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Ryan's monetary policies and the Tierra Solution

Post By gaia1 in American Monetary Matters


Friday, August 24, 2012

Paul Krugman’s column in today’s New York Times entitled “Galt, Gold and God” is the inspiration for this blog post. He shows and other authors show the danger of Ryan’s monetary views and how they are based upon the extreme market fundamentalism and extreme individualism of Ayn Rand that has been rejuvenated by the Atlas Society. He would repeal the dual mandate of the Federal Reserve, i.e. inflation fighting and employment creation, in favor of inflation fighting only, leaving unemployed people who are considered “moochers” anyway, to fight for themselves. Furthermore, he would raise the interest rate in recessionary times in order to draw investors into the market, a position that runs counter to economic thinking and the historical evidence of the Hoover Administration during the Great Depression. He takes Fed Chairman Bernanke to task in his House Budget hearings spewing arrogantly his impossible ideas as if he is a genuine monetary policy wonk. He, together with other republican pundits, believes in hard currency rather the fiat money and in return to a gold standard or at least a commodity standard, so that the FED is unable to print money and engage in quantative easing. Together with Ron Paul and other libertarian politicians he would use its shrinked mandate to reduce government involvement in monetary matters.

The Tierra Solution also proposes a monetary standard, but not one based on gold or a set of commodities, but one that can be set according the requirements of the times. In these carbon-constrained times it would be a standard of a specific tonnage of CO2e per person. Unlike the libertarian position, the Tierra system is based upon an explicit value-based planning system of sustainability economics with a strong role of governmental engagement in these complicated times where the free market is not delivering the social, economic and ecological results for sustaining futures. Finally, unlike the dangerous Ryan system which is only domestically focused,  the Tierra system is globally focused where cooperation rather than competition between states is the preferred mode of co-existence.