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There are two kinds of austerity: money austerity and resource austerity.

Resource austerity would mean to take into account the limits to growth arguments and pay the true cost of resource luxuries. Resource austerity also means more more room for jobs. It also means money inflation.

Money austerity comes from believing money is a real thing that is neither created nor destroyed, only conserved, instead of a consensual token. It is ridiculous that there are both human and physical resources (I'm referring to plant, not raw materials) going idle because of lack of fiat tokens. But that is the situation, and attemting to economize on tokens is only going to result in greater capacity underutilisation. The hoarders of tokens will keep their hoard and may even succeed in safeguarding the exchange value of their hoard, but not only will resource overuse not be checked, but there will be an economic slump. But at least there won't be inflation.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun Jun 6th, 2010 at 10:39:56 AM EST
[ Parent ]
Migeru:
There are two kinds of austerity: money austerity and resource austerity.

Correct.

There may well be shortages - and hence a need for austerity - of 'money's worth'.

For instance land/location - which is the basis of more than two thirds of money in existence - is limited, and so are non-renewable resources of all kinds. In most countries land distribution is pretty 'austere' already, since a tiny proportion of the population owns most of it.

But in fact there can no more be a shortage of money than there can be a shortage of kilogrammes or metres.

It is only because we choose to use bank IOUs/credit objects/fiat tokens as 'money' - I prefer to call these monetary objects 'currency' - which means that there is a shortage of 'money'.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Jun 6th, 2010 at 11:03:44 AM EST
[ Parent ]
But in fact there can no more be a shortage of money than there can be a shortage of kilogrammes or metres.

But the insidious reality is that such a shortage of money can lead to people not being able to work exclusively on the basis of lack of money. It's as if you couldn't buy groceries at the market because the merchant has run out of kilogrammes.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun Jun 6th, 2010 at 11:17:17 AM EST
[ Parent ]
Exactly.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Sun Jun 6th, 2010 at 11:31:45 AM EST
[ Parent ]
From the little I've read, they are concerned with inflation - having to lug wheelbarrows of money to the grocer - not deflation - having no money.

How they expect to receive their stream of compounded interest payments from the unemployed is beyond me, but that seems to be their concern.


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Jun 6th, 2010 at 12:13:34 PM EST
[ Parent ]
When they can't get the interest payments they'll set up debtors' prisons. Since they can create money by extending loans to each other, they can monetize the future hard labour at these debtors' prisons in order to pay themselves the interest they're due.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Sun Jun 6th, 2010 at 12:19:54 PM EST
[ Parent ]

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