Monday, 7 January 2013
A Champion of Monetary Reform, and Functional Finance
From Wikipedia, the free encyclopedia
John Gelles of Ventura California is a money system reform advocate. His domain [] discusses money and how to improve its record as an element of a monetary system of production to end poverty, create individual economic rights, and promote economic success at the national and global level. He calls for use of a debt-free, tax-free, fiat money supplement to money created by bank loans within the United States.
One would think that any nation could end poverty within its borders if it had money enough to guarantee a good job or self-employment for all its poor people. Yet this cannot happen unless the money used for this purpose can buy what people need. Money without sufficient buying power will be the unhappy result if jobs and self-employment fail to produce for sale the things we need.
Congress has the power to create money free of debt and the obligation to create money free of the risk of hyper-inflation.
How to understand and explain why money fails to work to end poverty is extremely difficult. A great deal of writing on the web and in libraries attempts to do it. Most of the writing, however, suggests that money is for trade and not for ending poverty. Certainly money does work well for trade -- but it has not yet ended poverty and we all suffer from this fact.
John Gelles is a retired lawyer, accountant, teacher, and systems analyst. He is inspired by the economic ideas of Abba Lerner and Maynard Keynes.
Lerner, in defining functional finance, noted that the power of governments to spend money was constrained by money's ability to buy and the economy's ability to produce: thus total production and government spending to maintain its desired effect are primary in this view of free enterprise; and taxation is unnecessary except to prevent hyper-inflation.
This is an extension of the Keynesian doctrine that money is not an impotent element in a monetaty system of production. The prevention of hyper-inflation via maximum production and minimum taxation can today be facilitated by the revolution in computer science that has occurred in the post-Keynesian era.
The text above is from 2006. Now, in April 2010, it reads as sound prediciton of what was needed then and is sorely missed today. In his current prescription for recovery, John Gelles asks for inflation protected savings accounts (modeled on TIPS bonds) to allow higher government spending and lending to promote high priorty programs and projects (to bring peace as well as prosperity) over ordinary consumerism to drive economic revcovery. He also asks for a National Economic Security Agency (modeled on NSA) to facilitate production and domestic full employment, as support for skilled labor and fully automated manufacturing is encouraged -- countering wage differentials that may otherwise de-industrialize democratic nations. Free trade is not wanted. Industrial power is essential for national defense.