Monday, December 17, 2012

NC register: The Bishops Were Wrong On The Ryan Budget


A blogger at the NC Register gets it completely wrong.

Here in a pre-election post in defense of the "Paul Ryan Budget" that was criticized by US Catholic Bishops earlier this year, this blogger depicts government "debt" as immoral.
Let me cut to the chase, the USCCB was wrong (At least part of it). The text of the letter issued by the Bishop's Conference gets the basics wrong and completely ignores the immorality of continued debt...
This is a bit ironic as the recent Papal communication last week for World Peace Day "completely ignored" public debt/private savings and instead focused on unjust economic outcomes solely without mention of so-called public "debt", otherwise known as private "savings".

It is also helpful to keep this scripture in view in regards to public "debt":
8 "Or what woman having ten drachmas, if she should ever be losing one drachma, is not lighting a lamp and sweeping the house and seeking carefully till she may be finding it? 9 And, finding it, she is calling together the friends and the neighbors, saying 'Rejoice together with me that I found the drachma which I lose!' 10 Thus, I am saying to you, there is coming to be joy in the sight of the messengers of God over one sinner repenting." Luke 15
If public "debt" was immoral, I wonder why the Lord would not have used this story of a woman overjoyed with net savings of 10 drachmas to instead scold the civil government of Judea for not running a "balanced budget".... perhaps because the Lord is NOT STUPID AND BLIND...

14 comments:

frlbane said...

Actually, paying interest on the National Debt is immoral. That interest transfers purchasing power in net from the poor who typically own little sovereign debt to the rich who typically own much. Yes, the monetary sovereign is not limited in how much interest it can pay but it is limited in how much money it can spend into existence without causing price inflation.

Also this:

The rich rules over the poor,
and the borrower becomes the lender’s slave.
Proverbs 22:7 New American Standard Bible (NASB)

Yes, in the case of a monetary sovereign, the slavery is voluntary. Nevertheless, we are suffering a needless Depression because some wish to to protect or increase the real yields on their otherwise risk-free sovereign debt?


Matt Franko said...

f,

You've got it backwards even in your own false paradigm, if you have to look at it as govt "debt", then logically, we (the non-govt sector) are the "lenders" and "the govt becomes OUR slave" which is perhaps correct because govt is (supposed to be) "of, by and for the people"

rsp,

frlbane said...

and "the govt becomes OUR slave" which is perhaps correct because govt is (supposed to be) "of, by and for the people" Matt Franko

I agree the government is the slave but it is a slave of the rich and the banks, not the people.

paul said...

"it is limited in how much money it can spend into existence without causing price inflation." - fribane

Although it may be theoretically possible for increased savings among the richest of Americans to cause some amount of price inflation, I am unaware of the transfer function that would have to take place in order for it to happen?

Are you saying that the very existence of a stock of dollars "influences" prices? Or is it spending?

Do you think rich people…who already have more money than it is possible to spend, are going to spend more because of a trickle of interest flowing in, much of it outside the country?

I do agree completely however that paying this cohort interest for nothing is an odious welfare-for-the-rich benefit.

paul said...

Matt, practically speaking, the government is nothing more than a balance sheet entity…although I have seen it described as an insurance company with an army.

Everything else associated with government is extracting a stream of money, and it all goes to the non-government…the government has no need for money.

Don't you have to have at least one participant to have slavery?

Matt Franko said...

Yes Paul agree, I think the scriptures put it as (for "Christians" anyways): "we should all be slaving for one another..."

"13 For you were called for freedom, brethren, only use not the freedom for an incentive to the flesh, but through love be slaving for one another." Galatians 5:13

rsp,

Matt Franko said...

and I would add that without civil govt providing adequate NFA balances to allow domestic savings and settlements, nobody can "slave" for anybody...

and it all easily degrades to where we just try to screw each other over to obtain whatever pitiful amount of balances that are available...

This is why the Lord pointed out the joy of a woman who had sufficient access to adequate measures of these balances here...

What was the source of her "joy"? She was joyful in that she remained in possession of adequate amounts of currency balances...

rsp

frlbane said...

Although it may be theoretically possible for increased savings among the richest of Americans to cause some amount of price inflation, I am unaware of the transfer function that would have to take place in order for it to happen? paul

I'm not necessarily talking about the richest Americans - just those rich enough to buy sovereign debt. But as for the richest Americans, I'm pretty sure they won't drive up consumer prices but they might easily use their ill-gotten gains to drive up the cost of land, housing and other rent generators and thus rents themselves.

I do agree completely however that paying this cohort interest for nothing is an odious welfare-for-the-rich benefit. paul

And it creates a class of people who benefit from deflation since deflation does not increase the default risk of sovereign debt (there is none in the case of a monetary sovereign) but it does increase the real yields on sovereign debt.

frlbane said...

and I would add that without civil govt providing adequate NFA balances to allow domestic savings and settlements, nobody can "slave" for anybody... Matt Franko

NFA balances can and should be provided by monetarily sovereign governments but without the payment of usury.

frlbane said...

I'm pretty sure they won't drive up consumer prices frlbane

With the exception of rents.

paul said...

"they might easily use their ill-gotten gains to drive up the cost of land, housing and other rent generators and thus rents themselves." - fribane

My main concern is that they use those ill-gotten gains to co-opt government and tilt the playing field towards them and away from us. I think the net effect of that is worse than what results from the other factors. YMMV.

Fribane, it sems to me that we pretty much agree on all of these issues…I don't mean to be seen as "dogging" you. It's just that when you make statements using "couunterfeiting" and "usury" your message starts to come across like one of Bob Roddis' rants, except yours tend to make sense if one looks closely.

Still, there isn't always an obvious logical path from your statements to how it affects the economy and it's participants. Details matter. It would help if you added more support to your statements so they at least point at the target rather than near it.

I don't mean this as a criticism, it's a suggestion and it is my view only. You seem to me to be one of the people that "gets it", so I don't wish to discourage you.

The problem with credit is the implementation, the management or lack of, not the system itself.

frlbane said...

The problem with credit is the implementation, the management or lack of, not the system itself. Paul

I don't see any need for credit once the entire population, including non-debtors, is bailed out equally with new full legal tender fiat (Greenbacks) until all private debt is paid off or at least until all deposits are 100% backed by reserves. But after the bailout period*, I have no objection to purely private banks (no government deposit insurance, no legal tender lender of last resort, the monetary sovereign itself providing a risk-free fiat storage and transaction service that never lends, especially to the banks) attempting to extend credit.

*During the bailout period, a temporary ban on further credit creation would be necessary so that the repayment of existing credit would create a deflationary hole in the money supply that the metered bailout with new fiat would fill for no net change (or a slight increase if desired) in the money supply (My definition of "money" includes "credit"). That way, the deficit hawks cannot complain that the bailout would cause price inflation.

paul said...

"I don't see any need for credit once the entire population, including non-debtors, is bailed out equally with new full legal tender fiat…"

What about business investment?

Most households don't have any kind of savings, the bottom 65% have zero net, and currently Gross Private Savings is about $2.8T…a far cry from $12T (current non-financial business debt).

frlbane said...

What about business investment? paul

The bailout would create a vast pool of private savings since non-debtors would receive equal amounts too. Business could either borrow those savings at free market interest rates or issue common stock. And if common stock could be directly used as private money with no other legal disadvantages to fiat other than that it could not be used to pay taxes then the amount of common stock issued would not be limited to the amount of private savings available to buy it since the common stock money would bypass the need for fiat except for the payment of taxes.