Tuesday, July 14, 2015

The Things That Are Economic

When national governments utilize fiat monetary systems as means to increase power - instead of maintaining the integrity of economic connections - populations suffer.  Many who think carefully about such matters, are beginning to doubt a long standing trust, as governments share power with special interests. Some are even willing to consider calls for secession on the part of states (in the U.S.), despite the fact such calls are no panacea for anything, right now. What sort of economic context do those calls suggest? How would some states better represent their populations, and through what means which Washington does not already provide?

Traditional Republicans view calls for secession as ludicrous and quite unimaginable - as do Democrats - and understandably so. But both parties need to be paying closer attention, to a segment of the population which is now being swayed by secession and anti-fiat monetary system talk. Gridlock in Washington is beginning to breed a "do something" mentality, but this reaction would hardly be a proactive step. Presently, states are equally inclined to follow the nature of special interest requests, which would only further limit both service formation and knowledge use. What states legislatures might not realize, is that doing so would only limit other means of production output as well.

Not so long ago, few in power questioned the benefits of the fiat monetary system which developed in the twentieth century. In a sense, fiat monetary formation contributed to new forms of knowledge based services during those decades. However, the resources which Washington once had to do so, are mostly earmarked for other purposes. Even though knowledge use needs to be locally reconfigured by the private sector, no one has begun to initiate the process. In all of this, states still rely on Washington for their own participation in services systems. As Scott Sumner recently noted, states have little choice but to be conservative at local levels, by the nature of their (much smaller) budgets:
2) The hard constraint imposed by a single currency makes European countries behave more like (American) states than countries. Think about it. State debts tend to be much smaller than the Federal debt. States are desperately struggling to bring pension costs under control, while 70 Congressional Democrats call for "expanding" Social Security benefits. 
Unfortunately, expanding Social Security is likely not an option, particularly for lower income levels which will need to create local investment in the future. Even the wealth still available to Washington (such as recent profits on student loans), is earmarked for already existing obligations. Washington's role in the housing market has likely peaked, as well. It's time for citizens to become a real part of all that is economic, once again. Otherwise, the fiat monetary systems which brought so many new options in the twentieth century, could end up in jeopardy. Human capital needs to become a direct component of wealth creation, in order for this all too recent monetary standard to flourish.

Two aspects of a potential services wealth process, are particularly important. First, individuals need to be able to help one another through both formal and informal means. In other words, one needs to be able to arbitrage time value which works best for entrepreneurial providers and recipients, instead of relying on outdated and externally defined services roles. Even though such limitations tend to be attributed to government, often they are first imposed by private special interests, with government's approval.

Second: investment for lower income levels is generally more centered around economic activity which holds personal meaning. Hence it often involves considerable sacrifice and commitment, and needs structures which can provide a gradual and incremental process. This form of investment needs a completely different design, from the large scale investments which are intended for large groups seeking monetary gain instead of personal involvement.

Another aspect of large investment holdings (as opposed to what is needed), is the fact they realize gains from the use of time and other resources in a rival context. Rival context by necessity of design, leaves someone or something out. This is why - for instance - it is not logical for governments to invest on behalf of everyone, when they utilize (what has to be) a broad exclusionary framework in order to generate profit.

Local investment pools for knowledge use systems wouldn't need to exclude (local) time aggregates in order to generate profit, because they would optimize a wide range of related factors close at hand, in mutual support settings. Time would be rival only in the sense of spatial match possibilities. This process would also align with specific individual and group preferences. In those inevitable moments when individual risks prove too great, the group would still benefit from other shared investment sets.

Governments are able to maintain stability by making certain the things that are economic, also remain a vital part of the life of their own citizens. Any region in the U.S. which experiences problems with unemployment and services limitations, deserves a chance to start anew. Even though decentralized settings are not a direct part of government wealth, they are still able to contribute to a nation's wealth in many ways. Secession possibilities should not even be on the table - particularly for states in the U.S. Instead, a greater understanding is needed, how to remain independent, and yet together, at the same time.

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