First, thanks to an anonymous donor the ALS blog now has a new & easy to remember web address: alsblog.net
Second, It’s been a while… but finally the ALS poll question has been updated. The new question builds on one of the most persistent debates in the libertarian blogosphere “What is your preferred monetary policy?” This one should get Terje & GMB excited.
The possible answers includes the status quo of inflation targetting, where an independent monetary agency manages money supply to ensure a low & stable rate of inflation. This is the most popular position among mainstream monetary economists and is now accepted by most politicians.
One alternative that used to be quite popular (especially among Keynesians) was the idea of an activist monetary policy that aims to maintain full employment by increasing money supply (decreasing interest rates) when unemployment is high. In response, the “monetarists” argued for a fixed money supply rule to prevent politicians playing with the money supply and causing inflation. After some concerns about a variable velocity and credit multiplier (which means the government has only indirect and inaccurate control of money supply) the monetarists shifted their focus towards inflation targetting.
At the radical libertarian end there is free banking, which simply asks the government to play no role in money and allow the competitive marketplace to come up with a solution. The expected solution is a range of competing currencies with one being significantly more popular than the rest. It is assumed that this currency will needed to be backed by assets (to maintain the confidence of users), but this isn’t required. The private currency provider will likely use fractional reserve banking to make more money but will have an incentive to maintain very low inflation otherwise people will switch to other currencies (that don’t devalue over time).
Some people argue against fiat currency (ie currency not backed by assets) and suggest we should return to a currency backed by gold (or other valuable assets). It is argued that this approach is better at maintaining monetary stability than inflation targetting. Still others want to go further and actually ban the practice of fractional reserve banking (where the bank issues more money than they hold in reserve). If you want to know more about any of these views, please ask in the comments.
Finally, I’ve included the options of “I don’t know” and “I don’t care” for the non monetary boffins.
The last poll question asked Which is the most objectionable tax? The winning answer was income tax with 34%, followed by tariffs on 14% and payroll tax on 13%. Other unpopular taxes included the death tax (7%), capital gains (5%) and stamp duties (5%). Amazingly, nobody voted for company tax. Only 3% thought that a carbon tax was the most objectionable, which indicates that most people would approve of a trade-off between introducing a carbon tax and abolishing/reducing some of the other taxes.