When a private company needs funding beyond what is available from its operating income, it must decide between the non-debt option of issuing stock and the debt option of issuing bonds or taking out loans. We must assume familiarity with these alternatives among those who deal with the subject of corporate finance. The federal government has corresponding options. It cannot sell interests in itself akin to stock, but it does have the non-debt option, as governments including our own have used throughout history, of issuing sovereign fiat currency as well as the same debt options used by corporations. Just as corporations must not sell too much stock and dilute its value, governments must not issue too much sovereign currency and dilute its value. Both decisions must be market-based, not arbitrarily determined. Our object here, in concluding our series on the subject, is not to rehash introductory material found in the preceding four newsletters, but to broach the subject of whether we are now approaching and can effect a tipping point leading to the re-introduction of debt-free United States Notes into our U.S. Dollar currency mix.
We are pleased that this matter is presently being studied by a nationally respected think tank – so often a key in triggering economic policy legislation. We are also pleased with the interest that has grown on Capitol Hill and within the Administration. These are important but still early steps. We must recognize history’s examples of good ideas that did not reach the tipping point of adoption and implementation for decades.
An example is putting seat belts in cars. For over half a century, it was widely known that “seat belts save lives.” Yet, during all those decades, great numbers of people were killed or disabled for the lack of something as simple and inexpensive (estimated, at the time of introduction, to cost $3.50) as seat belts. What did it take to finally create a tipping point when the right knowledge no longer played in the background but was grasped and acted upon? It was largely the work of one activist lawyer, Ralph Nader - not an auto engineer or safety specialist by vocation, not a member of a blue-ribbon commission charged to investigate the matter - but simply an individual with enough understanding of the issue to get involved and enough character to stay involved. It can be a small incremental push that brings about such a large event.
We are indebted to Malcolm Gladwell, in his book The Tipping Point, for a better understanding of this phenomenon. We are similarly indebted to Francis Wheen, in his series, The History of Folly for a consciousness of how many costly follies have plagued human history over incomprehensibly prolonged periods of time. Among many others they have included wars that went awry, as described in Peter, Paul and Mary’s song Where Have all the Flowers Gone? (best known for its refrain, “When will they ever learn?”)
It is still unresolved whether our government will return to one of the best ideas concerning money ever employed, the use of debt-free United States Notes. We do not know if our situation parallels the tipping point for the installation of seat belts in production-model cars, or if it parallels the many decades during which grievously unnecessary losses were sustained because of the folly of inaction on this obvious solution.
One might just sink into a chair, reach for the nearest guitar, and sing those endless repeats of “When will they ever learn?” But more is required of us, at this historic moment when the amount of spending and whatever inflation it will cause have been determined by the budget, and we must simply decide on how to fund the deficit Congress has agreed to. The question is not when will those who may not yet fully understand the issue ever learn. The question isn’t why some put such faith in tapping funds the elderly have paid into tomorrow rather than avoiding unnecessary debt today. The question is, when will those who do fully understand - those who are in positions to educate and to influence – speak out from all quarters?
Until such influencers seize the moment and put a hand to the common task, we simply won’t know how seemingly immovable a boulder might be budged to the tipping point.
Policy Winners seeks to foster collaboration among our readers who share our concern. Contact information is furnished below. Names or affiliations of those who contact us with any questions or comments will not be cited in any newsletter or other forum except by permission.
We are pleased that this matter is presently being studied by a nationally respected think tank – so often a key in triggering economic policy legislation. We are also pleased with the interest that has grown on Capitol Hill and within the Administration. These are important but still early steps. We must recognize history’s examples of good ideas that did not reach the tipping point of adoption and implementation for decades.
An example is putting seat belts in cars. For over half a century, it was widely known that “seat belts save lives.” Yet, during all those decades, great numbers of people were killed or disabled for the lack of something as simple and inexpensive (estimated, at the time of introduction, to cost $3.50) as seat belts. What did it take to finally create a tipping point when the right knowledge no longer played in the background but was grasped and acted upon? It was largely the work of one activist lawyer, Ralph Nader - not an auto engineer or safety specialist by vocation, not a member of a blue-ribbon commission charged to investigate the matter - but simply an individual with enough understanding of the issue to get involved and enough character to stay involved. It can be a small incremental push that brings about such a large event.
We are indebted to Malcolm Gladwell, in his book The Tipping Point, for a better understanding of this phenomenon. We are similarly indebted to Francis Wheen, in his series, The History of Folly for a consciousness of how many costly follies have plagued human history over incomprehensibly prolonged periods of time. Among many others they have included wars that went awry, as described in Peter, Paul and Mary’s song Where Have all the Flowers Gone? (best known for its refrain, “When will they ever learn?”)
It is still unresolved whether our government will return to one of the best ideas concerning money ever employed, the use of debt-free United States Notes. We do not know if our situation parallels the tipping point for the installation of seat belts in production-model cars, or if it parallels the many decades during which grievously unnecessary losses were sustained because of the folly of inaction on this obvious solution.
One might just sink into a chair, reach for the nearest guitar, and sing those endless repeats of “When will they ever learn?” But more is required of us, at this historic moment when the amount of spending and whatever inflation it will cause have been determined by the budget, and we must simply decide on how to fund the deficit Congress has agreed to. The question is not when will those who may not yet fully understand the issue ever learn. The question isn’t why some put such faith in tapping funds the elderly have paid into tomorrow rather than avoiding unnecessary debt today. The question is, when will those who do fully understand - those who are in positions to educate and to influence – speak out from all quarters?
Until such influencers seize the moment and put a hand to the common task, we simply won’t know how seemingly immovable a boulder might be budged to the tipping point.
Policy Winners seeks to foster collaboration among our readers who share our concern. Contact information is furnished below. Names or affiliations of those who contact us with any questions or comments will not be cited in any newsletter or other forum except by permission.
