Money is not a scarce resource. The real issue is to produce the correct budget allocation to incerase production.

[Mexicano]

One of the aspects of fiat money is that it is created by decree by financial institutions ( the fed and the banks).
They simply record an asset ( the loan) and a liability ( the deposit ) in their balance sheets.
The same happens with the central bank.
Since it is just a record, in the balance sheets of financial institutions the key point is how to spend it.
Handouts might help alleviate poverty, however they do not increase production. In order to increase production countries need an industrial policy and national security policy: what industries have to be developed? Where will job allocation occur? what are the measures that have to be taken to protect the industries we seek to develop? Which resources are at risk ( e.g water in the southwest)? What measures have to be taken to protect those resources?

 

[1srelluc]

Sigh, the first victim is always paragraphs, and in this case bullet points took a hit too.

 

[Toddsterpatriot]

One of the aspects of fiat money is that it is created by decree by financial institutions ( the fed and the banks).
They simply record an asset ( the loan) and a liability ( the deposit ) in their balance sheets.
The same happens with the central bank.
Since it is just a record, in the balance sheets of financial institutions the key point is how to spend it.
Handouts might help alleviate poverty, however they do not increase production. In order to increase production countries need an industrial policy and national security policy: what industries have to be developed? Where will job allocation occur? what are the measures that have to be taken to protect the industries we seek to develop? Which resources are at risk ( e.g water in the southwest)? What measures have to be taken to protect those resources?

In order to increase production countries need an industrial policy

It worked for the Soviet Union. That's why they have the largest economy in the world.

 

[Tom Paine 1949]

Actually, “industrial policy” worked quite well in the U.S. during WWII, in Japan in the late 19th century, and among the “Asian Tigers” after WWII. The U.S. was protectionist toward its own industry throughout most of its industrial rise. Even the Marshall Plan loans and the first all-European agreements after WWII depended on conscious planning of industry and funding of investment.

Nations’ historical experiences and situations are not all or always the same. But every large nation or region with a great territory must develop a reasonably cohesive political system, and develop a competent political class to administer the state, resolve internal social conflicts and build necessary economic infrastructure for future national development. Otherwise it will be carved up and destroyed, as China almost was in the 19th century.

This may require having an independent — protectionist or mercantilist — national industrial (or even national agricultural) policy. Outside imperialist powers often want such countries to stay weak, and internal elites are often “bought off” by foreign interests when a more appropriate economic policy might better and more quickly develop the nation.

But the truth is today world markets are usually determining, so “industrial policy” cannot be beneficial if it is not realistic and open to change. A rich mix of capitalist private corporations and an entrepreneurial small business culture tends to be exceptionally good at adjusting to foreign market changes … compared to typical government bureaucracies.

The Soviet Union’s Stalinist and Chinese Communist Party’s Maoist experiments with centralized “Industrial Policy” were obviously much more problematic and highly oppressive, but even they, amid disastrous “Great Leap Backward” and “forced collectivization” disasters, did have some economic successes. Today’s Russian “gangster / oligarch” capitalism — becoming “gangster / security state” capitalism — has left the Russian people worse off than they were under the old planned socialist economy.

Giant Chinese profit-seeking corporations and an exceptionally hard-working, entrepreneurial population — now ever-more-firmly guided by Chinese Communist Party “industrial policy” — were in the past remarkably successful in developing that country.

In general in wartime, all countries are usually forced to introduce aspects of “industrial policy” and industrial planning, if only in their weapons industries.

P.S. For most countries and most people in the world, “money” and capital are absolutely scarce and hard-to-get resources. I think the age of cheap or free credit and “Quantitative Easing” is coming to an end even here in the U.S.A. “Modern Monetary Theory” was an interesting thought experiment, but in the real world it is in the long run a recipe for disaster.

 

[Woodznutz]

One of the aspects of fiat money is that it is created by decree by financial institutions ( the fed and the banks).
They simply record an asset ( the loan) and a liability ( the deposit ) in their balance sheets.
The same happens with the central bank.
Since it is just a record, in the balance sheets of financial institutions the key point is how to spend it.
Handouts might help alleviate poverty, however they do not increase production. In order to increase production countries need an industrial policy and national security policy: what industries have to be developed? Where will job allocation occur? what are the measures that have to be taken to protect the industries we seek to develop? Which resources are at risk ( e.g water in the southwest)? What measures have to be taken to protect those resources?

Politicians and economists always want to 'rev' the economic engine. They hate to see it 'idling' although sometimes it's best.

 

[Mexicano]

Actually, “industrial policy” worked quite well in the U.S. during WWII, in Japan in the late 19th century, and among the “Asian Tigers” after WWII. The U.S. was protectionist toward its own industry throughout most of its industrial rise. Even the Marshall Plan loans and the first all-European agreements after WWII depended on conscious planning of industry and funding of investment.

Nations’ historical experiences and situations are not all or always the same. But every large nation or region with a great territory must develop a reasonably cohesive political system, and develop a competent political class to administer the state, resolve internal social conflicts and build necessary economic infrastructure for future national development. Otherwise it will be carved up and destroyed, as China almost was in the 19th century.

This may require having an independent — protectionist or mercantilist — national industrial (or even national agricultural) policy. Outside imperialist powers often want such countries to stay weak, and internal elites are often “bought off” by foreign interests when a more appropriate economic policy might better and more quickly develop the nation.

But the truth is today world markets are usually determining, so “industrial policy” cannot be beneficial if it is not realistic and open to change. A rich mix of capitalist private corporations and an entrepreneurial small business culture tends to be exceptionally good at adjusting to foreign market changes … compared to typical government bureaucracies.

The Soviet Union’s Stalinist and Chinese Communist Party’s Maoist experiments with centralized “Industrial Policy” were obviously much more problematic and highly oppressive, but even they, amid disastrous “Great Leap Backward” and “forced collectivization” disasters, did have some economic successes. Today’s Russian “gangster / oligarch” capitalism — becoming “gangster / security state” capitalism — has left the Russian people worse off than they were under the old planned socialist economy.

Giant Chinese profit-seeking corporations and an exceptionally hard-working, entrepreneurial population — now ever-more-firmly guided by Chinese Communist Party “industrial policy” — were in the past remarkably successful in developing that country.

In general in wartime, all countries are usually forced to introduce aspects of “industrial policy” and industrial planning, if only in their weapons industries.

P.S. For most countries and most people in the world, “money” and capital are absolutely scarce and hard-to-get resources. I think the age of cheap or free credit and “Quantitative Easing” is coming to an end even here in the U.S.A. “Modern Monetary Theory” was an interesting thought experiment, but in the real world it is in the long run a recipe for disaster.

Well, no.
Money is just a record in financial institutions. Even more, governments have a monopoly on the issue of currency.
During the 2007 crisis, the Fed swapped bonds for MBS. They simply created the bonds, no taxpayer money was used for the transaction.
When banks issue a loan they simply record an asset ( the credit ) and a liability ( the deposit in the debtor's account) . At the end of the month they check if they have enough reserves. If they don't they borrow reserves from the FED or borrow them from another bank that has excess reserves.

 

[Leo123]

One of the aspects of fiat money is that it is created by decree by financial institutions ( the fed and the banks).
They simply record an asset ( the loan) and a liability ( the deposit ) in their balance sheets.
The same happens with the central bank.
Since it is just a record, in the balance sheets of financial institutions the key point is how to spend it.
Handouts might help alleviate poverty, however they do not increase production. In order to increase production countries need an industrial policy and national security policy: what industries have to be developed? Where will job allocation occur? what are the measures that have to be taken to protect the industries we seek to develop? Which resources are at risk ( e.g water in the southwest)? What measures have to be taken to protect those resources?

The value of Fiat money is determined by a population's faith in the issuer not on the intrinsic value of the trading token. The institutions that issue this money are regulated by the Federal Government which, in turn is guided by our elected representatives. Therefore, fiat money has only political value and encourages a powerful central government. Since 1971, in the U.S. one cannot get gold in trade for face value money.

 

[Mexicano]

The value of Fiat money is determined by a population's faith in the issuer not on the intrinsic value of the trading token. The institutions that issue this money are regulated by the Federal Government which, in turn is guided by our elected representatives. Therefore, fiat money has only political value and encourages a powerful central government. Since 1971, in the U.S. one cannot get gold in trade for face value money.

The value of money is determined by its demand. The demand comes from two sources
a) Taxes- you must use local currency to pay taxes
b) International trade - foreign agents need your currency to purchase goods.
It has nothing to do with "faith". Gold is scarce, but other than producing jewelry or highly conductive circuits has few industrial uses. Coupling currency to gold really means a boost for gold-mining companies. There is no way that gold production keeps pace with the wealth production of any industrialized nation.

 

[Toddsterpatriot]

Well, no.
Money is just a record in financial institutions. Even more, governments have a monopoly on the issue of currency.
During the 2007 crisis, the Fed swapped bonds for MBS. They simply created the bonds, no taxpayer money was used for the transaction.
When banks issue a loan they simply record an asset ( the credit ) and a liability ( the deposit in the debtor's account) . At the end of the month they check if they have enough reserves. If they don't they borrow reserves from the FED or borrow them from another bank that has excess reserves.

During the 2007 crisis, the Fed swapped bonds for MBS. They simply created the bonds, no taxpayer money was used for the transaction.

The Federal Reserve does not create bonds.

At the end of the month they check if they have enough reserves. If they don't they borrow reserves from the FED or borrow them from another bank that has excess reserves.

At the end of the DAY.

 

[Mexicano]

During the 2007 crisis, the Fed swapped bonds for MBS. They simply created the bonds, no taxpayer money was used for the transaction.

The Federal Reserve does not create bonds.

At the end of the month they check if they have enough reserves. If they don't they borrow reserves from the FED or borrow them from another bank that has excess reserves.

At the end of the DAY.

Ok, that was a shorthand... the FED creates reserves on the banks out of thin air an then uses those reserves to buy long-term treasuries. Happy now?

Reserves requirements are not checked on a daily basis
In the US the period was of 14 days . In 2020 the reserve requirement levels were dropped to zero.

Reverse Maintenance Period: What It is, How it Works

The reserve maintenance period is the time frame in which banks and other depository institutions must maintain a specified level of funds.

www.investopedia.com

In Europe the period is of 6 to 7 weeks.

What are minimum reserve requirements?

The European Central Bank (ECB) is the central bank of the European Union countries which have adopted the euro. Our main task is to maintain price stability in the euro area and so preserve the purchasing power of the single currency.

www.ecb.europa.eu

 

[Toddsterpatriot]

Ok, that was a shorthand... the FED creates reserves on the banks out of thin air an then uses those reserves to buy long-term treasuries. Happy now?

Reserves requirements are not checked on a daily basis
In the US the period was of 14 days . In 2020 the reserve requirement levels were dropped to zero.

Reverse Maintenance Period: What It is, How it Works

The reserve maintenance period is the time frame in which banks and other depository institutions must maintain a specified level of funds.

www.investopedia.com

In Europe the period is of 6 to 7 weeks.

What are minimum reserve requirements?

The European Central Bank (ECB) is the central bank of the European Union countries which have adopted the euro. Our main task is to maintain price stability in the euro area and so preserve the purchasing power of the single currency.

www.ecb.europa.eu

Ok, that was a shorthand... the FED creates reserves on the banks out of thin air an then uses those reserves to buy long-term treasuries.

Or short-term treasuries.

 

[Mexicano]

In order to increase production countries need an industrial policy

It worked for the Soviet Union. That's why they have the largest economy in the world.

Perchance you mean China? 40% of the economy is run by the state or state-owned companies and it provides 60% of the jobs.
The private sector makes up 60% of the economy .

There you go, mate:

China’s Global 500 companies are bigger than ever—and mostly state-owned

China’s state-owned enterprises enjoy massive government financial support, but several are still facing tough economic challenges.

fortune.com

 

[Toddsterpatriot]

Perchance you mean China? 40% of the economy is run by the state or state-owned companies and it provides 60% of the jobs.
The private sector makes up 60% of the economy .

There you go, mate:

China’s Global 500 companies are bigger than ever—and mostly state-owned

China’s state-owned enterprises enjoy massive government financial support, but several are still facing tough economic challenges.

fortune.com

The Soviet Union has had an industrial policy much longer than China.
That's why their economy is much bigger than China's, right?

 

[22lcidw]

Actually, “industrial policy” worked quite well in the U.S. during WWII, in Japan in the late 19th century, and among the “Asian Tigers” after WWII. The U.S. was protectionist toward its own industry throughout most of its industrial rise. Even the Marshall Plan loans and the first all-European agreements after WWII depended on conscious planning of industry and funding of investment.

Nations’ historical experiences and situations are not all or always the same. But every large nation or region with a great territory must develop a reasonably cohesive political system, and develop a competent political class to administer the state, resolve internal social conflicts and build necessary economic infrastructure for future national development. Otherwise it will be carved up and destroyed, as China almost was in the 19th century.

This may require having an independent — protectionist or mercantilist — national industrial (or even national agricultural) policy. Outside imperialist powers often want such countries to stay weak, and internal elites are often “bought off” by foreign interests when a more appropriate economic policy might better and more quickly develop the nation.

But the truth is today world markets are usually determining, so “industrial policy” cannot be beneficial if it is not realistic and open to change. A rich mix of capitalist private corporations and an entrepreneurial small business culture tends to be exceptionally good at adjusting to foreign market changes … compared to typical government bureaucracies.

The Soviet Union’s Stalinist and Chinese Communist Party’s Maoist experiments with centralized “Industrial Policy” were obviously much more problematic and highly oppressive, but even they, amid disastrous “Great Leap Backward” and “forced collectivization” disasters, did have some economic successes. Today’s Russian “gangster / oligarch” capitalism — becoming “gangster / security state” capitalism — has left the Russian people worse off than they were under the old planned socialist economy.

Giant Chinese profit-seeking corporations and an exceptionally hard-working, entrepreneurial population — now ever-more-firmly guided by Chinese Communist Party “industrial policy” — were in the past remarkably successful in developing that country.

In general in wartime, all countries are usually forced to introduce aspects of “industrial policy” and industrial planning, if only in their weapons industries.

P.S. For most countries and most people in the world, “money” and capital are absolutely scarce and hard-to-get resources. I think the age of cheap or free credit and “Quantitative Easing” is coming to an end even here in the U.S.A. “Modern Monetary Theory” was an interesting thought experiment, but in the real world it is in the long run a recipe for disaster.

The Soviet Union had woeful internal infrastructure. Transporting food and goods was a problem. We have had great migrations of our citizens. The demise of industrial might has hurt many areas as one example and the taxation oppressive to a percentage of the population in states has caused migration is another.

 

[Mexicano]

The Soviet Union has had an industrial policy much longer than China.
That's why their economy is much bigger than China's, right?

Well , it turns out the US had an industrial policy long before Lenin was born .

Industrial Revolutionaries

To understand how to revitalize our economy, you only have to look back to the founders.

prospect.org

 

[Toddsterpatriot]

Well , it turns out the US had an industrial policy long before Lenin was born .

Industrial Revolutionaries

To understand how to revitalize our economy, you only have to look back to the founders.

prospect.org

Did our 5-year plans work better than Lenin's?

 

[Mexicano]

Did our 5-year plans work better than Lenin's?

I fail to see the point you are trying to make. No one is defending Lenin.

 

[Toddsterpatriot]

I fail to see the point you are trying to make. No one is defending Lenin.

Not Lenin, his 5-year plans.

How'd they work out?

 

[Mexicano]

Not Lenin, his 5-year plans.

How'd they work out?

You are creating a straw man. The OP doesn't mention Lenin or the 5-year plans. However, it addresses the need for "an industrial policy and national security policy".
Something the US had in the past, as described in the article below.

Industrial Revolutionaries

To understand how to revitalize our economy, you only have to look back to the founders.

prospect.org