2008-2-21 15:39:00
Larry wrote:
"And do you suppose that the amount of goods and services is determined by voodoo or black magic, or do you suppose there are objective laws that govern what goods and services are offered for sale?"
JJ:
Silly question.
Larry:
"Yes, the supply of goods and services available is strictly governed by economic laws of supply and demand, the availability of credit, the rate of return on different investments just to name a few obvious factors.
"The economic laws that govern this are relatively simple in theory, and vastly complex in application because you have hundreds of millions of people who open their wallets every day and vote with their dollars to influence what goods and services will be supplied and at what cost.
"Your idea that government planners can competently manage the money supply to keep inflation low, or non-existent is not reflected in the reality of the U.S. economy in the last 50 years."
JJ:
No one is arguing that we have had competent money management not only in the past 50 years, but ever in history whether on or off the gold standard.
The management of the money supply cannot be done effectively even by honest intelligent people if we have a large amount of deficit spending. If spending is under reasonable control (which rarely happens) then excessive money does not have to be printed and stability can be achieved.
Larry:
"To see the truth of that statement look at the cost of 12 oz. of Coca Cola. In 1958 I paid $0.10 for that 12 oz. of Coke. Today I paid $0.79 for 12 oz. of Coke. If you do the math what then is the rate of inflation between 1958 and 2008? Have the planners of the U.S. economy managed to control inflation?"
JJ:
This has largely been caused by deficit spending causing excessive money to be printed.
Larry:
"Perhaps their idea of 'control' is to silently steal a percentage of your paycheck every year through the mechanism of currency inflation."
JJ:
Maybe.
Larry:
"Think of it as a hidden tax. Politicians love hidden taxes and the ability to create them."
JJ:
Agreed. No argument there.
Larry:
"The Soviets attempted to use science and mathematics to completely plan their economy. They failed. The principle should be obvious, especially to someone who claims to be focused on principles."
JJ:
Their planning was illogical especially when there system stifled individual incentive. It was obvious that their five year plans were not going to work.
Larry:
"Large complex economies are best managed by supply and demand where every one votes with their wallet. This is a democratic ideal if understood properly."
JJ:
No argument there.
Larry:
"Markets governed by a small number of bureaucrats, no matter how well intentioned (and you can't take their good intentions as a given), are always basically authoritarian."
JJ:
Right on.
Larry:
"I support free markets. I support freedom. I support democracy."
JJ:
Right on again!
Larry:
"If you support a managed, fiat money economy where unelected government officials determine fiscal policy, well, then what are you supporting?"
JJ:
Releasing money corresponding to the growth of the free market does nothing to hinder free markets, freedom or democracy. There has never been a time in the history of our Republic that money has not been infused into our system. Are you saying we have never been free?
Copyright © 2008 by JJ Dewey, All Rights Reserved