[GJM] Another Response on Inflation Controls.

[Zack Johnson]

 Robert, what is "simplistic" is your presumption
that government spending, which in Western
democracies comprises roughly half of all spending,
would not be inflationary if government continues
to spend but stops collecting taxes.  Here you admit
that it would be inflationary in the absence of
"effective controls."  The point is that with
government spending being half of all spending,
and the totality of transactions being roughly four
times the quantity of money, this would result in the
quantity of money doubling every six months--the
very definition of hyperinflation.  In such a situation
it is impossible to control inflation without directly
attacking its cause, that is, by stopping the spending
or beginning to tax enough to cover the spending. 
You can indeed impose controls to keep prices
down, but that puts monkey wrenches into the
works of the economy, because no one can be
forced to sell what he produces below his costs of
production.  So that stops the delivery of goods and
services to the point of retail, exactly what has
happened in Venezuela, which hasn't stopped
taxing--it's just that they are printing and spending
too much money not covered by taxes in that
unfortunate country in attempting to purchase
support for their "Bolivarian Revolution."  And they
have imposed controls.  So now there are shortages
of everything except oil in that oil rich country. 
And you take Venezuela's incompetent policy to its
theoretical extreme by proposing to stop all
taxation.  One wonders if it is possible to replace
the screw that is missing from the part of your brain
that is supposed to think logically.

I again ask why this list's moderator doesn't bar
your junk postings?  They have nothing to do with
and are quite contrary to the Binary Economics
favored by Rodney Shakespeare and the other
founders of this list. You've posted to hundreds of
lists over the Internet.  Typically, after one or two
posts, you're barred, because you're simply a Johnny
One Note.

You're stuff is most certainly not the work of
genius, despite your pitiable hubris.

Zack Johnson


  ----- Original Message -----
  From: "robert searle"
  To: discussion at globaljusticemovement.net
  Subject: Re: [GJM] Another Response on Inflation Controls.
  Date: Wed, 27 Feb 2008 16:46:57 +0000 (GMT)



  --- robert searle wrote:

  > Dear Mr Johnson,
  >
  > There are many unknowns in economics, and your
  > simplistic comments about how everything would
  > devolve
  > into hyperinflation, and lead to total devaluation
  > is
  > an example of this. Ofcourse, this would probably
  > happen if no effective controls existed...
  >
  > However, you are correct about price controls having
  > a
  > poor record.........BUT THEY DID NOT HAVE THE FULL
  > WEIGHT OF MODERN TECHNOLOGY TO ENSURE THAT THAT
  > PRICES
  > COULD BE CONTROLLED DIRECTLY, AND INSTANTANEOUSLY IN
  > A COMPREHENSIVE SUPER FLEXIBLE MANNER. This makes
  > COMPLIANCE EASY. Got it? And please try, and understand that MONEY
  IS
  > ELECTRONIC INFORMATION. As such it can be directly
  > controlled just as I can press a button on the
  > computer, and delete your dull repetative posts
  > INSTANTLY. If you do not like this Discussion Group you are
  > free
  > to unsubscribe.....and I also see that you are an
  > accountant which probably explains everything!!!! Robert Searle,.
  >
  >
  >
  > --- Zack Johnson
  > wrote:
  >
  > > In Western industrialized economies government
  > > spending is essentially half of all spending. What
  > > is
  > > counted as the money supply is the residuum of the
  > > spending by all sectors of the economy, and its
  > > reflux. The totality of transactions is a
  > multiple
  > > of
  > > the quantity of money when counted this way. Let's
  > > say the multiple is four in an economy where half
  > > the spending is by government. That means that,
  > if
  > > the government stops taxing but keeps spending,
  > the
  > > quantity of money will double every six months. It
  > > is absolutely impossible for there not to be
  > > hyperinflation in such a situation, despite the
  > > imposition of controls such as Mr. Searle
  > proposes:-
  > > > "With respect, I have tried to explain in simple
  > > English how an effective though admittedly
  > > unpopular approach (rather like taxation) would
  > > probably be vital in the initial introduction of a
  > > tax,
  > > and interest free economy. It would probably
  > > involve the electronic lowering of the Price
  > Ceiling
  > > so that any rapid price rises would be capped
  > > automatically. This process may be repeated
  > several
  > > times if necessary. Thus, in spite of any
  > > inflationary pressures businesses would have no
  > > choice but to lower their prices to certain levels
  > > or
  > > risk being fined out of existence in a very short
  > > period of time!! Yes, a 'draconian' measure if you
  > > will....like the non-payment of income taxation,
  > and
  > > the possibility of the jailhouse!"
  > > > There are literally hundreds of examples
  > throughout
  > > history where the authorities have tried to impose
  > > controls such as these, and every one of them has
  > > failed miserably--the most recent example being
  > > Venezuela, which has the highest rate of inflation
  > > in
  > > the Western Hemisphere. Yes, if sufficient
  > > penalties are imposed, businesses will lower their
  > > prices below their costs of production, but they
  > > also
  > > stop supplying goods and services. So this
  > > inherently rich oil-exporting country has
  > shortages
  > > of everything except oil.
  > > > With all due respect, Mr. Searle does not appear
  > to
  > > be very knowledgeable about how economies work,
  > > but rather appears to be an utter ignoramus.
  > > > Why is his junk tolerated on this list?
  > > > Zack Johnson
  > > Certified Public Accountant
  > > Monroe, Louisiana
  > > > ----- Original Message -----
  > > From: "robert searle"
  > > To: discussion at globaljusticemovement.net
  > > Subject: [GJM] Another Response on Inflation
  > > Controls.
  > > Date: Tue, 26 Feb 2008 13:36:04 +0000 (GMT)
  > > > > > Dear All,
  > > > Zack Johnson is at it again! Anyway, I will
  > > attempt the "impossible" by trying to satisfy
  > his
  > > questioning though his mind seems to be clearly
  > > set in
  > > "old paradigm" economics to use Rodneys
  > > expression.
  > > > > 1) It appears that his first query is how the
  > > inflation control system relates to Government.
  > > Ofcourse, this has been explained before...but
  > > never
  > > mind we shall do it once again!
  > > > The answer is this. The inflation control system
  > > should be separate from the Government if
  > desired.
  > > In
  > > other words, a private commercial company.
  > Indeed,
  > > it
  > > would probably be part of the banking system. It
  > > too
  > > like the FED is a business per se though it may
  > > give a
  > > false impression of being some kind of
  > > governmental
  > > organization.
  > > > Who though conducts inflation control
  > > policy....the
  > > private sector, or the government? It can be
  > > former,
  > > or a bit of both...It does not matter too much.
  > > What
  > > matters if whether the use of direct
  > > super-flexible
  > > controls allow things to run "well".
  > > > It should be noted that in the UK, and many
  > other
  > > countries the tax authorities have powers to
  > check
  > > private bank accounts. Similiarly, the inflation
  > > control agency connected with a democratic
  > > government
  > > could do likewise if absolutely necessary.
  > > > ii) With respect, I have tried to explain in
  > > simple
  > > English how an effective though admitedly
  > > unpopular
  > > approach (rather like taxation) would probably
  > be
  > > vital in the initial introduction of a tax, and
  > > interest free economy. It would probably involve
  > > the
  > > electronic lowering of the Price Ceiling so that
  > > any
  > > rapid price rises would be capped automatically.
  > > This
  > > process may be repeated several times if
  > > necessary....
  > > > Thus, in spite of any inflationary pressures
  > > businesses would have no choice but to lower
  > their
  > > prices to certain levels or risk being fined out
  > > of
  > > existence in a very short period of time!! Yes,
  > a
  > > "draconian" measure if you will....like the
  > > non-payment of income taxation, and the
  > > possibility of
  > > the jailhouse!
  > > > However, there would be special back-up with any
  > > businesses that get into trouble with the above.
  > > Yet,
  >
  === message truncated ===

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