I welcome their hatred

13 September, 2017 at 20:59 | Posted in Politics & Society | 3 Comments

 

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3 Comments

  1. Yet wasn’t it under FDR that the US Federal Government began to insure the private liabilities of the banks, including their privately created liabilities (“Bank loans create bank deposits”)?

    Was/is not the ethically correct solution to allow all American citizens to have inherently risk-free fiat accounts THEMSELVES at the central bank or US Treasury and never again have to work through a private bank or else be limited to grubby, unsafe, inconvenient physical fiat?

    • Andrew Anderson, if you look into the history even just a bit, you will realize that banks were failing left and right and all over the place in the US at the time FDIC was made into law. How many more would have failed had all at once a Fed deposit account been made available to bank customers/depositors as a completely safe, unlimited savings account? I will tell you- all of them. Every bank would have failed at that time and depositors would have nothing in their accounts to withdraw- very few would have been able to withdraw the funds in their accounts in the first place.

      And keep it in mind that FDIC only covered the first $2,500 per account when enacted. So not much protection for the millionaires of the time, nor should they have been protected in a time of deflation and a lack of investment. What are the ethical obligations for government to guarantee the savings of the rich, let alone the practical economic implications of that policy in a more or less capitalist economy?

      • What are the ethical obligations for government to guarantee the savings of the rich, Jerry Brown

        The debt of a monetary sovereign, being inherently risk-free, should yield, at most, 0% minus administrative costs in order to avoid welfare proportional to account balance. And that’s for the longest maturity sovereign debt (e.g. 30 yr. US Treasury Bonds); shorter maturity sovereign debt should yield even less, i.e. have NEGATIVE YIELD, with demand fiat* account balances at the central bank or equivalent, having zero maturity wait, costing the most, i.e. MOST NEGATIVE YIELD (interest).

        So while the rich (and other large fiat holders including the banks) should be able to save fiat risk-free, they should have to pay for that ability beyond a, say, $250,000 individual citizen limit, via negative interest.

        … let alone the practical economic implications of that policy in a more or less capitalist economy? Jerry Brown

        Unethical finance is proving to be very impractical in that productivity gains have not and are not being justly shared. We should reform that and in the process** provide restitution for the victims.

        *Physical fiat, aka “cash”, should, beyond petty amounts, be subject to negative yields too by this logic IF we wish to maintain longer maturity sovereign debt as a useful tool for fiat sterilization by the central bank or Treasury.

        **e.g. The proper abolition of government-provided deposit insurance should require $trillions in new fiat to be equally distributed to all citizens to provide the reserves needed for the xfer of at least some currently insured deposits with the banks, etc. to inherently risk-free accounts at the central bank itself.


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