I don’t believe that growth can be regulated to zero in the private sector in America, or any nation accepting capitalism. With the power to spend currency into existence and to tax it out of existence without restraints from revenue, the government can direct investment toward less consumption. As you well know, our extraction greatly outweighs our actual consumption due to the durability of the status quo production/distribution models.
Only the currency-issuing government can reward and punish models in the macro to achieve a steady state extraction while still allowing for growth via efficiency. It can simply subsidize beneficial models and processes for whatever time necessary to allow the economy of scale to bring costs into equilibrium or extract profit from unbeneficial profits via taxation. Currently, we are doing this backward to preserve jobs in the private sector and subsidizing any subsequent costs such as pollution, as externalities that are socialized.
Once we realize that inflation is not a direct consequence of creating currency but a relationship between currency and potential resources we can free up spending policy and make the government the employer of last resort with a job guarantee. Decentralizing the management via grants to state and local government to support the job guarantee will also decentralize much of our production and shorten supply chains by making local producers competitive with the mega-corporations.
We simply have to define what jobs we will subsidize in a way that benefits, or makes equal, such things as farmer’s markets and regional food production. This means admitting the failure of markets to determine best outcomes, but I believe we are well past that point already and only the threat of higher prices keep us locked into the current destructive model of privatizing profits while socializing costs.
However, if we accept that the government must “get” money to spend then it becomes much more difficult to reward/capitalize beneficial growth and punishing non-beneficial growth has always been politically difficult. Much of this problematic dynamic is due to a misunderstanding of our monetary system that positions the government as a competing “user” of currency and vilifies the creation of currency in excess of what can be taxed as “debt”.
Mistaking the purpose of taxation and bond issues as “revenue” instead of simple inflation control for a currency issuer that neither needs nor uses revenue is the common source for most misery in this economy. Both destroy previously created currency, not recycle it to current spending. “ALL” spending at the federal level is accomplished by the creation of new currency and “ALL” collections are destroyed by the debt entry in the government sector that created the currency used to pay obligations to the federal government.
It is simple dual entry spreadsheet accounting and it makes our currency a single use commodity that is available at no cost to Congress to shape the economy, limited only by available resources and inflation. This makes all misery or benefits to destructive processes that can be mitigated by additional money creation and proper distribution strictly a political decision, not economic. The world of economics changed completely in ’71 when we left the gold standard and fixed exchange rates that limited our currency use, but little notice was given to the change by Congress that still functions as if we were limited by revenue.
