By J.D. ALT
Whenever I get frustrated—which is quite often these days—I vent some steam (and feel somewhat better) simply by imagining a response that Bernie Sanders, Elizabeth Warren, or Alexandria Ocasio-Cortez might give to some conservative pundit when they say, “Yes, but that’s going to increase deficit spending beyond anything imaginable!”
REPLY: “Excuse me, Anderson, I don’t use the term ‘deficit spending’ because it suggests or implies something which is demonstrably not true. It implies that when the federal government spends more dollars than it collects in taxes it is creating a debt that it will have to repay in the future. This is factually not the case. If the government spends three dollars and collects one dollar in taxes, it creates a ‘net spending’ of two dollars. It’s as simple as that.
And where does the ‘net spending’ go? It goes into the pockets and bank accounts of the American people—the citizens whose goods and services are paid for with federal spending. To imagine those two dollars must be ‘paid back’ to somebody in the future is delusional. Who would they be paid back to?
Now then, does all this mean that you or I—or General Motors—can ‘net spend’ the same as the federal government? The answer, of course, is NO! We cannot. So why can the federal government ‘net spend’ while we, ourselves, can’t? The answer, again, is simple: We can’t ‘net spend’ because we’d quickly run out of dollars for spending. The federal government, on the other hand can’t run out of dollars because it is the one who creates dollars in the first place. Where else do you think fiat-dollars come from? Do you think we mine for them, dig them out of the ground, discover them in green-rich veins of rocky earth? NO! The federal government issues them. In most cases, they’re not even printed, they’re simply issued as numbers on an electronic balance sheet. That’s how modern U.S. dollars come into existence. After that, the federal government collects some of those dollars in taxes. And then it spends whatever Congress decrees it needs to spend. If it happens to spend more than it collects, that’s ‘net spending.’
Now, there have to be rules about this, right? There must be controls—checks and balances—over these operations. We have to manage the whole process carefully, and monitor it continuously, so the federal government doesn’t issue more fiat-dollars than the real production of goods and services can absorb. If that happened, market prices could be destabilized, and inflation could get out of hand. So, it’s not something to be taken lightly.
At the same time, however, if a democratically elected Congress decides the federal government needs to spend dollars to accomplish an important public good or collective goal, is it logical to say, ‘No, we can’t do that because there aren’t enough dollars’? That is the most illogical thing you could propose. There can always be enough U.S. fiat-dollars.
If American commerce decides to grow, and U.S. banks decide to expand credit to accommodate the new businesses and new employment and new consumer purchases, does the Federal Reserve say, “Sorry, there aren’t enough dollars to do that”? No. The question doesn’t come up. No one is screaming about creating money to finance private commerce. So why are we screaming about creating money to finance public commerce—the public good?
In each case, American businesses and citizens get paid dollars to produce goods and services. So why is one case—private commerce—great and wonderful, while the other case—spending for the public good—a disaster?
The only question that’s pertinent is whether there are enough REAL resources—labor, technology, energy, materials—available for the dollars to buy to accomplish both the goals of private commerce and the goals of the public good. If the answer is “Yes,” the dollars can be issued and spent without pushing up inflation.
So, please, don’t talk to me about ‘deficit spending.’ I’m tired of hearing it, and it just takes our attention off the real things we need to get done.
Now let me interrupt before you even ask your next question, because I know what it’s going to be! What about all the treasury bonds the government issues and the interest it must pay on those bonds? My answer is: don’t worry about it. Treasury bonds are simply a tool to manage the future cost of money in the financial system. The Treasury and the Fed coordinate to do this. It’s tied to interest rates, which are tied to bank profits, which are tied to the planning of private commerce. Treasury bonds do not constrain the creation of money, they facilitate it.
Someone has told you that the government is going to go broke, that financial markets are going to stop wanting treasury bonds, that someone is going to show up on our grandchildren’s future doorstep and demand twenty trillion dollars in back pay. Well, so long as the U.S. government stays in business, it’s not going to happen. And if the U.S. government goes out of business, it’ll be the last thing our grandchildren will be worried about.
So, please, let’s stop talking about all this scary going-broke stuff, and start focusing instead on what we need to undertake and accomplish so our grandchildren will even have a livable world to exist in!”
I wish I could put economic concepts as simply and clearly as that! Thanks.
Can you show this to Dianne Feinstein?
Excellent! The words matter!
Next: Calling out “development” (more accurately) as land speculation.
“So, please, let’s stop talking about all this scary going-broke stuff, and start focusing instead on what we need to undertake and accomplish so our grandchildren will even have a livable world to exist in!” Wouldn’t that be a thrillingly hopeful conversation? It’s been apparent for several decades that our global capitalist system, our very way of life, is ecocidal, and that the plunder and pollution of the biosphere, leading to inevitable collapse, is already well-underway. Insects, anyone? So what do we keep talking about incessantly/obsessively in this age of exploding information and opinion? Everything BUT potentially viable alternative economic systems that we might shift into before the rapidly dimming lights go out. And even when we do allude to broad systemic alternatives, usually as throw-away lines in our commentary, we advocate only incremental, obviously inadequate steps toward the vaguest of visions for a better, more beautiful, more viable world. Some time ago, I lost interest in this mental masturbation and began to search for a serious thinker who not only incisively criticized the existing economic order but also put a new one on the table in vividly concrete detail. So far, I’ve been able to find ONE such thinker, and I had to go back to the late 19th Century to hear his voice. If there are other voices out there, past or present, who speak with clarity and precision about alternative economic systems that may lie within our grasp, I’d love to know about them.
https://www.counterpunch.org/2018/11/19/on-earth-as-in-heaven-the-utopianism-of-edward-bellamy/
Newton Finn, thanks for this comment–and for the link to your essay re: Bellamy, which I’ve just finished and found very thought-provoking. I’ve also just ordered his two books and look forward to reading them.
A very good and rational answer JD, if the politicians and pundits ever get to understand how “money” is created and who has the authority to create it.
The only thing that is not explained is your comment about bonds being “simply a tool to manage the future cost of money in the financial system”. The question is, where does the financial system get the money to buy the bonds in the first place? I can understand that it isn’t a problem for a monetary sovereign nation to pay the interest, or even come up with the “money” to redeem the bonds when they mature, but it is the initial purchase that needs to be explained, bearing in mind the stupendous amount of “money” we are talking about.
Although it may not be common knowledge, it is certainly well known that the financial sector simply creates “money” every time it makes an interest-bearing loan. Apart from the Government allowing this practice to continue, as far as I know, the Government does not directly fund the finance sector, except when it gets into trouble and QE is required to keep the sector afloat. What the banks don’t do directly, is create the interest needed to be paid in addition to the principle loan. It seems to me that the only way the interest can be acquired by the borrower is from the ongoing increase in the “money” supply that is created by the continual need of the financial sector to keep making loans. It is that ever-increasing lending that provides the capital for commerce, which results in the wages the borrower needs to repay their loan. Is this a rational assumption JD?
Graham Paterson, I ponder your questions every day, and have tried to address them to some degree in recent essays. I’m sure I’ll continue to ponder them as well. I’ve come to refer to it as “being in the weeds.” There’s a lot of interesting stuff in there to discover and understand—but, of course, the road-maps and tour-guides provided by “economists” are mostly unfathomable, often leading to swampy bogs it’s easy to get lost in. I, too, would be most appreciative of a simple explanation of the operation whereby private commerce comes by the dollars with which it pays the interest on its bank-loans. But it’s also possible, I think, to make useful observations and arguments without going into the “weeds” at all (as I’ve tried to do in this essay)—to say, in effect, it doesn’t matter how it works; all that matters is to understand that it works.
I am not sure I can agree with you on that one, JD. I think it matters very much how it works, which, I believe, if you ask anyone who is swamped in debt and has their house repossessed when they can’t make the mortgage repayments. Sure, the system works, but for whose benefit does it work? As any borrower knows, the compound interest on a conventional home loan over a 25 year period will amount to something like 200% more than the original amount borrowed. Given a good paying job and regular employment, this additional imposition can be managed, but for a lot of people in this day and age, a “good” job and “regular” employment is becoming increasingly difficult to find let alone guarantee.
200% is a lot of additional money that has to be found from somewhere in the system and, despite Creigh’s assumption that the Treasury provides it in the form of “reserves” that simply doesn’t make sense. I’m sure it isn’t the Government that is continually increasing the money supply to the banks, but if it is, then it comes back to my earlier assumption, that the banks have to continue making loans in order to get those “reserves” into the hands of the borrower so they can make the interest payments.
I guess it comes down to whether the private banks do actually work on the fractional reserve system or not? The Governor of the Bank of England has recently confirmed that the banks do work on that system and they do create new money every time they make a loan. It is unfortunate that the Governments around the world allow this to happen.
Graham, when we’re talking about money creation, it’s important to understand the distinction between state money and bank money, or as some refer to it, exogenous and endogenous money. (I don’t use those last terms because I can never remember which is which.)
State money is what we normally think of as money; it can be in the form of paper notes and coins, deposits at the Central Bank (aka reserves) or Treasury bonds (think “future money”). Answering the question of where money comes from to buy Treasury bonds, either you or someone on your behalf must come up with Central Bank reserves. Similarly, in order to pay taxes, either you or someone on your behalf must come up with Central Bank reserves. Since individuals don’t have accounts at the Central Bank, payment takes place through commercial banks, which do have accounts at the Central bank and hold reserve balances there.
The “bank money” you have on deposit at your commercial bank is not quite the same as state money. A commercial bank deposit is not a pile of paper notes in a vault somewhere with your name on it; it is really only a promissory note from the bank that is payable in state money to you or to someone else on your behalf. This is true whether the deposit results from a loan the bank extended to you or from funds you have brought to the bank for deposit.
If you write a check against your deposit in favor of the Treasury for a bond purchase or a tax payment, your bank subtracts the amount of the check from what it has promised to pay to you, but the Central Bank settles the transaction by transferring Central Bank reserves from your bank’s account at the CB to the Treasury’s account at the CB.
Commercial banks create “bank money” by creating promissory notes out of thin air, payable in state money. They do this when they make loans or when they accept funds for deposit. There’s nothing real magical in this process. Banks, corporations, and individuals create promissory notes payable in state money all the time. In fact, you do exactly that when you sign that little credit card slip that says “promise to pay, yadda yadda, terms and conditions, etc. etc. and then walk out with merchandise under your arm. The only difference between you and the bank is that the bank has a bit more credibility.
Where does the financial system get the money to buy the bonds in the first place?
The Treasury pays the private sector for goods and services and pays benefits and interest with reserves. Some of those reserves are used by the private sector to buy Treasury bonds.
You may ask, where does the Treasury get reserves, since by law it can’t get them directly from the Fed. The Treasury accepts reserves from the private sector as payment of taxes. Since tax receipts generally don’t cover all the spending authorized by Congress, the Treasury makes up the difference by issuing bonds and selling them to the private sector, accepting reserves as payment. The Treasury pays both the tax receipts and the bond sales receipts back to the private sector as spending authorized by Congress.
At this point, the private sector has now received the reserves it used to pay taxes + the reserves the Treasury got from bond sales – what it spent on bonds, and it is holding the bonds. The reserves the Treasury got from bond sales – what the private sector sent on bonds = 0, so the private sector now has its reserves back + the bonds.
One more step: if the private sector wants more reserves it can sell some bonds to the Fed for new reserves. If the private sector wants fewer reserves and more bonds, it can buy them from the Fed. The Fed, for its part, buys and sells Treasury bonds as part of its interest rate policy.
Go through a fiscal cycle step by step, for the private sector (PS), Treasury (T), and Fed (F). List fiscal positions for each at t0 through t5. This would be clearer with T-accounts, but I don’t think I can do them in comments. In this analysis, bonds are liabilities of the Treasury, assets to everyone else. Reserves and cash are liabilities to the Fed, assets to everyone else. Notice that at all times we meet the accounting constraint that every asset must have a corresponding liability somewhere (all assets – all liabilities = 0, always). We start with some plausible initial conditions:
At starting point t0:
PS Assets:$100Reserves, $10Cash, $500Bonds
PS Liability:0
T Assets:0
T Liabilities:$610Bonds
F Assets:$110Bonds,
F Liabilities:$100Reserves, $10Cash
t1: Congress authorizes $10Spending and $9Tax ($1Deficit)
PS Assets: no change
PS Liabilities: +$9Tax payable
T Assets:$9Tax receivable, $1Bond(created out of thin air to cover deficit)
T Liabilities: $611Bonds
F No change
t2: PS pays $9Reserves to the Treasury for tax, buys $1Bond
PS Assets:$90Reserves, $10Cash, $501Bonds
PS Liabilities: 0
T Assets: $10Reserves
T Liabilities: $611Bonds
F No change
t3: Treasury spends $10Reserves buying goods and services from PS
PS Assets:$100Reserves, $10Cash, $501Bonds
PS Liabilities: 0
T Assets: 0
T Liabilities:$601Bonds
F No change
t4: PS decides it wants $1 more reserves, sells a bond to F:
PS Assets:$101Reserves, $10Cash, $500Bonds
PS Liabilities: No change
T No Change
F Assets: $111Bonds
F Liabilities: $101Reserves, $10Cash
t5 (end): As a result of the $1Deficit, PS has $1Reserves more or $1Bond more, at its preference.
Error at t3: Treasury liabilities should be $611Bonds, not $601Bonds. JD, if possible fix the error and delete this msg.
Go through a fiscal cycle step by step, for the private sector (PS), Treasury (T), and Fed (F). List fiscal positions for each at t0 through t5. This would be clearer with T-accounts, but I don’t think I can do them in comments. In this analysis, bonds are liabilities of the Treasury, assets to everyone else. Reserves and cash are liabilities to the Fed, assets to everyone else. Notice that at all times we meet the accounting constraint that every asset has a corresponding liability somewhere (all assets + all liabilities = 0, always). We start with some plausible initial conditions:
At starting point t0:
PS Assets:$100Reserves, $10Cash, $500Bonds
PS Liability:0
T Assets:0
T Liabilities:$610Bonds
F Assets:$110Bonds,
F Liabilities:$100Reserves, $10Cash
t1: Congress authorizes $10Spending and $9Tax ($1Deficit)
PS Assets: no change
PS Liabilities: +$9Tax payable
T Assets:$9Tax receivable, $1Bond(created out of thin air to cover deficit)
T Liabilities: $611Bonds
F No change
t2: PS pays $9Reserves to the Treasury for tax, buys $1Bond
PS Assets:$90Reserves, $10Cash, $501Bonds
PS Liabilities: 0
T Assets: $10Reserves
T Liabilities: $611Bonds
F No change
t3: Treasury spends $10Reserves buying goods and services from PS
PS Assets:$100Reserves, $10Cash, $501Bonds
PS Liabilities: 0
T Assets: 0
T Liabilities:$601Bonds
F No change
t4: PS decides it wants $1 more reserves, sells a bond to F:
PS Assets:$101Reserves, $10Cash, $500Bonds
PS Liabilities: No change
T No Change
F Assets: $111Bonds
F Liabilities: $101Reserves, $10Cash
t5 (end): As a result of the $1Deficit, PS has $1Reserves more or $1Bond more, at its preference.
Creigh Gordon, thanks for weighing in with these explanations. Much appreciated.
(I, too, can never remember which is which between “endogenous” an “exogenous”!)
Speaking of new wordology, I often wonder why government “spending” (G) is called “spending” and why G-T is called “net spending.” Households must balance their spending and saving against their earnings, etc. A sovereign government is not like a household, etc. Yet even MMT maintains the terminology whereby its taxing is like its earning (revenues) while its spending is, well, spending. That is misleading.
Tax dollars are burned; they don’t fund anything; they are not revenue for the government. They are just taxes, taking money out of the economy and disposing of it. They are not “earnings” for the government.
Similarly, G is not anything like government “spending.” G-dollars are dollars put *into* the economy and distributed for specific uses, extending credit to various parts of the economy but otherwise not using that credit itself. I would call that “funding,” not “spending.”
Note then that G-T would be “net funding.” If G>T, more funding than taxing, then … well, okay. It has nothing to do with expenditures minus earnings. Household bookkeeping principles are irrelevant. And the so-called “national debt” is not an accumulation of annual expenditures minus earnings. It is more like an odometer on your car, measuring how much net funding has been accomplished over time. All else being equal (stable prices, etc.), it’s okay if that number is large. It’s a positive feature of the economy, not a negative bug.
If we could just use the right words, it might be easier to tidy up our thinking.
Here is a draft resolution presented to a Canadian party:
*The Green Marshall Plan*:
Bail out the planet with central bank money creation – The Green Marshall Plan
In 2008, literally TRILLIONS of dollars in various currencies were created by central banks to bail out “banksters”, failed corporations, even lawbreakers who were never punished (except in Iceland). If those who cause ecological destruction and loss of natural capital value for us all can be bailed out with large scale new money creation, then certainly central banks can help “bail out” the species, climate & biosphere they have done so much to compromise.
Whereas: A) The right to create money belongs to the citizens, but has been “contracted out” to irresponsible entities that have participated in creating a vast ecological debt.
Money creation that helped caused the ecological debt must be used to help repay that debt. If not, then we have a moral hazard of money creation leaving a negative ecological footprint without thought to retribution for all species.
C) According to academics including professor Mark Z. Jacobson, the technologies exist to cost competitively replace fossil fuels now, in 2016 [https://www.ted.com/speakers/mark_z_jacobson (TED talk)] Thus the moral obligation implement these proposed solutions immediately on a large scale. Green infrastructure paid by new money prevents resistance from those otherwise forced to pay for it.
D) If the money creation rights are more flexible and can be exploited to reverse ecological damage and restrict expansion of emissions, then we have a moral duty to use them for that immediately because we are at the tipping point of a runaway greenhouse effect.
F) With green infrastructure projects come new jobs, a larger tax base, savings from efficiency that will be put to use expanding the economy instead of expanding extraction of fossil fuels. In combination, these will grow the economy, increase the well being of citizens.
H) When the money created is used as above, some sources call this “green quantitative easing”: [http://www.financeforthefuture.com/GreenQuEasing.pdf Green QE]
As a cause of inflation, efficiency-focused or “green” money creation is debatable. No claim that money creation in and of itself guarantees inflation is credible.
Countries engaged in large scale quantitative easing (QE) have not experienced problem inflation. Nor have countries like South Korea that focused its 2008-9 stimulus on energy efficiency measures.
J) Better energy efficiency, reduced fuel use and reduced pollution abatement must reduce long term costs. That “reduces” inflation, as inflation is measured against a basket of actually used goods. If we require less fuel, and get more for less, then actual value received for money is increased.
L) Created money creating genuine progress across whole societies reduces expenditures otherwise required for the same amount of genuine progress. Resulting cost reduction is a solid counter to a generic inflation argument against GPI money creation.
M) Ratified Green Party of Canada policy exists that Greens advocate the BoC return to a prominent role in creating money for value and not just to satisfy arbitrary inflation or debt-to-GDP targets. That means, among other measures, creating additional money.
N) The *risk-reward ratio” of reducing carbon vs inflation risk is in favour of reducing carbon. The ecological or natural capital of the biosphere, or indeed any ecosystem within it, is the root of all wealth.
O) Green MPs in England have asked the Bank of England to consider green QE. Mark Carney, the Bank’s governor has stated a scenario where that may happen. Greens in at least Canada, the UK, Australia, New Zealand, the USA, France, Germany, Italy, other EU nations are urging similar measures. G7 and G20 and BRICS countries are also updating their policies to respond to V-20 and COP21 concerns. Canadian Greens should be among this chorus.
Therefore: Green MPs and the GPC will advocate for BoC money creation to offer interest free (or sovereign interest level) loans and grants for green infrastructure and efficiency projects that also increase resilience. Such projects may include the creation of for profit crown corporations that build own and operate infrastructure and efficiency projects. Green MP’s and the GPC will advocate The Bank of International Settlements support all central banks under it’s structure engage in sovereign coordinated Green Marshall Plans. A royal commission will be established to determine the feasibility of creating such crown corporations in given fields of expertise and offer a plan for a virtually carbon free Canada. The royal commission would create specific objectives and operating procedures the green crown corporations. Grants to crown corporations will take preference over any grants to private interests. One example of a green project, which could be owned by a crown corporation: fast electric vehicle charging stations based on stored renewable energy as an incentive to shift to EVs.
Constantine Kritsonis
P.S. The Facebook group supporting this initiative is here, please notify you eco contacts. https://www.facebook.com/groups/1111509175543715/
Graham Paterson: My initial response to your comment was inadequate. I apologize. Indeed, what you posit with regard to how dollars for interest payments are created has made me suspiciously curious on two counts: First, why is market capitalism so obsessed with “growth”? And, is that obsession (the need to constantly grow debt to cover interest payments) what makes it impossible for us to strive for a steady-state economy that consumes only renewable resources? Back in the “weeds” we go!
I have just offered an answer to a question on Quora about “growth” – the question was – “Since most economic models are based on continuous growth, is this practice not shortsighted given the finite resources and space we have?
I have, in fact, given a lot of thought to this question of “growth”, hence, I apologise for the length of my answer as follows –
“Very much so, Henry, but what is the alternative? So far, no economist has come up with a viable alternative other than the minuscule effect of recycling. Compared to the vast amount of resources used for production the amount that is recycled is very small.
Economic growth is seen as the absolutely essential ingredient for virtually every endeavour of mankind. It really doesn’t matter what the economic system is, capitalist or socialist or something else, every economic system has to try and cater for an increasing population. It seems to apply to every nation in the world, and every market, no matter what product is involved.
The alternative is portrayed as too horrendous to imagine. At best we have stagnation, the second worse is a recession and the worst of all is a depression. None of these possible events are natural; every one of them is man-made. If man can make them, then man can unmake them. Each of these supposedly inevitable outcomes is related to “money” but just as crucial, they are also related to people.
So, maybe the time has come to ask, why is economic growth such an unquestionable given? Surely there must be a limit to how much growth is possible. Just exactly what is this “growth” that is the object of so much lust? Does it all boil down to making a profit? In today’s world, making a profit seems to determine what can happen and what can’t, even in the public sector as well. When we get down to its fundamental base, that base is consumption because it is only consumption that creates the profit – production, per se, does not create a single dollar of profit until the production is consumed. So, how do we grow consumption? Basically, there would seem to be only two ways to achieve this. One is to have the individual customers buy more products, and/or upgrade their existing ones. The other option is to have an increase in the number of individual customers. The first option is largely in the too hard basket and has a limited scope as a guaranteed way to achieve growth. For example, who wants to buy two fridges when one is enough for the household? Catering for increasing populations is a much more reliable way to travel on the highway to growth heaven or growth oblivion.
This is where we run into the “taboo” question. Bearing in mind we only have this one planet to live on, and that planet has limited resources, as well as limited space for habitation, is there a limit to how many people the planet can feed and accommodate? If either of these factors can be evaluated, then it means there has to be a limit to economic growth at some point in time.
What’s going to happen when that time comes? No answers? That definitely puts it in the too hard basket.
I guess the same could be said for the population growth. When is enough, enough? And who decides? And what happens when we reach that point in time? How do we stop the population from growing? Currently, we the people, are adding some 80 million people to the world’s population every year. How do we stop that? Actually, it will be too late to really do anything about it when we reach the point in time when enough is enough. Can you imagine the wholesale culling of 80 million “unnecessary” people to stop the numbers increasing? In 2014 the UN calculated that the earth’s population will rise to 11 billion by 2100 from the current 7 billion. Is it this population increase that will “guarantee” growth for our economic systems?
What needs to be examined is, if it might be possible to develop a form of sustainable “growth” we can live with. Probably in the too hard basket?
I am glad we finally started talking toward the end of this thread about growth. The passages in Mr. Alt’s post that caught my eye — and these are the ideas I struggle with every time I come to this site — are
1. “We have to manage the whole process carefully, and monitor it continuously, so the federal government doesn’t issue more fiat-dollars than the real production of goods and services can absorb. If that happened, market prices could be destabilized, and inflation could get out of hand. So, it’s not something to be taken lightly.”
2. “The only question that’s pertinent is whether there are enough REAL resources—labor, technology, energy, materials—available for the dollars to buy to accomplish both the goals of private commerce and the goals of the public good. If the answer is “Yes,” the dollars can be issued and spent without pushing up inflation.”
3. “Treasury bonds are simply a tool to manage the future cost of money in the financial system. The Treasury and the Fed coordinate to do this. It’s tied to interest rates, which are tied to bank profits, which are tied to the planning of private commerce. Treasury bonds do not constrain the creation of money, they facilitate it.”
This latter is actually the key concept I think you need to be promoting, but even here the difficulty that is lightly passed over in the first to passages is lurking in “the planning of private commerce.” Apparently this is not the “invisible hand,” but what is it? I never see much conversation here about what “management and monitoring” would look like.
To me it seems the likely answer to the “taboo question” mentioned by Mr. Peterson is the Four Horsemen.
2.
We need to ensure that the fear expressed in the comment of Mr. Willis never comes to fruition .
We must not allow product production to become viciously dominated by production of the money product.