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On the point about infinite growth, this guy has other ideas; interested in your and others' take on this..

http://blogs.telegra...net-easy-peasy/

So what he's saying is all we need to have infinite growth is to change the definition of growth?

Sounds a lot like hedonics and the various other euphemisms that have been used to cover the fact that over the last 30 years we've had no growth, only inflation.

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I think its correct, more or less. It was a result of WWII.

Of course that situation, 30% of money was debt free, is what led to the inflation problems in the 70's, and why Bill's proposal is nuts.

Doesnt Bill counter this by suggesting an end to fractional reserve banking?

So if the govt inject 3% extra money supply into the economy, it will stay at 3% no matter how many times it moves through the economy and banks.

ie Banks wont be able to create new credit money from this base money supply.

Besides, the oil shocks probably didnt help matters in the 70s, or shock of coming off the gold standard, add to that the deflationary effect of offshoring production to low cost nations, and id suggest a lot of the stagflation of the 70s can be explained away with other things.

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Doesnt Bill counter this by suggesting an end to fractional reserve banking?

Yes, and that is the location of the prime idiocy of the proposal.

Bill proposes a fixed (e.g. scarce) stock of pretend money managed by some computer, and proposes "rules" to defend the integrity of that stock from both those who would debase and and those who would hoard it.

A quick review of how well such rules have worked over say, the last 100 years, with particular attention to how well such rules have worked over the last 20 years during the emergence of very powerful communications and IT, should be sufficient for most sensible people to see how deeply flawed Bill's idea really is.

The kind of rule that bans FRB, needs to be basically believed in and adhered to by pretty much the whole free market system. Because if any part of that system does not adhere to the rules, they will in the short run at least, make a killing. And while one may suppose that if the rul breakers are not defended against the outcome of their own actions, as long as the initial rule breakers are savvy enough to transfer the bag to another party before things collapse, then the incentive to break the rules is far more powerful than the rules itself.

Such a situation is normally a sign of a scheme designed to hold a complex adaptive system like a human economy away from its natural attractors. While such situations can be sustained for a short period, they quickly create irresitible opportunities for those whose actions move the system closer to a stable attractor. Typically this kind of scenario can only be sustained if a very large number of independant actors agree to agree on the rules.

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