« Modern Monetary Theory - Fraud 2 - DebtModern Monetary Theory - Introduction »

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Comment from: Adumbrator [Member]

I discovered that this series sparked a comment on MikeNormanEconomics, where Matt Franko said…
OK I’ve read enough, right in his chapter one: “In an instant, the state under FDR in 1933 effectively confiscated personally held gold and compelled all debts previously denominated in gold to be payable in terms of paper, which constituted a wholesale theft from everyone in the community. ” That’s all I need to see at this point…
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Mr. Franko evidently takes exception to my reference, which the original points here in Wikipedia, for: 1) the clause regarding gold confiscation, and here for 2) the clause about debt repayment in paper. The implication is that he finds the references not credible or not relevant.

Credibility: Here are a few more references to the points that these acts “revoked gold as universal legal tender for debts, and banned private ownership of significant amounts of gold coin". To be clear, some of these propagate some other fallacies about the causes and cures of that depression, but the conditions of gold ownership are pretty explicit in the public record.
http://en.wikipedia.org/wiki/History_of_the_United_States_dollar#The_Gold_Reserve_Act
http://www.answers.com/topic/gold-clause-cases
http://www.enotes.com/gold-reserve-act-1934-reference/gold-reserve-act-1934
http://www.presidency.ucsb.edu/ws/index.php?pid=14610&st=&st1=#axzz1rCgtKLGV
To be sure, I did not have to dig into the Google results to find these references, so I think they fall beyond the threshold of cherry-picking

Relevance: Mr. Franko gives no other indication of his objection, so I can not determine where my point was lost. Absent specific criticism, I will raise one point that I did not make explicit in the original writing. In the subject fraud, Mosler is making the point that a government which imposes a new currency on the population can not expect to receive any of that currency returned in taxes unless some of it is first distributed to the people who will later have to pay up. Of course this is true, almost by definition.

However, the government does not just distribute the currency free and clear - such a process would be nugatory. The plan that Mosler has in mind is that first the government compels people to give up their time or property, and hands over the currency in exchange; in any other circumstance such a process would be condemned as a blatant act of thievery upon the entire population.

So in addition to the other problems previously highlighted about the MMT frauds, I question why we should not have a similar reaction of condemnation to the Mosler plan to create a new currency?

09-09-12 @ 13:52 Reply to this comment


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