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Re:Rewarding Neglect and Punishing Investment in Struggling ... by thaumasiotes on Thursday March 14, 2019 @02:32AM (#19386929)
> The government can create the raw dollars needed to fund the pensions.

Having the ability to mint fiat money doesn't mean you can pay for whatever you want. Costs adjust to the amount of money there is.

In the limit case, printing a very large amount of money is the same thing as imposing a 100% wealth tax. It will get you all the purchasing power there is to be gotten... but not more than that. (It will also pretty sharply reduce the absolute amount of purchasing power that "all the purchasing power there is" represents.)

Re:Rewarding Neglect and Punishing Investment in Struggling ... by dragonwriter on Thursday March 14, 2019 @03:07AM (#19387068)
> Having the ability to mint fiat money doesn't mean you can pay for whatever you want.

It actually does when talking about pre-existing obligations denominated in the currency. It doesn't when talking about most other things, but existing pension obligations are pre-existing dollar-denominated obligations.

Now, the feds monetizing all the underfunded state and local pensions would effectively devalue the dollar, so those pensioners (and everyone else on a fixed dollar-denominated income) would be getting far less than they expect for it, and taxing extra money out of the system to counteract the inflationary effect negates the whole idea of monetizing the obligation in the first place—you might as well just leave monetary policy alone and tax money out of the system to pay for the pensions.

Re:Rewarding Neglect and Punishing Investment in Struggling ... by thaumasiotes on Thursday March 14, 2019 @03:13AM (#19387091)
>> Having the ability to mint fiat money doesn't mean you can pay for whatever you want.

> It actually does when talking about pre-existing obligations denominated in the currency.

It still doesn't. It means you can default while calling the default "inflation". Doing so wipes out all other currency holders in addition to you, but it doesn't mean you met your obligations.

(This is basically the same thing as you're saying, but let's be clear about what it means.)

Re:Rewarding Neglect and Punishing Investment in Struggling ... by dragonwriter on Thursday March 14, 2019 @08:26AM (#19388566)
You're simply wrong: if the obligation is denominated in your currency, you absolutely do meet it: it's not any kind of default. Yes, the creditor gets less than they would have without the monetization, but that's not default, because currency value is expected to change over time and an obligation denominated in a currency accepts that variability by definition.
Re:Rewarding Neglect and Punishing Investment in Struggling ... by omegaworks on Thursday March 14, 2019 @05:13PM (#19393786)
>you might as well just leave monetary policy alone and tax money out of the system to pay for the pensions.

That's another potential solution. My point was that there are potentially many solutions that do not involve breaking our promises to working people.

Re:Rewarding Neglect and Punishing Investment in Struggling ... by omegaworks on Thursday March 14, 2019 @02:43AM (#19386965)
Your claim that inflation is inevitable is addressed by Greenspan in his response. "Too many dollars chasing too few goods" is what causes it. Governments can address that by progressively taxing money out of the system.

It is possible to actually pay workers what they've been promised and not cause an economic collapse. The issue is gathering the political will to do so.

Re:Rewarding Neglect and Punishing Investment in Struggling ... by AnimalMuppet on Thursday March 14, 2019 @01:21PM (#19391342)
"Taxing money out of the system" requires Congress to do so. Do you actually think Congress will have both the wisdom and the political will to do this right? I don't.

So under this scheme inflation is perhaps not inevitable, but it is almost certain given the dysfunctional mess that Congress is.

Re:Rewarding Neglect and Punishing Investment in Struggling ... by omegaworks on Thursday March 14, 2019 @05:14PM (#19393803)
Having Congress act is a part of gathering that political will. It usually requires altering popular perception of the possibilities that direct, mass action can result in.

As mentioned in other replies to this thread, there are many potential solutions for the so-called crisis that don't involve reneging on the promises we've made to workers.

Re:Rewarding Neglect and Punishing Investment in Struggling ... by AnimalMuppet on Thursday March 14, 2019 @05:43PM (#19394105)
You're never going to get the popular will to remove the money from the system, because removing the money from the system means removing it from people.
Re:Rewarding Neglect and Punishing Investment in Struggling ... by omegaworks on Friday March 15, 2019 @12:29PM (#19401216)
I don't think progressively removing money from the system would be unpopular. In fact, taxing the rich is extremely popular.

https://www.vox.com/2019/2/4/18210370/warren-wealth-tax-poll

Re:Rewarding Neglect and Punishing Investment in Struggling ... by AnimalMuppet on Friday March 15, 2019 @05:21PM (#19404422)
First: Given the amount of money that we're talking about (the amount of the pension deficit), I don't think that just taxing the rich is going to cut it if we need to remove the money from the system. It's going to reach down at least to the upper middle class.

Second: Taxing the rich is extremely popular among the people, but not so much within Congress. This may be because the rich are Congress's constituents in a way that the rest of us theoretically are, but in practice aren't.

Third: For this to work, Congress needs to raise and lower taxes, not based on the popularity of taxes, but on the rate of inflation. Do you really trust Congress to make the right decisions at the right time? I don't. I trust them to make the popular decision, not the right one. ("Popular" perhaps more with the rich, but that's not the point. The point is, they're politicians, not economists. They're listening to what's popular, not to the economic data. They're going to mess this up. The Fed is politically independent for a reason.)