Exploring mainly Heterodox Economics, Monetary Reform, Environmental Sustainability, and relevant Emerging Climate ChangeTechnologies. It is a resource of Internet articles, and also promotes awareness of a futuristic modern universal Paradigm known as TFE, or Transfinancial Economics which is arguably the most advanced, and most "scientific" form of Economics in the world. Modern Monetary Theory( MMT) which is similar to TFE is far less advanced .
Elon Musk claimed 14 computers at the Department of Treasury and other government agencies just “send money out of nothing” during a podcast appearance with Sen. Ted Cruz (R-Texas) on Monday. He appeared to be criticizing the government’s bookkeeping, though it’s worth noting the government can, in fact, print money at little to no cost.
Elon Musk said it’s “insane” the U.S. government has computers that can just “make money out of thin air.” Ever since America fully abandoned the gold standard in 1971, however, international finance has depended on just that.
Admittedly, it’s difficult to decipher what Musk was referencing when he talked about “magic money computers” at the Department of Treasury and other government agencies on a podcast appearance Monday with Sen. Ted Cruz (R-Texas). Musk’s comments came in a broader conversation about DOGE’s search for waste, fraud, and abuse in the federal government. The agency says it’s found $115 billion in savings, though a Fortuneanalysis suggests that figure is significantly overstated. Musk and Cruz discussed what they characterized as a complete breakdown in government bookkeeping.
“I think we found now 14 magic money computers,” Musk said. “They just send money out of nothing.”
Hedge fund and ETF manager Jay Hatfield, CEO of Infrastructure Capital Advisors, said theTeslaCEO may be suggesting that much of the government is not properly implementingdouble-entry accounting, where a financial transaction must have equal and opposite effects in at least two different accounts. That seems a bit hard to believe, Hatfield said, but he didn’t entirely discount the possibility.
“If it was a public company, it would be delisted immediately,” Musk said of the government. “It would fail its audit, and the officers of the company would be imprisoned.”
Both the Washington, D.C. offices of Cruz and the Treasury Department did not respond to a request for comment.
Meanwhile, others have suggested that Musk may be expressing bewilderment about how the U.S. government can, in essence, issue money to pay for its own spending. Cruz and retired Republican Kentucky Sen. Ron Paul have long argued the government basically taxes its citizens without representation by issuing currency and causing inflation.
“Any computer which can just make money out of thin air,” Musk said, “that’s magic money.”
David Andolfatto, a former senior VP at the Federal Reserve Bank of St. Louis, said that language is a red herring. Banks effectively do the same when they lend out deposits, he said, or when a corporation like Musk’s Tesla issues more shares, diluting the value of existing holdings.
“What Musk was probably trying to communicate was that the resources devoted to these agencies, they’re not being properly audited, or there’s not proper oversight,” said Andolfatto, who now chairs the University of Miami’s economics department. “That may be true or false, I don’t know, but the fact that the government can print money out of thin air is neither here nor there.”
How the U.S. prints money
The government, of course, can do just that, whether or not Musk was referring to money creation. Former Fed chair Ben Bernanke explained this concept during a famous speech to the National Economists Club in 2002. The U.S. dollar, he said, was valuable only in that it is strictly limited in supply.
“But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost,” Bernanke said in his address. “By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.”
While the Treasury oversees the printing of bills and minting of coins, it is the Fed that creates money in practice by buying assets—traditionally Treasuries—from commercial banks, which receive a cash injection as a result. Banks then create credit by lending some of that cash out.
But, as Bernanke acknowledged, this increase in the money supply can be inflationary. In an extreme situation, the government may be tempted to excessively issue currency to help pay down its debts, inducing the type of hyperinflation Germany endured after World War I, which is commonly attributed as a major cause of the rise of the Nazi Party.
The Fed doesn’t buy government debt from the Treasury directly, but it distributes its profits back to the government. Libertarians like Paul have alleged this dynamic leads to similar incentives. In his 2009 book End the Fed, Paul noted that a collection of goods and services worth $1 in 1913 cost $21 at the time of publication.
“Another way to look at this is from the perspective of the purchasing power of the dollar itself,” Paul wrote. “It has fallen to less than $0.05 of its 1913 value. We might say that the government and its banking cartel have together stolen $0.95 of every dollar as they have pursued a relentlessly inflationary policy.”
Andolfatto has acknowledged that inflation constitutes a tax on consumers. “Seigniorage revenue,” he noted in a 2011 blog post, “refers to the purchasing power the government creates through the act of creating new money.”
Still, he called Paul’s claim “preposterous.” The nation’s money stock in 1913 had indeed lost 95% of its value over the course of nearly a century. That was not the case, however, for a dollar issued more recently in, say, 2010.
“This 1913 money stock constitutes a tiny fraction of our total wealth,” Andolfatto wrote. Moreover, since it has been in circulation for almost 100 years (much of it held by banks themselves in the form of reserves), the loss in its purchasing power has been spread over countless individuals, agencies, and generations.”
Steve Keen the noted rebel economist regards System Dynamics as a highly credible approach towards the creation of a new economic paradigm. Ofcourse, Transfinancial Economics is far more advanced https://wiki.p2pfoundation.net/Transfinancial_Economics
Later, Forrester was a professor at the MIT Sloan School of Management, where he introduced the Forrester effect describing fluctuations in supply chains.[6] He has been credited as a founder of system dynamics, which deals with the simulation of interactions between objects in dynamic systems. After his initial efforts in industrial simulation, Forrester attempted to simulate urban dynamics and then world dynamics, developing a model with the Club of Rome along the lines of that popularized in The Limits to Growth. Today system dynamics is most often applied to research and consulting in organizations and other social systems.[3]
Forrester was born on a farm near Anselmo, Nebraska, where "his early interest in electricity was spurred, perhaps, by the fact that the ranch had none. While in high school, he built a wind-driven, 12-volt electrical system using old car parts—it gave the ranch its first electric power."[7]
During the late 1940s and early 50s, Forrester continued research in electrical and computer engineering at MIT, heading the Whirlwind project.[8] Trying to design an aircraft simulator, the group moved away from an initial analog design to develop a digital computer.[3] As a key part of this design, Forrester perfected and patented multi-dimensional addressable magnetic-core memory,[9] the forerunner of today's RAM. In 1948-49 the Whirlwind team created the first animation in the history of computer graphics, a "jumping ball" on an oscilloscope.[10] Whirlwind began operation in 1951, the first digital computer to operate in real time and to use video displays for output. It subsequently evolved into the air defence system Semi-Automatic Ground Environment (SAGE).[3]
Forrester was invited to join the board of Digital Equipment Corporation by Ken Olsen in 1957, and advised the early company on management science. He left before 1966 due to changes in DEC to a product line led organisation. [11]
In 1956, Forrester moved to the MIT Sloan School of Management as Germeshausen professor. After his retirement, he continued until 1989 as Professor Emeritus and Senior Lecturer. In 1961 he published his seminal book, Industrial Dynamics, the first work in the field of System Dynamics. The work resulted from analyzing the operations of Sprague Electric in Massachusetts. The study was the first model of supply chains, showing in this case that inventory fluctuations were not due to external factors as thought, but rather to internal corporate dynamics that his continuous modelling approach could detect.[8] The phenomenon, originally called the Forrester effect, is today more frequently described as the "bullwhip effect".[12]
Forrester was the founder of system dynamics, which deals with the simulation of interactions between objects in dynamic systems. Industrial Dynamics was the first book Forrester wrote using system dynamics to analyze industrial business cycles. Several years later, interactions with former Boston MayorJohn F. Collins led Forrester to write Urban Dynamics, which sparked an ongoing debate on the feasibility of modeling broader social problems.[citation needed] The book went on to influence the video game SimCity.[13]
Forrester's 1971 paper 'Counterintuitive Behavior of Social Systems' argued that the use of computerized system models to inform social policy was superior to simple debate, both in generating insight into the root causes of problems and in understanding the likely effects of proposed solutions. He characterized normal debate and discussion as being dominated by inexact mental models:
The mental model is fuzzy. It is incomplete. It is imprecisely stated. Furthermore, within one individual, a mental model changes with time and even during the flow of a single conversation. The human mind assembles a few relationships to fit the context of a discussion. As the subject shifts so does the model. When only a single topic is being discussed, each participant in a conversation employs a different mental model to interpret the subject. Fundamental assumptions differ but are never brought into the open. Goals are different and are left unstated. It is little wonder that compromise takes so long. And it is not surprising that consensus leads to laws and programs that fail in their objectives or produce new difficulties greater than those that have been relieved.[14]
The paper summarized the results of a previous study on the system dynamics governing the economies of urban centers, which showed "how industry, housing, and people interact with each other as a city grows and decays." The study's findings, presented more fully in Forrester's 1969 book Urban Dynamics, suggested that the root cause of depressed economic conditions was a shortage of job opportunities relative to the population level, and that the most popular solutions proposed at the time (e.g. increasing low-income housing availability, or reducing real estate taxes) counter-intuitively would worsen the situation by increasing this relative shortage. The paper further argued that measures to reduce the shortage—such as converting land use from housing to industry, or increasing real estate taxes to spur property redevelopment—would be similarly counter-effective.[15]
'Counterintuitive Behavior of Social Systems' also sketched a model of world dynamics that correlated population, food production, industrial development, pollution, availability of natural resources, and quality of life, and attempted future projections of those values under various assumptions. Forrester presented this model more fully in his 1971 book World Dynamics, notable for serving as the initial basis for the World3 model used by Donella and Dennis Meadows in their popular 1972 book The Limits to Growth.
Forrester met Aurelio Peccei, a founder of the Club of Rome in 1970.[16] He later met with the Club of Rome to discuss issues surrounding global sustainability; the book World Dynamics followed. World Dynamics took on modeling the complex interactions of the world economy, population and ecology, which was controversial (see also Donella Meadows and The Limits to Growth). It was the start of the field of global modeling.[8] Forrester continued working in applications of system dynamics and promoting its use in education.
In 1972, Forrester received the IEEE Medal of Honor, IEEEs highest award.[17] In 1982, he received the IEEE Computer Pioneer Award.[18] In 1995, he was made a Fellow[19] of the Computer History Museum "for his perfecting of core memory technology into a practical computer memory device; for fundamental contributions to early computer systems design and development". In 2006, he was inducted into the Operational Research Hall of Fame.
1975. Collected Papers of Jay W. Forrester. Pegasus Communications.
His articles and papers include:
1958. 'Industrial Dynamics – A Major Breakthrough for Decision Makers', Harvard Business Review, Vol. 36, No. 4, pp. 37–66.
1968, 'Market Growth as Influenced by Capital Investment', Industrial Management Review, Vol. IX, No. 2, Winter 1968.
1971, 'Counterintuitive Behavior of Social Systems', Theory and Decision, Vol. 2, December 1971, pp. 109–140. Also available online.
1989, 'The Beginning of System Dynamics'. Banquet Talk at the international meeting of the System Dynamics Society, Stuttgart, Germany, July 13, 1989. MIT System Dynamics Group Memo D.
1992, 'System Dynamics and Learner-Centered-Learning in Kindergarten through 12th Grade Education.'
1993, 'System Dynamics and the Lessons of 35 Years', in Kenyon B. Greene (ed.) A Systems-Based Approach to Policymaking, New York: Springer, pp. 199–240.
1996, 'System Dynamics and K–12 Teachers: a lecture at the University of Virginia School of Education'.
1998, 'Designing the Future'. Lecture at Universidad de Sevilla, December 15, 1998.
1999, 'System Dynamics: the Foundation Under Systems Thinking'. Cambridge, MA: Sloan School of Management.
2016, 'Learning through System Dynamics as preparation for the 21st Century', System Dynamics Review, Vol. 32, pp. 187–203.
^The ultimate entrepreneur: the story of Ken Olsen and the Digital Equipment Corporation by Glenn Rifkin, chapters 4 to 8.
^Lee; Padmanabhan; Zhang (April 15, 1997). "The Bullwhip Effect in Supply Chains". MIT Sloan Review of Management (Spring 1997). Retrieved November 24, 2015.
Jay Wright Forrester Papers, MC 439, box X. Massachusetts Institute of Technology, Institute Archives and Special Collections, Cambridge, Massachusetts.
