Re: Minnesota Transportation Act?
[quote=Thomas Hedin] If you wanted pocket cash, the you could take that check and purchase legal tender (Federal Reserve Notes or U.S. Coinage). [/quote]
So, what is created is not cash (M1?) but a bookeeping entry that is freely convertable into cash (M2?), would be demoninated in U.S. Dollars, payable in Federal Reserve Notes, and is therefore the equivalent of cash to any person who has a credit in their account.
Since the bookeeping entries are freely convertable into cash, then essentially cash is being created. This raises once again my observation in post 32, that the creation of this money affects those in other states. Nobody could seriously argue that if we credited one million dollars to the checking accounts of every person in the nation, that it would not result in inflation, just as if we had handed out the money itself. The money created by the MTA would therefore have the potential to be inflationary.
How is the production of money to be controlled so as to avoid the undesirable consequences of inflation, and what assurances do other states have that Minnesota is properly managing the form of paper money which all of us must use? Why should Minnesota have the legal right to unilaterally devalue the currency, to an unlimited extent, without any representation from the people of the other states?