tag:blogger.com,1999:blog-5908830827135060852.post7866924572010086120..comments2024-03-01T02:40:14.946-05:00Comments on Bond Economics: The Limited Role Of Currency In Government FinanceBrian Romanchukhttp://www.blogger.com/profile/02699198289421951151noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5908830827135060852.post-20319632678326718172015-08-22T08:09:00.735-04:002015-08-22T08:09:00.735-04:00That's somewhat of a special case of the "...That's somewhat of a special case of the "underground economy." It may matter for the other economies, but it has no direct effect on the U.S. domestic economy (other than possibly creating demand for the U.S. dollar). It does increase seignioriage "revenue," but that is a fairly steady effect.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-14381709845352374402015-08-21T16:58:59.133-04:002015-08-21T16:58:59.133-04:00Remember the US Dollar is widely used internationa...Remember the US Dollar is widely used internationally Brian and currency is often used in this case.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-38307399160825460842015-08-19T15:49:46.418-04:002015-08-19T15:49:46.418-04:00So here we have evidence of the government literal...So here we have evidence of the government literally spending by printing money and taxing by unprinting money.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-63148934252135657072015-08-18T08:52:00.539-04:002015-08-18T08:52:00.539-04:00R
The problem here is failing to separating the n...R<br /><br />The problem here is failing to separating the note from the liability behind it. A bank note is just a receipt for money. It isn't the actual money. <br /><br />There are times when a receipt is a receipt for something and a time when it is just a piece of paper. <br /><br />Once taxes are paid - and the liabilities of the central bank represented by the note transferred to the Treasury - the bill becomes just a piece of paper again. And it remains a piece of paper until it is reissued as a receipt for some central bank liabilities. <br /><br />The form of paper recycling used is merely a facilities matter. You can shred and print new, or you can collect them up and transport them to a note collator. <br /><br />You're more likely to do the latter if you have those fancy plastic notes the Canadians are so fond of :)NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-42673377229044588862015-08-18T07:40:37.215-04:002015-08-18T07:40:37.215-04:00I will admit that I did not check up on Mosler'...I will admit that I did not check up on Mosler's story. The Canadian government is more frugal and would probably attempt to recirculate the notes.<br /><br />Mosler presumably over-simplified the situation (I doubt that the same employee dumps the notes directly in the shredder), but the overall picture seems reasonable. Not many people pay income taxes with currency, and so there is probably limited mechanisms for currency re circulation from that office. The path of least resistance is to treat the notes as damaged, and take them out of circulation. Which means they ultimately get shredded.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-38768777594374603232015-08-18T00:29:47.320-04:002015-08-18T00:29:47.320-04:00"Modern Monetary Theory authors enjoy pointin..."Modern Monetary Theory authors enjoy pointing out that when this is done in the United States, the government gives the taxpayer a receipt and then destroys the bills received.[*] "<br /><br />Brian,<br /><br />I do not know why you seem to endorse this. You quote Warren Mosler in the footnote too. Nothing like that happens. Taxes paid with currency notes are not destroyed literally. Even if the notes are damaged, it is sent to the Federal Reserve. <br /><br />Nothing like the tax man throwing the cash in the shredder after the tax payer leaving the room happens. <br /><br />Damaged notes are retired regularly but that has nothing to do with taxes. I can go to a bank and exchange an old note for a new one and the bank will send it to the central bank which will reprint. <br /><br />The underlying point that the currency note is otherwise just worth the paper it is printed on and the one which gives it value is a social relation is fine. But I find the shredder bit hilarious. This is because people have all sorts of wrong notions about money and shouldn't be told something which doesn't literally happen to confuse them even more. Ramananhttp://www.concertedaction.comnoreply@blogger.com