What is the most import aspect of money?

In the simplest terms possible I'm defining money as:

Money is simply a social construct that allows for the exchange of goods and services.

For those that wish to attempt to take issue with the question on its face, I'll simply say that both fiat money and commodity money meet the definition above, though each has its advantages and disadvantages.

If you feel that all are equally valid, then choose all three, if you think one is more important than the other, choose only those you think are most important.

 

Some form of currency is required because bartering cannot work in most areas. At simple levels we can barter or trade something to get something else in return. And this works great as long as we and others can barter everything we need. But in those cases in which we cannot barter, there must be some universally acceptable currency. And this currency won't necessarily carry the identical monetary amounts from location to location just as bartering will have different values in different scenarios. Money is nothing but a medium of exchange...

 

why such a utterly trivial question. Why not ask what monetary policy should be?
or What is difference between Democrats and Republicans on monetary policy. If you concentrate on trivia
it will ruin your mind.

 

?????he did not want to know if some form of money is required but rather what is the most important aspect of money.

 

It is also extremely important that money is not set up in such a way that
we define ourselves as bankrupt..... when the actual reality is quite different.

The Chicago Plan sure does sound interesting!



http://www.michaeljournal.org/articles/social-credit/item/the-public-debt-problem?/plenty34.htm

 

I've tried to tell you this Dennis....

In the US, Canada, Japan, Australia and the UK when the government pays interest, if the people hold the debt, then interest paid is earned as an income, thus higher interest rates simply lead to higher incomes for debt holders.

Interest doesn't take money from an economy, it adds money to the economy.

The problem is that it generally tends to add money to the investor class increasing the disparity between rich and poor.

 

Agreed....but what if there is a tiny segment of the population of the investor class......
who want to deliberately scare the average person who do not understand these facts?

George Soros is the perfect example........ he takes advantage of the ignorance of
lower level investors. 2017 is a good time to discuss options on how to make the economy
sound less scary and I agree with Michael Kumhof that the Chicago Initiative proposed back in the 1930's has major advantages over the accounting system used now.

 

What is the most importnant....? The government takes too much of mine and gives me too much of yours.

Final thought: "But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made—before it can be looted or mooched—made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.'--http://aynrandlexicon.com/lexicon/money.html

 

yes but liberals want to reverse evolution and allow the lest productive among us to reproduce as much as the most productive. Evolution is a scientific concept and liberals don't believe in science.

 

Moving away from being backed by debt would be a good first step.

 

Republicans have long tried to make federal government debt illegal in America the Democrats have killed every opportunity because their primary interest is to keep the welfare flowing So they keep the votes flowing to them

 

How would you do that, exactly?

 

by making debt illegal as Republicans have tried to do 30 times since Jefferson's first attempt. Do you know why Democrats have killed every effort?

 

Makes absolutely no sense of course since every investor tries to do that.

 

The numbers you posted are incorrect. For example, $1 earning interest of 3% per year, compounded annually, will total $18.66 in 100 years.

 

Can't do that under capitalism.

 

Better rethink that! Higher interest reduces borrowing money. So in that way money in the economy is reduced. But also, the higher interest income goes into the pockets of the rich banksters to a large extent and not into the economy.

 

You are only looking at one side of the argument - the interest paid is revenue (to the debt-owners).

For those holding variable-rate mortgages or loans, however, the interest paid is not revenue but an expense. And when rates rise their net remaining income (for other purchases) falls.

So, debt can actually constrain the usage of net-income.

As far as "the economy" is concerned, there is no boost consumer purchases and there no expansion. What the borrower pays in debt-interest is revenue for the loaner - the economy sees no difference in terms of its accounting. In fact, debt-holders can find their total consumption reduced if interest-rates rise.

It is the prevailing interest rate that determines whether debt is good or bad for an economy. When rates are low, other factors remaining equal, debt incurred for expenditure does spur the economy. However, from the Great Recession onward, "other factors" (such as employment) did not remain unchanged. Employment levels plummeted. The result was a severe contraction of Demand.

And even the very low interest rates could not do much to spark consumption. People were too afraid that they would lose their jobs, so they tended to save money (not spend it) - even if their interest-return on savings was miniscule ...

 

sure you can, you just make govt debt illegal

 

The quantity of it?

 

This, exactly. I love interest!

 

double

 

But there isn't a tiny segment.

 

That is not correct, at all. That interest goes into the pockets of huge numbers of 'mom & dad' investors. Small scale, middle class folk, who've simply invested their little bit of surplus intelligently. Therefore it goes into the economy.

 

a Balanced Budget Amendment would make debt illegal and finally put an end to most of the countries financial problems!!