Actually a new legal tender distribution of legal tender to both debtors and savers (everyone) is completely moral under our current system of government backed fractional reserve banking in a government enforced monopoly money supply. As for debt to future generations, a distribution of new legal tender would not add to debt.

Printing huge sums of money, giving it to bankers – or whoever, really – and then putting future generations on the hook for paying it back is completely unethical and immoral.

And who in their right minds says that we aren’t on the very precipice of collapse? Isn’t that why, to this day, we keep spending billions we don’t have over and over again? If we aren’t in mortal danger of a huge calamity here, then why take such dramatic steps to “save” our system.

I think the owner of this blog is engaging in cognitive dissonance.

Potentially it is; if the banks start lending again. I presume you are speaking of price inflation.

Well, the distribution of new legal tender fiat is merely to prevent wealth destruction. To create wealth, particularly with an aging population, we need to attract genuine capital into the country; talent, work ethic, skills, etc. We could do that by allowing genuine capitalism in the US including and especially in money creation. That would require the abolition of the government backed banking cartel which created the mess in the first place. Ellen Brown would have the government create interest free legal tender but I prefer free market solutions such as common stock as money and government monies that are legal tender for only government debts. If we wish to out comptete the world, which has adopted pseudo-capitalism, then we need to move on to the real thing.

I personally think that neo-Keynesianism does a better job with that aspect of this.

It shows that the world is not as black and white as many wish to believe.

I agree with you here. It was the first step toward getting us off of the gold standard, which was one of the best things that could have happened for the US economy.

it shows you how the monetary system actually works as opposed to these myths

MMT shows us how the financial accounting works. But it provides a horribly misleading analysis with respect to how real-world market value is determined. Give MMT an inch (acknowledge that it does well with the accounting practice), and it takes a mile (assumes that accounting practice matches the real world practice of how markets determine the price of money, and the nasty implications if the markets decide that they don’t like what they see.)

TPC, thanks for keeping it going! Not sure I exactly understand what you are talking about w/ MMT and chartalism, but I may eventually get it thru my old school head.

Totally agree that there is an shortage of demand to borrow, at least at mutually agreeable terms. There seems to be a marked unwillingness of banks to lend, as well, preferring to add to their cash reserves (yeah, I’d like that too!).

And so, the private sector deleverages…but how the heck DO we keep Americans working productively, (and relatively happily) during this process of deleveraging?

That should be the focus for the Feds. It’s the jobs, stupid!

FBeard…while it sounds tempting, and more just, for the Fed to send money directly to households instead of filtering thru the bankers, how would your plan get people back to work, doing productive stuff? I get already that it would incent them to buy flat screen TVs and such, but those are largely made outside the US.