Vintage Things That Have Disappeared In Your Lifetime?

[LizzieMaine]

A Confederate fifty-cent piece sold for over $600,000 a few years back. That'll buy a lot of sorghum.

 

[BlueTrain]

Not that much.

 

[Stanley Doble]

War bonds weren't needed to finance the war. They were to soak up excess buying power and control inflation.

 

[BlueTrain]

Which war are we talking about?

 

[Fading Fast]

...Whatever you want to call them, bond sales to finance a war are an approach I support -- people feel differently about war when they feel like it's coming directly out of their own pockets. We need 10 percent of your gross income, buddy, skimmed right off the top. Yeah, you, get yer hand out of your pocket and shell out. "Bonds and Taxes, Bonds and Taxes, That's The Way To Beat The Axis!"

I applaud the spirit of your War Bond comment. Whenever it can be done honestly (meaning the cost of something can be transparently linked to its revenue source without accounting gimmicks), I like when any gov't program is more open about and shows the direct links between its costs and revenues.

Again, if run honestly, I like toll roads - let the people who drive on them pay for their maintenance. I like that Social Security has a tax directly identified with its funding and, IMHO, if the program is going bankrupt as we are told it is - then either raise the tax or cut the benefits (don't do behind-the-scenes chicanery) so that the public can see the impact of the decisions. If the Baby Boomer want higher SS benefits, then let that Millennials see that they are paying for it in their paychecks (via higher FICA deductions) or vice versa.

Otherwise, it all becomes one big amorphous stew where we fight over what we want - more of this program, less of these taxes - without an honest discussion of costs and benefits.

 

[BlueTrain]

Well, you should be gratified to learn that around here where I live, most of the new road construction is of toll roads. I suppose the link is greater that way than the old way of taxing gasoline. The problem with Social Security that is objectionable to some people and always has been, is that half of the tax is paid for by employers. A few years ago for some obscure reason, the employer's tax portion was lowered for a year and I don't know how that was supposed to help anything. Apparently no one realizes that many people do not get paid enough to finance their own retirement and for that matter, even to be good consumers, even though Wal-Mart seems to be doing okay nevertheless.

All of this logic can be applied to schools, too, you know. No one has a right to a free education, although it just might be good public policy, not that that has ever counted for anything.

 

[Fading Fast]

Well, you should be gratified to learn that around here where I live, most of the new road construction is of toll roads. I suppose the link is greater that way than the old way of taxing gasoline. The problem with Social Security that is objectionable to some people and always has been, is that half of the tax is paid for by employers. A few years ago for some obscure reason, the employer's tax portion was lowered for a year and I don't know how that was supposed to help anything. Apparently no one realizes that many people do not get paid enough to finance their own retirement and for that matter, even to be good consumers, even though Wal-Mart seems to be doing okay nevertheless.

All of this logic can be applied to schools, too, you know. No one has a right to a free education, although it just might be good public policy, not that that has ever counted for anything.

I agree - and realize now one line in my post misrepresents my thoughts. Yes, toll roads bring the cost nearer the users, and I do like this, but there are "public goods" like education (and roads) that we all need to fund whether we use them or not (I don't have children but am happy to pay taxes for public education).

I was trying to avoid my post being political - about whether more or less of this is that is good or bad - but as an overall guiding principal of process not politics. So, where possible, I do like gov't transparency so that we all see costs and benefits of gov't programs. I don't own a car, but am fine paying for infrastructure, but again, if we can, showing some direct link, IMHO, that focusses the minds of all of us versus the gov't becoming just a big opaque "pot" where we all try to get the most out of it that we can.

Again, I'm not arguing for more or less of this or that gov't program or tax, just discussing process and transparency, but if this is too political - I completely understand if the moderators want to delete the post.

 

[BlueTrain]

Sometimes you have to take a step or two back and ask why we have government to begin with. Make no mistake, there will always be government and in this country, it comes in layers. Then you ask if it's the kind of government you want but you also have to realize that someone else may have their own ideas that are slightly different.

 

[HudsonHawk]

I'm guessing that a genuine Confederate one-dollar bill would fetch considerably more than a buck today.

I'm reminded of that John Huston line in "Chinatown." You know, the one about certain things becoming respectable if they last long enough.

I think most genuine CSA paper bills range anywhere from about $1 to about $500, depending on condition. Smaller denominations are worth the most relative to face value, but not all that much. A $2 bill might fetch $20 today, as would an genuine $20.

The problem with Confederate money is that there is so much counterfeit stuff out there, and not just recent fakes. Counterfeiting during the war was rampant, including by the US government, who counterfeited CSA bills and flooded the South with them as a way to destabilize the economy. So it's as likely that you have a counterfeit bill produced in 1864 as you have a real bill produced in 1864.

 

[LizzieMaine]

That's similar the situation with coinage during the colonial era -- there was so little real, legitimate currency available that the colonies were flooded with counterfiets, especially small-denomination coins needed for everyday transactions. The overwhelming majority of extant British halfpence dated in the mid-1730s are counterfeits -- they were being churned out at short weight for many years after that date by sharp operators in the colonies. I have one of these counterfeits, and it obviously had extensive circulation despite not being real.

 

[vitanola]

War bonds weren't needed to finance the war. They were to soak up excess buying power and control inflation.

Yes, but not just soak up excess buying power, rather soak it up and preserve it for use during the expected Post-War Depression, after industry reconverted to civilian production. The War Bonds pretty well worked just as Morganthau hoped, preserving excess wartime purchasing power to be released in a flood of consumer spending in 1947, 1948 and 1949. The expected return of the Depression was utterly swamped in this flood of buying power. Instead of renewed depression we experienced the minor and brief recession of 1948-9, an eleven month long downturn with a contraction of GNP of but 1.5% and unemployment which never exceeded 7.5%, then off to the races again.

 

[BlueTrain]

Okay, so somebody explain why war bonds weren't needed to finance the war and if not, how did we finance the war?

 

[HudsonHawk]

Okay, so somebody explain why war bonds weren't needed to finance the war and if not, how did we finance the war?

War bonds were critical to financing the war. They had the added benefit of removing cash from the public, countering inflation from a shortage of goods, as well as providing post-war spending power, but the cash the bonds generated accounted for something like 75% of the military spending during the war. Without domestic borrowing, the government would have had to generate funds through taxes, printing money, selling assets, etc.

 

[BlueTrain]

If government could finance itself by simply printing money, there would be no need for taxes at all, would there? Think about it: how many people here get paid in cash? I realize it was more common then, but when the government bought a new battleship, they didn't drive across town with a truck full of cash. They wrote checks for things like that. These days, it would be by a wire transfer.

Cash is still always welcomed, of course, but the government doesn't work that way. In fact, it's very suspicious of those who deal with large amounts of cash.

 

[HudsonHawk]

If government could finance itself by simply printing money, there would be no need for taxes at all, would there? Think about it: how many people here get paid in cash? I realize it was more common then, but when the government bought a new battleship, they didn't drive across town with a truck full of cash. They wrote checks for things like that. These days, it would be by a wire transfer.

Cash is still always welcomed, of course, but the government doesn't work that way. In fact, it's very suspicious of those who deal with large amounts of cash.

A government can't "finance" itself that way, but it can quickly buy a few things before the inflationary effect catches up to them. Putting more money in circulation temporarily increases the short-term buying power of whomever has it. This, of course, is not a sustainable model, but it was one option available to the government during WWII. They chose to mainly borrow the money from the savings of the public in the form of war bonds. This not only generated income, but held off inflation by removing money from circulation at a time when they knew goods and services would be more scarce. It also meant that after the war the public had a large of amount of money to spend to ward off depression, where goods and services were available but cash was short.

 

[BlueTrain]

Ultimately, it was paid for with taxes. Borrowing by government is only a form of deferred taxation. It's just a matter of who pays the taxes and when. It was also paid for by the deaths of over 400,000 American soldiers.

 

[HudsonHawk]

Ultimately, it was paid for with taxes. Borrowing by government is only a form of deferred taxation. It's just a matter of who pays the taxes and when. It was also paid for by the deaths of over 400,000 American soldiers.

Ultimately everything is paid for by private citizens. "Government" only exists as a concept so far as people allow it and finance it. It has no assets other than what is procured for it by it's people. I guess I thought your question was a serious one about the mechanism for existing governments to generate large amounts of cash quickly in a crisis.

 

[BlueTrain]

Well, governments raise revenue by other means, including corporate taxes. But no one should think that everyone pays the same taxes. Sometimes, it is rumored, some wealthy people pay no taxes, as hard as that is to believe. But it seems that many people believe that the government can just print all the money it wants. Generating large amounts of cash isn't that easy either, you realize. But it is true that governments exist with the consent of the governed and in a sense, all countries are democracies, the only differences being in who gets to vote. Beyond that, of course, there are other differences in governments. In a sense, a homeowner's association is a form of government. Even though it exists with the "consent of the governed," it does not follow that everybody's happy.

All my comments here are serious. Believe as much of it as you care to and ignore the rest.

 

[HudsonHawk]

Well, governments raise revenue by other means, including corporate taxes. But no one should think that everyone pays the same taxes. Sometimes, it is rumored, some wealthy people pay no taxes, as hard as that is to believe. But it seems that many people believe that the government can just print all the money it wants. Generating large amounts of cash isn't that easy either, you realize. But it is true that governments exist with the consent of the governed and in a sense, all countries are democracies, the only differences being in who gets to vote. Beyond that, of course, there are other differences in governments. In a sense, a homeowner's association is a form of government. Even though it exists with the "consent of the governed," it does not follow that everybody's happy.

All my comments here are serious. Believe as much of it as you care to and ignore the rest.

I don't think anyone is under the impression that everyone is always happy with the government.

 

[Stanley Doble]

Another way of paying for a war is inflation. "Printing money" is old fashioned. They print government bonds, send them to the big banks, the banks "buy" them and credit the government's account. The result is the same but they are not "printing money" they are issuing debt with the added advantage to the banks of paying interest.

The money spent this way goes into the economy the same as if they printed the stuff and threw it out the window. The result is inflation. Prices of everything doubled between 1940 and 1945 in other words the value of the dollar dropped by half.