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Linneus Missouri | IMHO John Maynard Keynes and his ideas are the main reason nations so willingly take on debt. JMK was a friend of and adviser to FDR and famously said when it comes to debt" we only owe it to ourselves"
As to the money supply. When the US went on the gold standard in the early 1900's it was legal for the average citizen to own gold. So the money supply could naturally increase as individuals mined gold. While individuals can own gold today. The system/process is much more restricted to get gold to the average person, much more expensive, and the total dollars needed are exponentially greater today than one hundred years ago.
Secondly, on the money supply a great suggestion was made by Jude Waninsky 20 years ago. Have Congress fix the value of a basket of goods, gold silver, oil, uranium and fix that value to the money supply, then have a computer set up in the Treasury Dept building in D.C. and when to value of the basket goes up ( too many dollars chasing a fixed supply of goods, monetary inflation)have the computer decrease the money supply as in buy securities or T bills. When the value of the basket goes down( monetary deflation) have the computer add some dollars into the system viva the lowering the interate which reduces the incentive to own securities.
Just my 2 cents.
Edited by Jeff Sr. 2/24/2015 04:51
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Next economic question. WHY is debt so prevalent throughout the world today?
