If you can make money by printing it (creating new accounts at the central bank to finance, for example, bad debts by overextending the rent) then you are less likely to make money by adding supply (which would reduce the supply of bad debt--and the need for government intervention--with sufficient income to demand it against disinflationary pressure). The TARP, for example, was an account created to manage the empirical value of the detriment created by the objective reality of financial panic.
The financial crisis of 2008 was an objective reality that, according to efficient-markets theory, was not supposed to happen.
The crisis, supposedly, was not predicted (and depending on how you measure it, non-retributive) because markets were efficiently unregulated and allowed to consolidate (which is supposed to reduce the need for government). Empirically, however, the quantum value of the detriment (the demand for government) is confirmed.
The supposedly unpredicted (and thus non-retributive) value the crisis produced was an accumulation of risk. That is, risk (unforeseen and thus unavoidable), not a well-defined business plan, created the new accounts (the public debt) necessary to abate the financial crisis of '08. According to the apologies of efficient-markets theory and the free consolidation of financial markets, the reason the risk got so big is because our economy is really big, which is really a measure of success despite the failure.
"De novo" monetary expansion (which empirically measures the gamma-risk proportion) occurred to control inherent market risk, providing a benefit (the bailout) that right-wing reactionaries now say is risk created "ex nihilo." It is no accident that, as the result of the crisis, any entity not too big to fail predictably consumes the risk by adverse selection (where the risk goes gamma and the consumer is consumed with debt, both public and private, on demand). The adversion, understand, is an extension of the rent.
Raising the economic rent by extension (by late-order effect) is the technical means by which your "self" is taken possession by the capital invested. What is "in" vested, understand, is your "self," positioned to take the risk, which becomes the evidence that measures your objective, self-determined reality.
Capital invested (and the gain--the adverse possession of your "self"--which is non-retributive and thus should not be taxed) poses as being determined by natural selection (as the President critically explained, for example, in reference to the Romney-Ryan budget plan). Your status position--the space you naturally, and thus non-retributively, occupy--is not by the deliberate determination of a power elite (who are naturally selected by avoiding the detriment you thus naturally, and thus positively, possess by law), but by the power of your own personal responsibility--on demand (by positive possession) and thus not attributable to anyone but yourself.
Your "self" is fully assumed to always be at risk "on demand" in a free market. "Demand" defines the empirical value of the risk and delimits your current status, positioned to occupy the space you know (you empirically experience) as objective reality. If the market is defeated by, for example, consolidation of financial markets so that the economy is working to finance banks rather than banks working to finance jobs, the empirical value of the risk that defines your "self" is determined by technical objective. The reality is whatever is being demanded (having the money to command risk and self-determine), and as long as the objective is to technically create new accounts instead of new jobs, the wealth created (the power to self-determine) is not new (de novo-ex nihilo) but derived by being adversely positioned for the detriment (the risk commanded by adverse selection).
Creating new accounts to monetize the debt is a kind of rent-to-own scheme fraught with adversity. The more rent you pay, the deeper you are in debt, but eventually the debtor ends up owning the bank, becoming objective reality (positive law) by adverse possession. A retributive reality will occur by means of adverse selection (natural law), conserving the value in historical perspective.
By creating new accounts (by creating more debt to finance the bad debt, which historically conserves the value derived), big business makes more money by expanding the supply of money because the expansion reduces the capacity to demand it (it causes the problem the new debt is supposed to resolve). The falling demand positions small business to consume the extended risk (Without first-order deconsolidation, deflationary risk increases the economic rent in late order, and at that point we are fully consumed dealing with the new crisis in the gamma-risk dimension. The "JOBS Act" the President just signed will do little to reduce the rent. It will not deliver us from the gamma dimension because the policy space is preoccupied with economy-of-scale modeling--the efficient-markets theory, that was used in the 1990's to repeal Glass-Steagall, for example.) Instead of a peaceful and prosperous pluralism on demand, monetary expansion yields the capacity to command it, and as history confirms, rulers are likely to expand the economic rent beyond the capacity of subjects to pay it, which then requires it be paid on command--an act of congress, for example.
The empirical value of demand economics is that adding supply makes it cheaper to buy than to plunder your way to prosperity. Unfortunately, however, the trend of monetizing the path to general prosperity has been reversed since the Reagan revolution.
If general prosperity is the objective, ensuring the welfare of the rich in priority is empirically disconfirmed. In the spirit of the Reagan revolution, however, Romney and Ryan, despite testing negative over and over again, nevertheless insist Reaganomics is "The Path to Prosperity."
As empirical value accumulated, it was necessary to interrupt the Reagan revolution with a distribution of the value in order to conserve it. Combining efficient-markets theory with a more progressive tax burden, an expansion occurred that resulted in a balanced budget.
The Clinton-era expansion operated with horizontal and vertical integration, however, to technically achieve the objective. While organizing to produce economy-of-scale profits can produce a lot of value to distribute by objective, it nevertheless accumulates retributive value in the gamma-risk dimension where it is technically managed on command.
Volatility during the Clinton administration was explained as "overdiversification," but nothing was done to resist it in priority because it does not fit (confirm) the working model (the objective reality) we have now. By commanding the necessary tax revenue that Ryan and Romney abhor, the "Clinton economy" relied on economy-of-scale profits (the creative-destruction inherent to allowing firms consolidate) to fiscally manage the externalities.
Despite the command dimension inherent to it, efficiently managing financial markets, for example, to surplus value (and reduce demand), and then tax the capital gained to balance the budget (and cause a distribution on command), relies on the empirical value of the popular vote to confirm it, nevertheless. The demand dimension is conserved and expresses as cumulative, gamma risk, which, paradoxically, conserves the need to command it as objective reality.
Bush v. Gore (confirming that value is conserved in historical perspective) reversed the counter-revolutionary trend to yield the record debt--the empirical value and the objective reality--we have today.
Economic growth in the 1990's was supported by taxing the accumulated surplus (what Republicans still hypothesize results in an economic crisis, like the Great Recession, which can be reversed, they say, by making the tax code more regressive so we don't punish the job creators). Value was not prevented from consolidating (and is not being resisted now) because it was being (and will be again) used to pay the rent.
Although using a model that empirically conserves the accumulated value, both Clinton and Obama have been branded as "socialists" because taxing the rich does not conform to an aristocratic identity. Instead, their brand of efficient markets serves to disconfirm an objective reality that has always been confirmed by conforming to the dictates of natural law, from which positive law (the Constitution, for example) is derived and our rights empirically endowed.
"We" are not legally sovereign (occupying space in our natural condition) if the right to self-determine does not verifiably obtain, and the empirical value of that objective is not verified if the value attained is taxed (adversely selected) by the sovereign to pay the rent.
Progressing the tax rate smooths out the stochastic oscillator that cyclically confirms power and status. Instead of positioning the lower classes to take the risk by adverse selection, power is structured to operate in a more on-demand dimension.
By not taxing the lower classes and overextending the rent, there is sufficient demand to resist the crisis of overproduction, but without deconsolidation it will not be prevented. The budget balanced in the 90's, and it will again, because adding supply on demand reduced government spending without reducing the capital gained to pay the rent (contrary to the Republican hypothesis).
Instead of a risk proportion that creates value from demand destruction, and constructs the command dimension as the probable, objective reality, a more effectively progressive tax code governs the job creators (and makes money) on demand. Contrary to the aristocratic image of reality, the rulers become the ruled when alpha risk occupies the objective, policy space.
What is disconfirmed for the majority of citizens, however, is confirmation of elite power and authority. Welfare for the rich tests positive again and again--it does ensure the path to prosperity. It would be illogical to throw it out because it works.
Keeping value consolidated means you have to rent it to use it, it is not an entitlement. You are renting the economic space you occupy and you can be evicted by the owners at any time to confirm the value of your objective reality.
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