let's say that over 10 years someone is paid 10 dollars, but saves 5.

        Or, over 10 years they make 5 dollars, and once they retire the receive 5 dollars.

        Either way, over a 10 year period 10 dollars have been printed.

        •  That's only true... (0+ / 0-)

          ...if the $10 paid in wages were "printed" rather than, the normal case where it is exchanged for something of $10 value (labor, presumably) and then exchanged again, by the worker, for something of $10 value (perhaps a good such as petrol or labor such as a physician's services).

          I'm afraid that I don't understand when you are proposing "printing" money -- I thought you were only proposing creating (i.e. printing) money to pay retirees.

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