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Does it, or does the increase in economic activity make up for that? Is that not true of government issued money.

What's the difference in theory?

by Colman (colman at eurotrib.com) on Fri May 11th, 2007 at 07:51:19 AM EST
[ Parent ]
What's the difference in theory?

Government Bad! Banks Good!

Bush is a symptom, not the disease.

by Migeru (migeru at eurotrib dot com) on Fri May 11th, 2007 at 08:13:16 AM EST
[ Parent ]
We have government issued money (via the Central Bank and Mint as agents): it's called cash. In around 1960 the proportion of cash in the UK economy was around 30 % of money in issue. Now it's less than 3% and falling.

This government money comes without the interest burden and governments get the benfit of "seignorage".

It's not inflationary, unless you print too much of it: bank money has to be MORE inflationary then government money, all things being equal, because of the additional "rent" to the shareholders with the monetary monopoly.

ie cutting out "super profits" to bank shareholders could not possibly be inflationary.

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

by ChrisCook (cojockathotmaildotcom) on Fri May 11th, 2007 at 08:13:47 AM EST
[ Parent ]
Cash could be electronic, not necessarily printed or minted, right?

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Fri May 11th, 2007 at 08:15:47 AM EST
[ Parent ]
I think Chris point is that most money are created outside of government Prints, Mints and electronic mints.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Fri May 11th, 2007 at 12:17:14 PM EST
[ Parent ]

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