My guess is it is much more than greed that has made possible the perpetuation of a power source that was so long ago obsolete.
In particular modern monetary theory seems to provide the answer. It allows government to base the entire political and economic system on how government itself chooses to leverage future opportunity costs with inflation.
Imagine that in the 1920s all money was replaced with monopoly money from the classic game Monopoly (little pink bills) that only the government could print and further that this was made the only practical legal means of tender and that only the government could tax it.
And imagine further that printing this stuff at a certain rate (not too quick and not to slow) cumulatively increasing the pool of money was a necessary but not wholly sufficient condition for expanding the economy. Don't think "oh its merely a necessary component, one of many necessary parts" No, its the economic equivalent of being able to turn up or turn down the strength of gravity on the Earth's surface with the power to make it so you can't even stand up or you feel like your are pushed up hills or cast adrift. Almost more incredible is a hand full of super fallible governments have this power but their population doesn't know this because of propaganda about the primacy of markets.
Now understand that the government prints and spends that mere monopoly money fiction first on whatever it wants and only later taxes or issues bonds to get back any amount that risked creating slippage in the form of inflation. It taxes and issues bonds to stop inflation slippage and therefore increase animal spirit belief in the glue like power of its fictional monopoly money. Again, yes it produces concrete results but runs on the habitual unconscious equivalent of brain washed conditioning and superstition. Lets emphasize, the bonds entice some to buy (give the government back its make-believe monopoly money to reduce slippage) because it provides a small shelter against inflation. But...be it a Treasury note or Treasury bond or Treasury bill it is nothing at all but more monopoly money paid back with yet more inflated monopoly money and it pays a pittance and it is no guarantee against inflation eating away the principal just a guess and the government just does it to trim back any apparent trend of inflationary slippage after the fact. There is no debt it cannot actually owe or be owed its own fake monopoly money in any contingent real sense because there is no real limit on its printing more and no prudent risk on printing aside from debasing the currency with unwanted amounts of inflation so it all reduces to opportunity cost and future opportunity cost in particular. And the question then reduces further to: for the benefit of whom. It cannot continue to be first and foremost for the benefit of fossil fuel associated inherited wealth.
And despite the myths there is no great gain or profit in a bank brokering these bonds or being owed them its just more chasing of monopoly money and spreading of it- banking is not even remotely the constraint even if majority public banking and better citizen bankruptcy protections are needed. Rather sovereign monopoly money governments hide their culpability behind a multitude of fictitious banks that are always coming into and going out of existence- remember in the 07 crisis when the government effortlessly jammed all that toxic derivative sludge down Wells Fargo's throat and look a decade later it is still bloated with it. The government also controls the interest rates on its currency (the main inflationary lever in the end- because it is a reductive function of money printing or so called money multiplying) and again private money multiplier loans and rates can be a problem if too much usury is allowed but again it turns out all the banks are just a part of the government monopolized fictitious money printing machine. And crucially there is no deficit (its all surplus) and nothing the government owes anyone except more future monopoly money printing and it is all ultimately owed back to the government under sovereign fiat currency.
It also can't run out of money because it can always print more. The firewall between the Fed and the government is just more diversion another fraud designed to distract from the US being a fully planned centralized top down society just like the old Soviet Union it used to project onto. They manufacture crises to cover that it is regularly necessary to print more money to expand society but they ink cloud it so we do see them handing stacks of cash to their friends first.
But what about gold or silver or crypto or some alternative? Fiat generally isn't even printed its just moving electrons around and its backed by the force of tax, guns butter and law. Crypto on some level is trying to preserve the red light zone of cash or the notion that interests rates could be made predictable or that people might evade tax (controls on inflation) by never coming up for air to buy actual tangible goods. Its delusion but may extend the life of cash and the tech will reinforce the robustness of fiat monopoly money printing. Would crypto make animal spirits more predictable by replacing targeted cash injections with injections by formula? Not when it lacks the power of fiat along so many dimensions and would have to compete with fiat. If not fiat formula what about a naturally constrained like historical gold or silver? Same issue and it just goes in the direction of barter and can't compete with the power of unconscious control over animal spirits. Don't believe it? People will a trade in a heart beat a brick of gold or a paid off home and paid for raw land for the right amount of electron movement in a computer they can't find or a stack of fictitious monopoly money that they believe meets some threshold on being less make-believe. Still not convinced(?)- run it in reverse- could the government replace its made up green dollars by claiming it was switching to the classic Monopoly game's paper currency? Not impossible but... Or imagine that the government said suddenly that due to an error (not credible I know) its sovereign currency the US dollar had gone negative in value overnight like a barrel of oil and that its negative value was now frozen and being recalled as debt due to its original issuer the USG on a 1:1 basis to be repaid over 10 years time in its new just issued currency the dollar II? Upheaval of course but people would likely still trade with old dollars if allowed as in "I'll take $150 of your old dollar debt if you sell me that planter." Interesting how even a negative value is better than freezing a zero value or zeroing out because it preserves the vestment or sunk cost future expectation interest.
Continued in next post
In particular modern monetary theory seems to provide the answer. It allows government to base the entire political and economic system on how government itself chooses to leverage future opportunity costs with inflation.
Imagine that in the 1920s all money was replaced with monopoly money from the classic game Monopoly (little pink bills) that only the government could print and further that this was made the only practical legal means of tender and that only the government could tax it.
And imagine further that printing this stuff at a certain rate (not too quick and not to slow) cumulatively increasing the pool of money was a necessary but not wholly sufficient condition for expanding the economy. Don't think "oh its merely a necessary component, one of many necessary parts" No, its the economic equivalent of being able to turn up or turn down the strength of gravity on the Earth's surface with the power to make it so you can't even stand up or you feel like your are pushed up hills or cast adrift. Almost more incredible is a hand full of super fallible governments have this power but their population doesn't know this because of propaganda about the primacy of markets.
Now understand that the government prints and spends that mere monopoly money fiction first on whatever it wants and only later taxes or issues bonds to get back any amount that risked creating slippage in the form of inflation. It taxes and issues bonds to stop inflation slippage and therefore increase animal spirit belief in the glue like power of its fictional monopoly money. Again, yes it produces concrete results but runs on the habitual unconscious equivalent of brain washed conditioning and superstition. Lets emphasize, the bonds entice some to buy (give the government back its make-believe monopoly money to reduce slippage) because it provides a small shelter against inflation. But...be it a Treasury note or Treasury bond or Treasury bill it is nothing at all but more monopoly money paid back with yet more inflated monopoly money and it pays a pittance and it is no guarantee against inflation eating away the principal just a guess and the government just does it to trim back any apparent trend of inflationary slippage after the fact. There is no debt it cannot actually owe or be owed its own fake monopoly money in any contingent real sense because there is no real limit on its printing more and no prudent risk on printing aside from debasing the currency with unwanted amounts of inflation so it all reduces to opportunity cost and future opportunity cost in particular. And the question then reduces further to: for the benefit of whom. It cannot continue to be first and foremost for the benefit of fossil fuel associated inherited wealth.
And despite the myths there is no great gain or profit in a bank brokering these bonds or being owed them its just more chasing of monopoly money and spreading of it- banking is not even remotely the constraint even if majority public banking and better citizen bankruptcy protections are needed. Rather sovereign monopoly money governments hide their culpability behind a multitude of fictitious banks that are always coming into and going out of existence- remember in the 07 crisis when the government effortlessly jammed all that toxic derivative sludge down Wells Fargo's throat and look a decade later it is still bloated with it. The government also controls the interest rates on its currency (the main inflationary lever in the end- because it is a reductive function of money printing or so called money multiplying) and again private money multiplier loans and rates can be a problem if too much usury is allowed but again it turns out all the banks are just a part of the government monopolized fictitious money printing machine. And crucially there is no deficit (its all surplus) and nothing the government owes anyone except more future monopoly money printing and it is all ultimately owed back to the government under sovereign fiat currency.
It also can't run out of money because it can always print more. The firewall between the Fed and the government is just more diversion another fraud designed to distract from the US being a fully planned centralized top down society just like the old Soviet Union it used to project onto. They manufacture crises to cover that it is regularly necessary to print more money to expand society but they ink cloud it so we do see them handing stacks of cash to their friends first.
But what about gold or silver or crypto or some alternative? Fiat generally isn't even printed its just moving electrons around and its backed by the force of tax, guns butter and law. Crypto on some level is trying to preserve the red light zone of cash or the notion that interests rates could be made predictable or that people might evade tax (controls on inflation) by never coming up for air to buy actual tangible goods. Its delusion but may extend the life of cash and the tech will reinforce the robustness of fiat monopoly money printing. Would crypto make animal spirits more predictable by replacing targeted cash injections with injections by formula? Not when it lacks the power of fiat along so many dimensions and would have to compete with fiat. If not fiat formula what about a naturally constrained like historical gold or silver? Same issue and it just goes in the direction of barter and can't compete with the power of unconscious control over animal spirits. Don't believe it? People will a trade in a heart beat a brick of gold or a paid off home and paid for raw land for the right amount of electron movement in a computer they can't find or a stack of fictitious monopoly money that they believe meets some threshold on being less make-believe. Still not convinced(?)- run it in reverse- could the government replace its made up green dollars by claiming it was switching to the classic Monopoly game's paper currency? Not impossible but... Or imagine that the government said suddenly that due to an error (not credible I know) its sovereign currency the US dollar had gone negative in value overnight like a barrel of oil and that its negative value was now frozen and being recalled as debt due to its original issuer the USG on a 1:1 basis to be repaid over 10 years time in its new just issued currency the dollar II? Upheaval of course but people would likely still trade with old dollars if allowed as in "I'll take $150 of your old dollar debt if you sell me that planter." Interesting how even a negative value is better than freezing a zero value or zeroing out because it preserves the vestment or sunk cost future expectation interest.
Continued in next post