It really does work but for the irreducible accumulating loss. The Fed has to hold long dated bonds a little longer than is should to keep its balance sheet from tending toward net low, after accounting for one way Fed taxes. The Fed is an OK tax collectors, it is a reasonable one or two percent VAT.
But that irreducible loss causes the Fed to fall farther behind, over time, and the drag accumulates. That loss is no one's fault, that is the thing. It is irreducible, mall, accumulates and is unassignable with any rationality. It is an inherent cost of the Law, it is Treasuries responsibility and the only fair tax is a small double spending budget with variability.
Revenue sharing then, separately, removes the government wobble and the fiat bankers can be set free and fiaters can deliver a smaller, more reasonable fixed VAT, maybe a quarter point. Then you know the inflation tax, between a half point to a point and a half. The GDP variation in the inherent wobble is a bit over a point of GDP. Revenue sharing needs to be about 300 billion a year, a good number.
This was actually the plan in the 70s, remove the government wobble. What they missed in the 70s was the time needed rebuilding the commodities markets after the sudden exit from gold. Nixon pointed this out, the idea was to pull a Roosevelt and manipulate the gold market a bit to our favor. But the liquid FX market took over. The whole trend of the last 45 years has been dissipating the shock because Nixon never found a dampening effect. The plot was done overnight, after drinks at the Oval office. But Congress was aware, they had voted for a devaluation, no one knew how to do it without a gold repricing.
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