The Lies of Monetary Policies

I would say monetary policy is one of the most misunderstood aspects of our society. I don't claim to understand it all, but I (think I) know enough to understand the low-hanging fruits of it all.

The 1st lie the politicians tell us is that the government budget is like a household budget. In our own lives, we have jobs which bring us income, and we use that money to buy things, and we can't maintain a deficit balance in our budget for very long or we get into trouble. A government with it's own currency as we have in AU or US does not operate the same way. A government with its own currency can never run out of funds. It's not like household budgets. It always has the funds since the govt is the entity that creates the money.

The 2nd lie they tell us is that our taxes pay for the government programs. Taxes don't. The govt creates money for a program say like NDIS and spends it, before taxes come in, by crediting the bank accounts of citizens, disability organisations, etc. What taxes do is they destroy the created money... by the citizens, disability organisations, etc giving the money back to the govt (in the form of taxes) thus debiting their accounts, and destroying the money. Nowhere in this process are the taxes funding the programs.

The 3rd lie they tell us is that deficits are bad. They are only bad if they result in undue inflation. In fact, the opposite is true; surpluses are bad. Let's look at a surplus. The government spends $90, and the people pay $100 back to the govt in the form of taxes. So the govt has a $10 surplus. But the people have $10 less money to do things. That's bad. If the people have less money to provide services/products/etc, then the economy can become recessive. Conversely, if the govt spends $100 and gets back $90 in taxes, thus operating in a deficit, then the people have a surplus of $10 so they can invest, start new businesses, etc. The only problem, as I stated, is inflation.

So the politicians tell us that deficits rob the future generations by forcing them, in the form of increased taxes, to pay back all this currency debt. They don't. They tell us they can't afford certain expenditures, etc based on current tax revenue. They always can. They may decide expenditures would be unduly inflationary so they don't do them, but they can always create the funds.

It's all lies, convenient lies, but still lies nonetheless.

UBI works. Here's proof.

This extensive study of UBI in Kenya is so chockful of good news that it's difficult to summarise it.

The money was paid-out either as a lump sum, or per-month, and of course there was a control group of people who were not paid at all.

The result is the people who were paid in a lump sum, substantially outperformed the other groups. And this makes sense, since they had the capital to start substantive businesses. And what was so amazing was the people who were paid per month, banded together to form savings clubs which allowed them to take turns in getting larger lump sums to create bigger businesses.

And inflation didn't rear it's ugly head because people were buying across a wide range of products.

It clearly showcases the inherent cooperative, connective, and intelligent nature of our communities.

https://www.npr.org/sections/goatsandsoda/2023/12/07/1217478771/its-one-of-the-biggest-experiments-in-fighting-global-poverty-now-the-results-ar

Work, you proles, work.

This is on us. Not the politicians, not the billionaires. Us. The consumers of the developed nations. We have raped Mother Earth dry in the pursuit of our trinkets which we use as placebos in our artificial quest for self-worth.

We have allowed ourselves to be transfixed by the self-interests of the corporations, who sit there in their ivory towers, smoking their fat cigars and drinking their Hennessy, laughing at us as the psychology of their childish marketing tricks works it's magic on the mindless proles. I always return to the lipstick ad showing a beautiful woman with bright-red sensual lips with the tagline: "Say goodbye to boring lips". Must. Buy. That. Lipstick. The mind screams.

We have allowed ourselves to be transfixed by the promised Valhalla of 'economic growth' as both parents need to spend their best hours working to survive now with their mortgages and car loans taking the bulk of their salaries, all the while destroying the family and promoting individualism to create jaw-dropping statistics like, by 2030, 40% of women between 22-45 will be single and childless. Work, you proles, work. Don't save, you proles, spend spend spend.

And look what we have done. We have traded our freedoms for trinkets. And for what? Here's a question for you: Our real wages in 2023 are equivalent to what year in the past? How does 2008 sound? And our wage growth has been considerably less than the labour productivity gains for each of the last 22 years. We've been spinning our wheels for over 20 years. And it's purely our fault.

We have lost ourselves, and in doing so have allowed others to determine our own fates.

https://www.theguardian.com/environment/2023/nov/20/world-facing-hellish-3c-of-climate-heating-un-warns-before-cop28

A better system: Punishment for crimes without prison time

 

Here's a thought experiment. I've long thought about the concept of incarceration. It seems like it sort-of works because it denies something very valuable for people: their freedom. But is it the best system for societal punishment? Especially when considered along side the goal of rehabilitation (since 99.9999% of the incarcerated are ultimately released) and reducing recidivism.

Here's another method for societal punishment. You are convicted and you are not put into prison. In fact, your life continues as it has; you still go to your job, live with family, etc etc. But each day you are given a 1 minute session of pain at 6PM. The intensity of the pain is commensurate with the severity of the crime. Obviously, a murderer would have a significantly stronger pain setting than someone who commits fraud. And someone who commits fraud, and then re-offends, will have an increased pain intensity.

I think that psychologically this would be very difficult to deal with; knowing that every day at 6PM, you will be subject to pain. You would start to dread the experience, and the anticipation of such daily pain would be absolute misery. Especially coupled with the threat that additional offences would result in harsher pain.

Now this might be deemed as barbaric, yet I can't think of a more barbaric punishment than being forcibly enclosed in a caged environment amongst violence, gangs, not seeing loved ones, etc.

So would this system produce the desired outcome? A punishment for their crimes and the incentive not to re-offend, without the loss of freedom?

The Voice Vote. Go ahead - write your little 'No'

Tomorrow is the Voice vote for the First People. All indications are that the 'Yes' vote will lose with only 41.5% support nationally.

It's just a shame. To me, it's a clear indication of the tyranny of the majority, and even worse, how systemic racism continues it's inertia within a society who would individually react angrily to even the suggestion of racism. Yet here we are. A country of plenty, who celebrate our Federation Day amid the protests of the indigenous, and look at the flagpoles with 2 separate flags without a hint of concern, and turn a blind eye to the facts such as the indigenous representing 2% of the population yet 40% of the incarcerated.

So go ahead. Write your little 'No' in the required spot. Accept that you have been fleeced by the misinformation and propaganda from the conservative/religious communities (as outlined in the linked article). Accept that you have been tainted by the same ugly doctrines that the conservatives/religious are using in the US to remove the guilt of past transgressions with respect to the African-Americans. We must 'move on from race' so they say. Accept that you have no ideas at all about how we better integrate our society. Accept that you don't want things to change.

Just accept that you don't give a damn. And why would you? You like society as it is. This is the lucky country after all; a country which has been systemically reconstructed with you in mind. 

So go ahead... write your little 'No'. Tomorrow will be just as good for you as today.

https://www.theguardian.com/australia-news/2023/oct/13/revealed-the-secretive-rightwing-firm-providing-clout-for-voice-no-campaign

Why doesn't Australia have Citizens Initiated Referenda (CIR)?

 

Why doesn't Australia have Citizens Initiated Referenda (CIR)?

In the US, many States have Citizens Initiated Referenda (CIR) which allows citizens to have the power of direct governance in things like repealing/enacting laws, recalling 'bad' politicians, etc. The citizens can garner enough signatures to (metaphorically) force these issues upon the legislatures.

Currently, Australia does not have this capability. The linked document talks of the discussions Queensland had about this issue. As the article discusses, one of the strongest arguments against CIR is that it allows the majority to force their views to the detriment of the minority. The logic is that the politicians must, at times, "make decisions which are contrary to popular prejudice".

Once again, we see that society is run by 'theory' and not by 'practice'. This may be an argument in theory, but in practice it is null and void. You only have to look at the same-sex marriage (SSM) debate for a clear indication that this fear is completely unfounded, and actually shows the complete opposite of their argument. The gay/trans community is estimated to be 5% of society. The politicians cowardly refused to enact SSM due to the power and favours-owed to the religious organisations. It took a national referendum for this 5% minority to gain the simple freedoms given to everyone else. A CIR would have been the perfect avenue for this issue.

Another example of the positivity of CIRs is the war on drugs. The efforts and success of regulating cannabis in the US came from CIRs, initially Colorado, which legalised cannabis in 2016, creating considerable tax revenue, reduced the consumption of alcohol and opiates,  and other benefits such as a place where long-suffering kids with epilepsy could get treatment. 13% of people within Colorado consume cannabis so it is a clear minority.

So I fail to see where the politicians have created legislation to the detriment of the majority. Today's politicians rarely exhibit this type of 'courage' since it would be harmful to their reelection prospects. CIRs would allow for long-term changes in society as opposed to the current short-term 3 year cycle of electing politicians.

And the minority does have the ability to act using CIRs. In most US States, the threshold to start the CIR process in only usually somewhere between 2 and 10%. So 2% of the citizens can start a CIR process, and as exposure to the issue increases, many citizens may 'jump onboard' that issue. I would think that if Australia had CIRs, the issue of doctor-assisted suicide, which would affect a tiny minority of citizens would be an issue that would garner tremendous support as it moved through the CIR process.

But any process that allows for a more aware and energised populace cannot be a negative thing to society. Perhaps we should have a CIR to allow CIRs in Australia?

https://documents.parliament.qld.gov.au/explore/ResearchPublications/researchBulletins/rb0198hg.pdf

As a child, a Mars bar cost me 10c. Why am I better off now?

 

I remember when chocolate bars cost 10c and were bigger than today. I vividly remember pumping petrol into the car when it was 35c a gallon (7.7c per litre). Did the farmers who harvested the chocolate/milk/etc, the company that produced the chocolate bar, the trucks that transported the bar to the store, and the store itself not make money on that bar? Of course they did.

So why is this bar now $2.20? Or a better question: are we better-off now that a chocolate bar has risen in price 2,200% in 50 years?

We would be better off if:

  1) Wages increased more than costs. But this is not the case.

...or...

  2) Quality-of-life increased faster due to costs increasing. And I can't see any logic in this hypothesis. Inventors don't invent something for wealth principally because no one knows how anything will turn out. Quantum physics was discovered when a dinner cost 20c. If I invented something and made $100K/year so that I could quit my job and work on this full-time, I would certainly do it. Doesn't have to make me millions.

Also, innovation which leads to increased quality-of-life is a deflationary effect; it reduces prices. Look at TVs; you can buy a massive TV now for only $1,500. And the vast majority of people don't want to be rich; they just want to be financially comfortable so that they don't have to worry about money.

But the key is that someone has to be benefiting from this cost inflation. It certainly isn't me. If chocolate bars were 10c still, my house would be only worth $100K. Would I care? No, why would I? I would fill my petrol tank for $3.50, and my food trolley for $15.

If anyone can tell me why I am better off from the days where a Mars bar costs 10c, I'm all ears.