Taxes...

[sagerage]

Tomas - I see you're still suffering from shell-shock...

No really, I've asked many questions and none of them seem to have gotten an adequate answer.

...Instead, I'm getting spam. Great.

[Tomas]

Tomas - I see you're still suffering from shell-shock...

No really, I've asked many questions and none of them seem to have gotten an adequate answer.

...Instead, I'm getting spam. Great.

Well now we're getting somewhere :-)

Why the hell don't you articulate what the fawk you are yapping about?

You put a couple one liners out there and expect people here to know what you need to hear?

Like I said before - do you have some sort of learning disability not to understand "why is 'the government' printing paper?"

Provide a couple websites if nothing else. Try wikipedia. Go to your government printing office. Call up the state treasury department.

You are the one hawking an open can of spam.

ps- Get a job, deadbeat.



Tomas (the tank)
Prince of Jerusalem
16 Degree
Scottish Rite Free Mason

.

[DFBatosee]

Shahrazad,

Printing money out of thin air is about the most stupid thing I can think of.

Not to mention impossible.

It represents wealth, but some people like you make the mistake of thinking that the green bills themselves are wealth.

I still think that they are. Print $10 bucks and try to buy something with it - what happens?

Is it the paper that is worthy, or what it can acquire?

I see no difference.

Imagine that today, every person in your country printed 1 million dollars and we all agreed to accept them.

That's not what my question means. (Q-Instead of paying taxes for road repair, let's have the government print money to pay those workers.)

How much in goods do you think you'd get for your new money?I think you'd be lucky if that million dollars was worth 10 dollars.

Why does the value of goods have to go up?

your so dumb it cant be represented you dont listen either.....ok tomas...completely right....shaz also right....dude you cant argue about stuff you dont know....if you get all your friends to print 1million dollars then the price of stuff will go up and what costs 10 dollars before will cost a few thousand but in turn it will still be ten dollars because you now have 1 million....which is nothing but paper...like in china....thats why it cost like 150,000 yen for a gameboy....there is so much money over there the price of stuff is up because the amount of money is up....understand that? maybe?

[DFBatosee]

Tomas - I see you're still suffering from shell-shock...

No really, I've asked many questions and none of them seem to have gotten an adequate answer.

...Instead, I'm getting spam. Great.

also your a dickstick...dont be making jokes about the army or vets..... you lil shitstain....just go grab a box of pokemon cards crawl into a corner and wet your bed.....

[sagerage]

DFBatosee,

also your a dickstick...dont be making jokes about the army or vets..... you lil shitstain....just go grab a box of pokemon cards crawl into a corner and wet your bed.....

B-b-but...he started it... *sniff*

if you get all your friends to print 1million dollars then the price of stuff will go up and what costs 10 dollars before will cost a few thousand but in turn it will still be ten dollars because you now have 1 million....which is nothing but paper...like in china....thats why it cost like 150,000 yen for a gameboy....there is so much money over there the price of stuff is up because the amount of money is up....understand that? maybe?

No, I still don't get it and I don't think you understand either. Wow, so you've heard a few things here and there...Great! (You're so smart - agreein' and sticken' up for Tomas). Please answer this: Why does the price of stuff go up, when the amount of money goes up? (and is there a way around this?) Btw, my first Question was: Instead of taxes, why can't the government just print its own money?

So, instead of getting my questions answered, I'm getting insulted:

...Printing money out of thin air is about the most stupid thing I can think of.... ...Are you some sort of a developmentally disabled retard or what?... ...do you have some sort of learning disability... ...ps- Get a job, deadbeat.

Things like this are seen throughout the world. It's no surprise that we still have wars going on.

I've asked questions to every response that I didn't understand and those questions weren't answered, instead, people find the need to repeat themselves and show me educational material - with terms and stuff. If you truly understand it, then it should be easy to explain. The reason why some of you are getting emotional is so obvious...Heh, it can't be any other way (...if you know what I mean).

[sagerage]

The government uses our money to support itself and this country (road repair, military, hospitals . . . etc). Now, my question is: instead of depending on the people for this support, why can't they just print the money which they need?

If the government printed all the money it needs, then (as some of you think) everything else would increase in price...Why? (What would happen if everything stayed the same? Why could it not stay the same?)

How are prices related to the value of money? (So...whether I have 1k or 10k, how is the price of something going to be any different? The only difference I see, is that I'd be able to buy more, then I would have otherwise, if I had less money.)

Money - someone does something for someone else and instead of getting something of value (like some food, or a place to stay . . . etc), they're handed a piece of paper, which represents the same value of some food, or a place to stay . . . etc. Either way, each person gets what they want. Now, if that piece of paper is magically created out of thin air, without being earned... The value of it doesn't change, so why should anything else?

[brad walker]

Sagerage,

Why is counterfeiting money illegal?

[sagerage]

Why is counterfeiting money illegal?

I'm not sure, why? (It's similar to: if the police can carry guns, then why can't everyone else do the same?)

You're not paying attention to MY questions. I'd like you to answer them, if you can.

The government works for us and so we pay them with our taxes and in turn they use part of that money to improve our country. Is that it?

[brad walker]

Why is counterfeiting money illegal?

I'm not sure, why? (It's similar to: if the police can carry guns, then why can't everyone else do the same?)

Think about it.

You're not paying attention to MY questions. I'd like you to answer them, if you can.

DHodges and I answered your question. Funding government through the printing press is doomed because of greed. Either they'll hyperinflate the money supply or the people will revolt.

Now, if that piece of paper is magically created out of thin air, without being earned... The value of it doesn't change, so why should anything else?

This is your problem. Money doesn't have fixed value. The reasons are complicated. I only know a few minor reasons why the value of money fluctuates. If this issue matters that much to you, you need to think and research.

[brad walker]

Why is counterfeiting money illegal?

I'm not sure, why? (It's similar to: if the police can carry guns, then why can't everyone else do the same?)

Think about it.

Please answer this: Why does the price of stuff go up, when the amount of money goes up? (and is there a way around this?)

Counterfeiting (creating money and spending it) is theft, since the counterfeiter gets something for nothing. Because TANSTAFL, the counterfeiter passes the cost of goods received onto the rest of society. No one individual or corporation wants to absorb the full cost, so prices go up across the board. This spreads the cost of the theft. Increasing the supply of fiat money lessens its value.

This is overly simplistic, but the government creating money and spending it isn't much different. If the government creates too much money (greed), it will suck the citizens dry.

[Ryan Rudolph]

Sagerage,

Question was: Instead of taxes, why can't the government just print its own money?

You need to think about what ‘money’ represents, it mostly represents the labor of other people, and that is what gives money its value, money represents an exchange of goods and services, and a strong currency is an indication that the economic system is functioning fairly smoothly. If you print money out of nowhere, it has no value; it needs to be printed within the demands of the economy, meaning it needs to be printed to adequately deal with the amount of business transactions happening within the economy. If you print too much money, it inflates the currency, and the cost of living goes up.

Taxes are necessary to provide government services because basically the people’s labor is being exchanged for another type of labor that they all collectively need such as : highways, wellfare, education, healthcare, military and so on.

And that is the major difference between socialism and libertarianism is that a person with socialist views believes it is the government's responsibility to tax all people to provide essential services that only some will take advantage of, whereas a libertarian will suggest that the government shouldn't tax at all, and instead allow the free markets to offer these essential services through privatization. And the major debate is can government provide some services better than a private company? And a libertarian will suggest that the government does a worse job providing some of these services because there is no competitive pressure on them to improve.

And going back to the currency issue, so If there is no labor backed behind the currency then the currency isn’t worth anything. That is why counterfeit money isn’t worth anything, no labor, service or good has been backed behind it, and so it hurts the value of the currency as a whole. So basically, the FED just can't print all the money it wants without hurting the value of the currency, and that is one of many reasons why the US currency has been losing its value. There’s also a certain subjective component to the value of the US Currency as well. For instance: If the world collectively disagrees with the decisions of the US in places like Iraq, and they stop using their currency in business as a result then the demand for the currency decreases, and so does it overall value.

[Shahrazad]

sagerage,

How are prices related to the value of money? (So...whether I have 1k or 10k, how is the price of something going to be any different? The only difference I see, is that I'd be able to buy more, then I would have otherwise, if I had less money.)

The price of things is irrelevant as it is rather arbitrary; we could all agree to raise prices up to heaven, or lower them to the ground, and the whole economy would adjust to the change.

Imagine that you live in a very simple and closed economy. There are only 10 goods and only 10 dollar bills exist. With 10 dollars you can buy 10 goods. Now, someone prints 10 million dollars, (this part is very important, so please don't miss it) but no goods are brought into the economy . Now 10 million dollars can only buy 10 goods, the same goods that could be bought with 10 dollars before. It doesn't matter what price you place on each good, 1 penny or 1 million bucks; it remains true that 10 million dollars will only get you 10 goods, because that is all there is.

So, why would you want 10 million dollars, if 10 dollars will do the same job?

I hope this is starting to make some sense to you.

-

[sagerage]

So, what you're all saying, in one way or another, is that money is simply paper that it is of little value by itself. This paper only becomes valuable when it is trusted. It is like a promise of value. And the valuable thing in all this is....is where? That reminds me, how did it get started...

...In the beginning, there was trade - I'll give you some food and a place to stay, if you work for me. Later on, the value of the place to stay and the value of food, changed into the form of money (how?), so that if a person didn't need a place to stay or food, they could always get something of similar value ...But what? ...A piece of paper promising value? The person would then go into a store and presto, there it is, the valuable thing that's been promised. Now, here's my issue: whether the person actually worked or not, for the money, that valuable thing in the store would still have the same price tag; in other words the goods or services would still be purchasable by the same thing. Money starts to collect. The value which money once promised starts to decrease - WHY? (keep reading)

Shahrazad,

Imagine that you live in a very simple and closed economy. There are only 10 goods and only 10 dollar bills exist. With 10 dollars you can buy 10 goods. Now, someone prints 10 million dollars, (this part is very important, so please don't miss it) but no goods are brought into the economy . Now 10 million dollars can only buy 10 goods, the same goods that could be bought with 10 dollars before. It doesn't matter what price you place on each good, 1 penny or 1 million bucks; it remains true that 10 million dollars will only get you 10 goods, because that is all there is.

OK, I'll buy the goods with 10bucks and I'm left with a worthless $9,999,990. And there are absolutely no other goods or services which I can possibly buy...Right? What if, I put all of it into a bank and save it for another time. Or, maybe travel to another country...?


Shahrazad, what you're saying is that our economy is like a bubble and all the money for all the goods and services is already in circulation, right? What if billions of dollars burned to a crisp. Would the prices for everything drop? WAIT - that money "represents" something of value, so that something of value would still be there. So, the question is, what does money represent?

[brokenhead]

Sagerage,
Don't forget that the amount of cash in circulation is miniscule in comparison to the GNP. Cash is not the basis for this - or any - modern economy. It is a commodity. It's value to consumers is dynamic - you don't hand it over to a retailer unless you agree that his goods are roughly equal in value. Although it is dynamic - based on countlesss decisions consumers make every hour of every day, the value of a dollar remains - hopefully - fairly stable from day to day. This is due to the enormous number of transactions that occur, and to a free market and competition. When people get skittish about the economy, they often buy - invest in - commodities like gold or silver, which they believe to have a more intrinsic value than cash.

In fact, companies that are cash rich rarely stay that way. A company that is cash rich presumably got that way deliberately, with the eye to purchasing, expanding, or investing, i.e., trading the cash for something tangible.

The amount of cash in existence does not come close to covering all the savings and checking accounts on deposit in the country. A bank must have a minimum amount of cash on hand as a percentage of the total amount its customers have on deposit. You often see armored trucks shuttling bags of money back and forth among banks, not because the cash is being paid out, but because the banks are required to maintain this minimum.

To an extent, you might say it's all smoke and mirrors. But this smoke and these mirrors are vitally important, since they bolster people's trust in their currency and therefore in the strength of their economy. Don't forget, when you do a service for someone else, food does not instantly appear on your table. You need a mechanism - cash - to exchange until you can get to where the food is and spend it, unless you are bartering for the commodity you need.

It's a system that was not imposed, but rather that has evolved. It seems to work. And it depends on the trust the consumer has that his work will be remunerated. If he could print money, he wouldn't work.

And with everyone having a printer these days, mints have had to become more sophisticated in printing money that can't be counterfeited. Not that people aren't trying. Note that in many stores, cashiers will test larger bills by marking it with a special marker. They didn't use to do that.

Your question about the government printing money to pay for public services isn't totally inane, either. FDR did precisely that to get us out of the Depression. A Depression can be viewed as a rapid deflation. Infusing money into the system is inflationary and had the effect - arguably - of lifting us out of the Depression of the 1930's. But labor had to be done in exchange, such as the TVA and other large projects. Sometimes the labor was having a group of men digging a ditch, and another group filling it in again, makework, just to give their pay some intrinsic "value."

[Shahrazad]

ragesage,

So, what you're all saying, in one way or another, is that money is simply paper that it is of little value by itself. This paper only becomes valuable when it is trusted.

Yes.

It is like a promise of value.

Yes. It's called a note.

And the valuable thing in all this is....is where?

Labor, in the form of goods and services.


My God, he's catching on! Thank you, Lord!

...In the beginning, there was trade - I'll give you some food and a place to stay, if you work for me.

You must be a capitalist to come up with that. I would rather give an example such as "I'll make you a delicious meal if you make me a small table". Or "I'll give you some strawberries if you give me a piece of deer".

OK, I'll buy the goods with 10bucks and I'm left with a worthless $9,999,990.

Actually, you'd still have 1 million bucks, if you just used the 10 bucks that were already circulating before, remember?

And there are absolutely no other goods or services which I can possibly buy...Right?

Exactly.

What if, I put all of it into a bank and save it for another time.

Sure, do that. Maybe in a year or two, more goods will become available.

I saw some pics during the 20s recession, where people used dollar bills as wallpaper.

Or, maybe travel to another country...?

Yes, but nobody has heard of your notes there, so they won't accept them.

Shahrazad, what you're saying is that our economy is like a bubble and all the money for all the goods and services is already in circulation, right?

Yes, but of course, new goods and services can go into circulation every day, but the demand for them has to exist, or be created.

What if billions of dollars burned to a crisp. Would the prices for everything drop?

Yes, but the value of the goods would not.

There are many ways in which the value of goods can drop. Can you name a couple?

WAIT - that money "represents" something of value, so that something of value would still be there. So, the question is, what does money represent?

The product of your useful labor, in the form of goods and services.

Another question for you to ponder: What makes goods and services valuable in the market?

Brokenhead said,

Sometimes the labor was having a group of men digging a ditch, and another group filling it in again, makework, just to give their pay some intrinsic "value."

This type of labor has no value, and it adds absolutely nothing to the GNP.

-

[xerox]

...

[sagerage]

Counterfeiting - when spending this money, one is stealing the value of a good or service which is already represented by money which is already in circulation. What happens next... useless money. Money that doesn't have a value behind it, because the counterfeited (same as printing money, or free money) currency took it (the value).

Brad,

No one individual or corporation wants to absorb the full cost, so prices go up across the board.

The cost of the lose of value to something that's created instead of earned. So, money piles that has no value piles up and becomes worthless - the thing is, why would this cost a corporation? - They still got payed but with fake money that's represented as money earned (worthless money - but who's gonna know - first come, first serve?). So, yeah, I still don't understand WHY a corporations goods and service prices would go up. It's not like that fake

money which they received can be determined as fake, can it? If it can, then yes, the people who counterfeited the money and purchased from the corporation, basically stole...And the corporation raises its prices to make up for the lose (same thing happens with shoplifting. This is also where insurance companies finally pay up. That could also lead to them increase THEIR prices - domino effect, I guess (fixed prices may counter this effect!)). HOWEVER, the main thing that I don't understand from the very beginning is: who's gonna know that the money is fake? AND is a government printed it's own worthless currency and released it into the market, then fine that's similar to counterfeiting - the only difference is that the government's money looks exactly like the money with value behind it.

If the government creates too much money (greed), it will suck the citizens dry.

So, you're saying that people would exchange their paper for valuables to the point of there not being any valuables left? I can't see that happening. AND these are the things I don't understand - basically, how would they possibly catch on? --- Things would be selling out...HOWEVER... all they'd have to do is increase the supply to match the demand. That makes sense, I think. One problem: The corporation would see the high demand rate, so they'd become greedy and charge more... But, that's something totally different. This is also, where "fixed prices" would be useful.

Ryan,

You need to think about what ‘money’ represents, it mostly represents the labor of other people, and that is what gives money its value,

It's different then the value from say a nugget of gold.

it needs to be printed within the demands of the economy, meaning it needs to be printed to adequately deal with the amount of business transactions happening within the economy.

That demand fluctuates, so, some of that money naturally becomes worthless...Doesn't it?

Taxes are necessary to provide government services because basically the people’s labor is being exchanged for another type of labor that they all collectively need such as : highways, wellfare, education, healthcare, military and so on.

I think I get it: the government is a corporation in itself and their payed for their goods and services through taxes. People pay for the governments labor and taxes are like their prices.

ibertarian will suggest that the government shouldn't tax at all

So, it's not a totally out-there idea.

So basically, the FED just can't print all the money it wants without hurting the value of the currency,

It seems to be something which inevitably happens with a growing economy, right?

The price of things is irrelevant as it is rather arbitrary; we could all agree to raise prices up to heaven, or lower them to the ground, and the whole economy would adjust to the change.

Fixed prices seems to be key. There'd be a lot of useless money, but that money wouldn't lose its value by everything becoming more expensive.

brokenhead,

Don't forget that the amount of cash in circulation is minuscule in comparison to the GNP.

Is that why, as a country grows, so does the need for something such as currency to represent its value?

The amount of cash in existence does not come close to covering all the savings and checking accounts on deposit in the country.

And that's why Economic Depression start?

And with everyone having a printer these days, mints have had to become more sophisticated in printing money that can't be counterfeited. Not that people aren't trying. Note that in many stores, cashiers will test larger bills by marking it with a special marker. They didn't use to do that.

Yeah, I noticed anytime a go over to the local convenience store with a 20 or up, the casher always carefully inspects it. One way to get by this, is to print old bills... Is there something to counter this?

A Depression can be viewed as a rapid deflation. Infusing money into the system is inflationary and had the effect - arguably - of lifting us out of the Depression of the 1930's. But labor had to be done in exchange, such as the TVA and other large projects. Sometimes the labor was having a group of men digging a ditch, and another group filling it in again, makework, just to give their pay some intrinsic "value."

Wouldn't inflation just make everything more expensive?

Shahrazad,

Actually, you'd still have 1 million bucks, if you just used the 10 bucks that were already circulating before, remember?

Ahhh, yes. You...:)

Yes, but of course, new goods and services can go into circulation every day, but the demand for them has to exist, or be created.

I don't see how the demand for goods and services wouldn't exist... It does and it always will.

Me: What if billions of dollars burned to a crisp. Would the prices for everything drop?
You: Yes, but the value of the goods would not.

There are many ways in which the value of goods can drop. Can you name a couple?

It seems like our economies constantly inflate and deflate. The latter can be fixed with printing more money, while the former ...increased prices?

Ex. of a drop in the value of goods:

Rotting of food, more advanced technology, larger quantities and better qualities etc, etc...

The product of your useful labor, in the form of goods and services.

Another question for you to ponder: What makes goods and services valuable in the market?

Those services are no longer present and goods tend to lose their value, so it seems that inflation and deflation are inevitable. The only reason they don't cause a depression or other problems is because are economy is so complicated and we don't suffer as a whole.

xerox,

Hope this helps.

Yes, thanks. I'll respond properly later on. One thing: I always see the terms money and currency used interchangeably.

[Shahrazad]

sagerage,

Counterfeiting - when spending this money, one is stealing the value of a good or service which is already represented by money which is already in circulation. What happens next... useless money. Money that doesn't have a value behind it, because the counterfeited (same as printing money, or free money) currency took it (the value).

This post here is evidence that we are not completely wasting our time here with you, as you now understand the concept. Thank God!

So, you're saying that people would exchange their paper for valuables to the point of there not being any valuables left? I can't see that happening.

But this post here is evidence that you forgot what you learned. Go back and reread my example of the simple economy with only ten goods. Then replace the 10 goods with 10 million goods, and the 1 million bucks with 10 trillion, and look at it again.

You also need to stop looking at printing more money, and price controls as the solution to all financial problems. You've seen the trouble with paper notes -- they can be stolen and counterfeited. There's a better way we can use. Imagine that instead of notes, we all used a plastic card with magnetic data that accesses a central computer somewhere that has all the deposits and withdrawals that are made into your name, and knows your balance. Imagine also that your identity could be checked through your iris or thumb, such that if someone steals your card, they couldn't use it. All transactions could be done this way, and there would never be a need for paper notes. Nothing would circulate or exchange hands.

-

[Jason]

Imagine also that your identity could be checked through your iris or thumb, such that if someone steals your card, they couldn't use it. All transactions could be done this way, and there would never be a need for paper notes. Nothing would circulate or exchange hands.

So now they steal your card and your thumb/eye, it'd be "exchange hands" literally.

[sagerage]

Shahrazad,

Quote:
Me: So, you're saying that people would exchange their paper for valuables to the point of there not being any valuables left? I can't see that happening.

You: But this post here is evidence that you forgot what you learned. Go back and reread my example of the simple economy with only ten goods. Then replace the 10 goods with 10 million goods, and the 1 million bucks with 10 trillion, and look at it again.

No, I get it. I just meant that how could anyone notice it, when there's a constant supply of goods and services. Btw, I think, I grew out of your example and I'm ready for a little more complexity (although, we should still keep it relatively simple, with occasional introductions with new words and so on).

The question here, is: supply and demand is on a constant increase (growing population, technology, etc...) and so new money is needed (or liquid money - numbers - how fake, eh?).
Even-though, some old/new goods and services are losing their value and the new are taking their place. It still seems that value is on the rise. Am I making sense?

[Shahrazad]

So now they steal your card and your thumb/eye, it'd be "exchange hands" literally.

Not at all. Both of these technologies already exist and are being used. I went to a conference where they were explaining one of these systems, and I know for sure that the thumb application will not work with a dead thumb. So stealing my thumb would not get you any money.

Keep coming up with naive limitations; technology will always outsmart you, and robbers.


SG,

The question here, is: supply and demand is on a constant increase (growing population, technology, etc...) and so new money is needed (or liquid money - numbers - how fake, eh?).

When you say new money is needed, what exactly do you mean? New bills are printed often to replace old ones, but printing them "a lo loco" is not a sound policy.

-

[Shahrazad]

sagerage,

Here's an article you may want to read that deals with the issue of Central Banks printing money out of thin air.


As an aside, the economist who wrote it is my brother.


-

[brokenhead]

Imagine also that your identity could be checked through your iris or thumb, such that if someone steals your card, they couldn't use it. All transactions could be done this way, and there would never be a need for paper notes. Nothing would circulate or exchange hands.

So now they steal your card and your thumb/eye, it'd be "exchange hands" literally.

Ouch! Lol!

[Jason]

So now they steal your card and your thumb/eye, it'd be "exchange hands" literally.

Not at all. Both of these technologies already exist and are being used. I went to a conference where they were explaining one of these systems, and I know for sure that the thumb application will not work with a dead thumb. So stealing my thumb would not get you any money.

Keep coming up with naive limitations; technology will always outsmart you, and robbers.

Chill out, are you in the biometrics or security industries or something? You seem to be taking it a bit personally. Many high tech security systems are outsmarted, just look at the recurring security issues in the I.T. sector. Apparently the scenario I described has already happened: Malaysia car thieves steal finger.

[Shahrazad]

You seem to be taking it a bit personally.

I took nothing personally. You're reading far more emotion into my writing than is there.