Why don't members of the EU make their own currency?

[Anarchist420]

1. If EU members made their own currencies ... wouldn't the currencies balance so the people wouldn't be malinvested in so much debt? The EU can't collect, so that allows the members to balance the Euro and to reduce debt. So the EU isn't a bad idea on its own (in fact, it can preserve liberty), but its members seem scared to use their rights.

2. Why don't members relieve debt by immediately cutting absolute spending concurrent with ending (or reducing enforcement of) certain taxes (although the revenue cuts slightly smaller than the spending cuts)?

3. What's wrong with cancelling all $ debt and replacing savings with a new currency and shift that around?

4. Why can't the Fed raise discount rates and/or reserve ratios based upon each bank's amount of debt?

Of course, free market banking (in a centralized republic) is a good idea and constitutional confederations (no centralized tax powers enumerated and no ad valorem taxes) are the best.

 

[cabri]

Each EU member originally had and still has their own currency.
Just tied to a common currency

For one that does so much research,how did you overlook such.


And why to you continually start out on one topic and then switch to another.

 

[ElFenix]

the EU doesn't have anything nearly as powerful as the fed. the EU is a currency board rather than a central bank, and the whole thing is set up so that germany-style economies are the only ones that work. problem is that only germany can be germany, because no one is going to buy a greek audi.

 

[brianmanahan]

this is probably the most cohesive a420 thread i have ever read

 

[JumBie]

Because it would destabilize the American dollar and that's something America doesn't like.

 

[Anarchist420]

i didn't mean to start a new thread. I apologize

 

[fskimospy]

the EU doesn't have anything nearly as powerful as the fed. the EU is a currency board rather than a central bank, and the whole thing is set up so that germany-style economies are the only ones that work. problem is that only germany can be germany, because no one is going to buy a greek audi.

Not true, Europe has the ECB, which is basically the fed.

http://en.wikipedia.org/wiki/European_Central_Bank

Germany is (right now) the biggest problem with the Euro, but their fundamental issue isn't really from the ECB, it's that they have a unitary monetary policy (the ECB) but not a unitary fiscal policy.

 

[Anarchist420]

Germany is (right now) the biggest problem with the Euro, but their fundamental issue isn't really from the ECB, it's that they have a unitary monetary policy (the ECB) but not a unitary fiscal policy.

disagreed. no one needs centralization; it sucks and it has destroyed without defending rights long term. Centralization of power is risky

do you like how the UK works with their unified fiscal and unified monetary policy? debt at the level we have it now plain sucks. a 1% payroll tax (only on wages from $30k-270k) alone is sufficient (and efficient as well compared to all other taxes) and that mortgage rates in Virginia became 1/3 per annum after we got a new currency to end all current debt in the united states.

Or best yet independents govts of all sovereign people all in a Voluntary Confederation of North America (fiscal and monetary policy should be radically decentralized and basically the articles of north american confederation and voluntary union can be based near completely with thomas Jefferson's 16 Articles of Confederation proposal).

I mean, the system distorts the market in favor of banking institutions and my parents are in huge mortgage debt (while Charles Schwab and associates chips away at their $1.2mn or so worth of cash savings) because they're scared to pay it off due to some combination of taxes, credit score, and mortgage rates that aren't 1/3 per annum. State capitalism sucks because it's fasco-communistic; we all need democratic capitalism for the future.

I could be sold off into slavery (if I don't get killed and if I don't have 100% of my remains cremated). DAMN IT!

Not true, Europe has the ECB, which is basically the fed.

agreed; i dont know why ElFenix said the EU is a currency board. perhaps he could explain.

 

[ElFenix]

Not true, Europe has the ECB, which is basically the fed.

it's not basically the fed because it doesn't have near the powers that the fed does. it literally could not have done the fed's response to the great recession because it simply can't.

Germany is (right now) the biggest problem with the Euro, but their fundamental issue isn't really from the ECB, it's that they have a unitary monetary policy (the ECB) but not a unitary fiscal policy.

and the unitary monetary policy is the bundesbank's. the only way to satisfy the way the bundesbank runs monetary policy is to have a german economy.

 

[fskimospy]

it's not basically the fed because it doesn't have near the powers that the fed does. it literally could not have done the fed's response to the great recession because it simply can't.

What specific things do you mean?

 

[ElFenix]

What specific things do you mean?

the fed swapped the banks' bad (real) assets off the banks' books, flushed them with cash, and will swap the assets back in when the assets are worth something again. the ECB is constitutionally prohibited from doing that.

 

[Spungo]

The countries should go back to having their own currencies. There's basically no chance of their national debts being paid in full, and it's politically impossible to default on the debt, so the only solution is to inflate the debt away. That's what Russia did in the 1990's. It sure sucked for everyone holding Russian money, but the debt was no longer a burden. Now Russia has relatively low taxes because they're not crippled by debt.

If that debt isn't destroyed through default or high inflation, it will be a drag on European economies for many years to come. That debt means high taxes. Does anyone remember that song Taxman by the Beatles? 1 for you, 19 for me because I'm the tax man. Those ungodly tax rates were a result of WW1 and WW2 debt. It was a serious drag on the economy back then. Why build a factory in the UK where the taxes are super high when you could build a factory in America? One could argue that Britain never fully recovered from WW2 because they still have high taxes and they still have high debt.

You can look at the debt clocks here to see just how screwed some countries are:
http://www.usdebtclock.org/world-debt-clock.html
Note that Germany is drowning in debt as well.

 

[ElFenix]

russia defaulted in 1998.

the rest of your post is a bunch of 0 sum claptrap that was thoroughly discredited by 1940 but for some reason has come back in vogue.

 

[Spungo]

the rest of your post is a bunch of 0 sum claptrap that was thoroughly discredited by 1940 but for some reason has come back in vogue.

Which part was discredited? Moving factories and offices for tax reasons? Debt being a problem? Governments raising taxes to cover budget deficits? I'm pretty sure all of those are facts.

If debt doesn't matter, why do we bother paying taxes?

 

[fskimospy]

the fed swapped the banks' bad (real) assets off the banks' books, flushed them with cash, and will swap the assets back in when the assets are worth something again. the ECB is constitutionally prohibited from doing that.

The ECB can buy the same sorts of assets as the fed did? In fact, they are doing it right now.

 

[Anarchist420]

the fed swapped the banks' bad (real) assets off the banks' books, flushed them with cash, and will swap the assets back in when the assets are worth something again. the ECB is constitutionally prohibited from doing that.

They still attempt to control interest rates by centralization of inflation while fucking everything up in the process. The ECB is 99% the same as the Fed.

The countries should go back to having their own currencies.

That would be okay if they were not legal tender or if the ECB still made currency.

There's basically no chance of their national debts being paid in full, and it's politically impossible to default on the debt, so the only solution is to inflate the debt away. That's what Russia did in the 1990's. It sure sucked for everyone holding Russian money, but the debt was no longer a burden. Now Russia has relatively low taxes because they're not crippled by debt.

Russia has a lot of centralization just like the vast majority does today. And it may not always be politically impossible for them to default on the debt; they could come up with a new currency while cancelling the remnants of the current euro.

Does anyone remember that song Taxman by the Beatles? 1 for you, 19 for me because I'm the tax man. Those ungodly tax rates were a result of WW1 and WW2 debt. It was a serious drag on the economy back then. Why build a factory in the UK where the taxes are super high when you could build a factory in America? One could argue that Britain never fully recovered from WW2 because they still have high taxes and they still have high debt. You can look at the debt clocks here to see just how screwed some countries are: http://www.usdebtclock.org/world-debt-clock.html Note that Germany is drowning in debt as well.

that's 200%age points for you friend.

russia defaulted in 1998. the rest of your post is a bunch of 0 sum claptrap that was thoroughly discredited by 1940 but for some reason has come back in vogue.

?

Which part was discredited? Moving factories and offices for tax reasons? Debt being a problem? Governments raising taxes to cover budget deficits? I'm pretty sure all of those are facts. If debt doesn't matter, why do we bother paying taxes?

All debt should be reduced by some combination of decentralization (but no strings attached), cancellation (especially debt held by foreigners), and sale of public assets; after that the old currency can balanced by free market banking, but the modern State won't allow it.

Free market banking and free market currency is better than both central banking and the pre-Wilson Democrats' Independent Treasury System; under free market banking, deficits and taxes are near non-existent.

 

[fskimospy]

The countries should go back to having their own currencies. There's basically no chance of their national debts being paid in full, and it's politically impossible to default on the debt, so the only solution is to inflate the debt away. That's what Russia did in the 1990's. It sure sucked for everyone holding Russian money, but the debt was no longer a burden. Now Russia has relatively low taxes because they're not crippled by debt.

If that debt isn't destroyed through default or high inflation, it will be a drag on European economies for many years to come. That debt means high taxes. Does anyone remember that song Taxman by the Beatles? 1 for you, 19 for me because I'm the tax man. Those ungodly tax rates were a result of WW1 and WW2 debt. It was a serious drag on the economy back then. Why build a factory in the UK where the taxes are super high when you could build a factory in America? One could argue that Britain never fully recovered from WW2 because they still have high taxes and they still have high debt.

You can look at the debt clocks here to see just how screwed some countries are:
http://www.usdebtclock.org/world-debt-clock.html
Note that Germany is drowning in debt as well.

Oh jesus not more nonsensical rambling about economics. The UK's debt before the recent financial crisis was close to tied for the lowest level it had seen in centuries.

By your logic the UK never recovered from the Napoleonic Wars.

 

[JEDIYoda]

Because it would destabilize the American dollar and that's something America doesn't like.

your insightfulness is just amazing...

 

[ElFenix]

Which part was discredited? Moving factories and offices for tax reasons? Debt being a problem? Governments raising taxes to cover budget deficits? I'm pretty sure all of those are facts.

If debt doesn't matter, why do we bother paying taxes?

That debt is a crushing drag on the economy. Its not. You know what's a drag on the economy? Persistent recessionary pressures because people don't want to be the first ones in the water.

Taxes are a hedge against inflation.

 

[Spungo]

That debt is a crushing drag on the economy.

???
http://en.wikipedia.org/wiki/Greek_government-debt_crisis
http://en.wikipedia.org/wiki/2008–14_Spanish_financial_crisis
http://en.wikipedia.org/wiki/2010–14_Portuguese_financial_crisis

If you know a way to make their debt not be a problem, you should tell them.

By your logic the UK never recovered from the Napoleonic Wars.

It certainly had long lasting damage to their economy. Wars look like they're great for the economy while the credit bubble is expanding and everybody is producing things, but that comes at the cost of future consumption. That debt eventually needs to be paid through taxes. Where does that tax money come from? It comes from people like you and I. If more of my money goes to cover government debt or to cover my own personal debts, it means less of my money goes to present day consumption, and that leads to deflation. This is why the 1930's had severe deflation. There was a huge credit bubble and inflation during the 1920's, but that came at the cost of deflation and economic contraction in the 1930's. Borrow and spend today means I can't borrow or spend tomorrow. Stores are opening and business is thriving when everybody is borrowing and spending money, and then the economy contracts when the bills show up and people are no longer capable of spending. That is the problem debt creates.

It also goes beyond the problem of limiting present and future consumption. Non-productive debt can also limit future productivity, and that's even worse because your productivity determines how much you can consume. Think of all the great things we have. Roads, rail, internet, electricity, water pipes, water treatment, sewer, garbage disposal. Those things cost money, and it's a lot harder to find that money if you're bogged down with debt from some war that happened 10 or 20 years ago.

Japan is a great example of why you shouldn't go full retard with government debt. Even at absurdly low interest rates like 1%, roughly 24% of Japan's budget goes to paying interest on debt. That's money they can't spend on roads, education, police, or medical care. How do you think your local government would do if roughly 1/4 of the budget was paying past debts? Do you think the schools and roads would slowly start to deteriorate? Would the police force get cut? Would crime go up? Would businesses flee like they did in Detroit? What about Baltimore? That city is decaying like Detroit for pretty much the same reasons. There are a lot of past debts to pay, so they can't afford to hire more cops, so crime goes up and people avoid doing business in those cities.

I'm surprised I need to explain this. People leaving bankrupt areas is as old as civilization itself. It applies to cities, it applies to states, it applies to countries. It might even apply to planets some day.

Taxes are a hedge against inflation.

But inflation is a good thing. It makes debts easier to pay.

 

[Anarchist420]

That debt is a crushing drag on the economy. Its not. You know what's a drag on the economy? Persistent recessionary pressures because people don't want to be the first ones in the water. Taxes are a hedge against inflation.

The real drag is the State and the fact that Congress and the Supreme Court are of the mindset that those who credit the govt have a right to get paid back in tax revenue. So taxes aren't necessary to check inflation. A confederation govt that serves the people along with its member states can minimize fluctuations in the money supply while allowing creditors to get paid back (even if mostly in substitutes) without borrowers being in monkey shit.

And I don't think many people care or realize how much Alexander Hamilton's strong, yet very risky imprecise imagination distorted reality and what a fucked up dude he was (like Leon Trotsky and Adolf Hitler were even though none of them could help it); he really opened the Pandora's Box as the first Treasury Secretary. Going on what I know and believe he probably wanted to be called the Father of the U.S. Constitution (unlike James Madison who credited "many hands and many minds") and his philosophical heirs wrote and enforced the angrily and imprecisely written 14th Amendment. Unconditional Surrender would've been his best friend

Alexander Hamilton wasn't responsible for his serious identity issues, but please remember that before Wilson was President the Party of thomas Jefferson and later Drew Jackson were the party in touch with liberty and justice for all. I mean, Henry Clay was the idealist totally out of touch with reality (he was impressionistic and his eyes looked creepy as hell) as was the successful Guardian Lincoln after him and the idealist Alexander Hamilton before them.

 

[soccerballtux]

the EU doesn't have anything nearly as powerful as the fed. the EU is a currency board rather than a central bank, and the whole thing is set up so that germany-style economies are the only ones that work. problem is that only germany can be germany, because no one is going to buy a greek audi.

wow, those are some harsh words