Adumbration

Concerning SEVEN DEADLY INNOCENT FRAUDS OF ECONOMIC POLICY, by WARREN MOSLER
http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

This multi-part essay discusses Warren Mosler's booklet entitled "SEVEN DEADLY INNOCENT FRAUDS OF ECONOMIC POLICY".  It took me far longer to complete this essay than I originally anticipated, a result of procrastination, other obligations, and then a naive notion of figuring out how to do a side-by-side commentary in web format without copying the entire content of Mosler's essay.  In the middle of that investigation into web page formats and cascading style sheets, I came to find that Taylor Conant at Economic Policy Journal undertook a far more exhaustive discussion of the material, so rather than sort out the vagaries of web formatting I have elected to present this work in a form with embedded quotations of relevant source material.  I also split this up into sections to facilitate editing and posting the result.  The result will be posted over a period of days.

I started reading the booklet in April 2011, and began taking notes as I got deeper in to the story. For the booklet in toto, 117 pages takes a while to read, longer to think about, and longer still to attempt a reasoned analysis of the content, and this was not my only occupation; I only completed my first pass reading the paper in August 2011, from which point I completed most of the material up through fraud number 4.  Thence followed above-mentioned period of procrastination, finally returning to the details in May 2012.   So you can see that the following has taken many months to compose and publish. In the course of this activity I discovered Mosler among the proponents of Modern Monetary Theory, which developed from theoretical precedents in "chartalism".

I would not have spent this time if I simply agreed with all the points in his essay - had it been entirely consistent with my observations of how people interact with one another it would have been easy to say "right on" and leave it there. The fact of the matter was not so simple - Mosler makes some blunt statements about the underlying nature of fiat currency that may appear shocking by their obvious truth upon a little reflection - the world's reserve currency really can, "operationally", erase any debt by simply adjusting the electronic account balances. But I think Mosler does not correctly address some of the ramifications of this, ramifications that make fiat currency operate in opposition to the general welfare; the following focuses mostly upon those ramifications.

I broke this essay into sections corresponding to the seven points in the original essay, but the points are interrelated so the following includes cross-references for recurring themes about what constitutes wealth, and the causes of inflation and recession.  Each section starts with a quotation of the claim.  The following links will not all work until this essay is fully published.

Introduction

1 - Government Spending

2 - Debt

3 - Budget deficits

4 - Social Security

5 - Trade deficits

6 - Investment and savings

7 - Future effects

Wrap-up