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from Rolfe Winkler:

Rickards: You can’t print your way out of debt

Reader note: This is Jim's second piece in an ongoing debate with Warren Mosler about the economy. Here are links to previous posts in the series: Writer biographies / Mosler #1 / Rickards #1 / Mosler #2.  There will be one more post from each writer.

by James Rickards

Before I lay siege to Warren Mosler's remedies, let me say he's a brilliant guy I've admired for 25 years going back to his days at AVM.  I got reacquainted in 2004 when I lived in St. Croix and Warren ran for Congress from the Virgin Islands.  His campaign ads were 5-minute infomercials; tutorials on economics and gems of sound fiscal advice.  But this is a debate, so let's begin.

Warren makes eleven points and I agree with two - the elimination of payroll taxes and converting banks into utilities.  Payroll tax elimination spurs consumption and stimulates job creation. As for banks, we need them, we just don't need casinos that call themselves banks.  Bring back Glass-Steagall, separate deposit and loan functions from proprietary trading and banish the latter to hedge funds.  Speculation should survive on its own dime.

I don't need to take the rest point-by-point because they're the same thing - an unlimited belief in the Fed's power to print money.  Warren calls for a $500 per capita state rebate, a federal job for all takers, direct Treasury funding of housing, unlimited deposit insurance, no debt ceiling, Treasury overdrafts at the Fed and federal purchase of foreclosed homes. He doesn't propose free ice cream for children but I don't see why not; just print some money and go for it!

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