By far the best reason for a National Divorce is that the red states need their own currency zone. Now. Immediately.
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Replying to @ESYudkowsky
If trade is free, investment can still be sucked out of red state by tight blue money. Red staters will hold blue dollars.
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Replying to @bessiambre
And this is worse than the current situation how? At least they'd have currency to pay for labor!
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Replying to @ESYudkowsky
Savings end up as paper instead of investment backed by real economic activity. They wouldn't pay labor, would hoard blue paper
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Replying to @bessiambre
I'm confused. Are you saying nobody would want/accept red paper, such that it couldn't pay laborers and animate the economy?
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Replying to @ESYudkowsky
Few people would invest in job creating endeavors in red states if they can hold blue paper that gets an above market return.
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Replying to @bessiambre
Are you saying red-dollar states would overconsume and underinvest, or that they'd have excess capacity / a demand deficit?
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Replying to @ESYudkowsky
Both demand deficit and low capacity because people would be hoarding blue dollars instead of spending and investing in capacit
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Replying to @bessiambre
Demand deficits just mean the central bank creates more money. Red states currently have demand deficits *and* no investment.
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...of course, this is all mad fantasies of adequacy because a real Red State Central Bank would adopt a gold standard.
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