Modern Monetary Theory

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Re: Modern Monetary Theory

Postby stickdog99 » Wed Mar 27, 2019 4:29 pm

MMT strikes me as a truly social constructionist approach to economics. I love it. Debt and taxes are most certainly human inventions. So why not at least attempt to construct them in a way that is more useful than deleterious to our society as a whole?

It's bizarre to me that it took this long for academics to realize what was actually going on. But now the question becomes, why has so much effort gone into the social construction of debt as absolute, balanced budgets as necessary, and austerity as the only solution to "fiscal irresponsibility" when nothing in macroeconomic history actually underpins any of these "immutably true" constructions?
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Re: Modern Monetary Theory

Postby Elvis » Wed Mar 27, 2019 9:47 pm

stickdog99 wrote: why has so much effort gone into the social construction of debt as absolute, balanced budgets as necessary, and austerity as the only solution to "fiscal irresponsibility" when nothing in macroeconomic history actually underpins any of these "immutably true" constructions?


I think it's the profits and social control? ...as I wrote on page 4:

the power of fiat money to fund broad federal programs such as job guarantee, healthcare, education, housing and clean infrastructure has been shouded from public understanding primarily for this reason: it would deny or greatly reduce private industry's ability to profit from these activities, including access to money itself.

Obscuring the tenets of MMT (e.g., taxes are not required for federal spending.) gives them more control, more profit, and perpetuates the myth that everything must be marketized and commodified. (And you will do as you are told / Until the rights to you are sold!)


Somewhere I itemized with more detail, maybe it was in an email, I'll check later. Just contrast with military spending; defense contractors have an exclusive, guaranteed customer. When the U.S. "sells" missiles to Saudio Arabia, the government just licenses the arms makers, who make the profits.

Great posts btw, thanks stickdog.
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Re: Modern Monetary Theory

Postby JackRiddler » Thu Mar 28, 2019 5:24 am

stickdog99 wrote: why has so much effort gone into the social construction of debt as absolute


The idea is as old as the first surviving religious texts, so it's indeed a lot of effort!

balanced budgets as necessary,


They are, depending on growth expectations, for entities who don't issue their own currency or who depend on limited commodity money.

and austerity as the only solution to "fiscal irresponsibility"


Now this is more recent, but it was capitalist ideology before Keynesianism (violated consistently only at wartime) and remains it today under neoliberalism.

when nothing in macroeconomic history


Macroeconomics is an early 20th century invention that came into its own only around 1930. Macroeconomic history before that is an unreliable backward projection of present concepts, often highly ideological. Before that you had political economy and of course it was pre-macro in many ways.

actually underpins any of these "immutably true" constructions?


Agreed.

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Re: Modern Monetary Theory

Postby stickdog99 » Thu Mar 28, 2019 5:05 pm

Jesus is just alright with me.

https://www.huffpost.com/entry/history- ... 956c0963/4

5) The great traditions of religion and philosophy begin by rejecting the idea that debt is the basis of morality.

With debt so at the very center of political debate, it's not surprising that all the great religious and philosophical texts of the ancient world felt they had to grapple with the issue as well. Words for "debt" and "sin" in Hebrew, Sanskrit and Aramaic were in fact the same. But in every case, the conclusion is that any morality which confines itself to paying one's debts is woefully inadequate. The Lord's Prayer actually reads "forgive us our debts, just as we forgive others who owe us money." Of course, we don't. The implication: we are all sinners. But it also makes clear that we really ought to forgive debts, just as "redemption" (another financial term) can only really come as a divine act of debt cancellation, in just the manner of ancient Mesopotamian Kings, or the Biblical Jubilee. Plato's Republic, the founding work of Western political philosophy, begins exactly the same way: "Is not justice just a matter of paying one's debts?" The resounding answer is: "No!"


The whole slideshow is worth a look.
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Re: Modern Monetary Theory

Postby Grizzly » Mon Apr 01, 2019 12:41 am


MSNBC's Dylan Ratigan on The Federal Reserve, Media Censorship, Bilderberg
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Re: Modern Monetary Theory

Postby JackRiddler » Mon Apr 01, 2019 1:51 pm

Three interesting articles on political economy, more context than direct MMT, but basically I think anything about uncovering the always power struggle underlying "how money works" can qualify.

Huge historic movements aimed at reordering the global economy -- Bandung, Non-Aligned Movement, the New International Economic Order of the 1970s (which was actually passed by the United Nations). Really excellent stuff you want to know:

MARCH 29, 2019
The Cuban Nationalization of US Property in 1960: the Historical and Global Context

by CHARLES MCKELVEY

https://www.counterpunch.org/2019/03/29 ... l-context/



Excellent stuff on the history of financialization since the 1970s, though lacking the broader context of all the crises before then. Framed around a review of what sounds like a really naive reform book -- sort of a call for everyone to turn themselves into the objects of impact investing -- that doesn't deserve it, but at least prompted this analysis.

John Ganz, March 28

Nightmares of the Credit Regime

Can activists out market the markets? https://thebaffler.com/latest/nightmare ... egime-ganz


Framed around mockery of Krugman's professed inability to understand them rural deplorables, this is really, really fucking good & knowledgeable writing.

Tarence Ray, March 28

Get Real
What liberals like Paul Krugman still don’t understand about rural America

https://thebaffler.com/latest/get-real-ray
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Re: Modern Monetary Theory

Postby Grizzly » Tue Apr 02, 2019 11:23 am

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Re: Modern Monetary Theory

Postby stickdog99 » Wed Apr 17, 2019 2:19 pm

I am frankly not sure what to make of this Forbes contributor argument that suggests that MMT is flawed because it could be used to print up as many border police and Homeland Security officers as Trump wants (yeah, it is currently being used that way), and something about how its principles inherently conflict with and are somehow undermined by those of CRYPTOCURRENCY!!! There may be something here that the author is unsuccessfully trying to express that I cannot grasp, but I don't think the author even understands that MMT is a theory that seeks to better describe how certain national economies actually work in practice that has ramifications for any political agenda rather than a political movement in itself.

https://www.forbes.com/sites/rogerhuang ... e667bd117c

Modern monetary theory (abbreviated as MMT) was first an economic pariah and is now a trend, similar to cryptocurrency. Supported by both Senator Bernie Sanders (whose economic advisor in 2016, Stephanie Kelton, remains a major proponent of MMT) and Representative. Alexandria Ocasio-Cortez, it has become the foundation for how to fund more expansive government programs: everything from the New Green Deal, to a job guarantee for all Americans. It also forms an anti-thesis to the economic rationale of cryptocurrency. MMT is focused on granting the state the permission to exercise its full economic power, while cryptocurrency asserts ways for individuals to have the liberty to pick and choose regulatory regimes and erode some of the awesome power of that same state.

This tension is one that must be reconciled. The foundation for all these ambitious programs is being chipped away slowly by the reach of cryptocurrencies, and those who hold cryptocurrencies may inevitably drift away from unconstrained governments.

There are many beginner guides to the topic of modern monetary theory and its adherents have been very proactive about responding to criticism both from mainstream economists and fellow travellers such as the left-wing Post Keynesians. In a crude summary, MMT adherents believe the following fundamental truths about economics:

Many MMT believers think that fiscal policy (the powers delegated to a government to tax and spend funds, represented in most countries as a treasury department and taxation department) should supersede monetary policy (the ability for a central bank to dictate consumption and savings patterns in an economy by targeting interest rates, the default for most developed economies) and that the state should essentially combine the functions of both the national treasury and its central bank.

Government deficits don't crowd out the private sector's financial wealth, but actually increase it since deficits create credits to the private banking system.

Ambitious government programs should be financed since they don't crowd out private wealth. Done right, these government programs can reduce inequality (as opposed to quantitative easing, which increased it) and aim towards full employment in an economy (the level where everybody who is willing to work is working).

As a fiscal policy of last resort to ensure full employment, the government should offer a job guarantee to anybody willing to work and essentially create work to ensure full employment.

Taxes are only useful in order to prevent inflation and to fight economic inequality and not actually to "finance" the government. Taxes serve the function of reinforcing the value of a domestic currency since it's assumed that anybody who "subscribes" to a particular government's services will be forced to pay in the domestic currency in question -- ensuring that there will be some goods chasing that currency and preventing an erosion in value of the currency itself.

Both cryptocurrency and MMT are a response to what both communities believe are an inherent fault with the world's economic system since Nixon took the US dollar out of the gold standard. Aside from theoretical frameworks and distribution of powers, there is essentially nothing that prevents a government with a floating currency to print or create "value" out of nothing.

Economics has always been an art of constraints: telling a prince or king that they couldn't simply create money in the first place because that money would erode in value in time. What MMT accomplishes is a theoretical framework for why many modern-day constraints on government spending (deficit/debt theory) simply don't matter.

MMT focuses on centralizing economic power for nation-states. Cryptocurrency focuses on distributing economic power and allowing people to resolve conflicts without needing the power of that same state.

Bitcoin is built on the idea of a limit in the number of Bitcoins that can be mined (21 million) along with other imposed constraints. The number limit on Bitcoin was an exogenous constraint, and not one that was technologically imposed but a political choice. The genesis block of bitcoin illustrates this thinking most sharply. The coinbase parameter for it reads "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". The response to the global financial crisis was very much on Satoshi's mind when he first crafted bitcoin.

Bitcoin is a technological revolution but an actual political retrospective: a harkening back to the norms of the gold standard where a government relied on the amount of gold mined in a certain area to limit its spending powers. Bitcoin allows for the theoretical creation of infinite value, but restrains itself due to its exogenous limit and through a cultural ethic of non-political intervention in governing protocols to create an internal check on inflation and value erosion.

Consider the debate around "Szabo's Law", the cultural ethic in cryptocurrency communities that you should not enforce changes to an underlying blockchain unless it is for technical maintenance. This isn't a theoretical debate: Ethereum Classic and Ethereum largely forked based on objections to a hard fork that returned funds to DAO holders. This was an explicitly political decision where desired outcomes were regarded as inequitable and DAO holders were made whole for reasons that had very little to do with technical maintenance but rather continued support of the community.

There are more nuanced examples too. Bitcoin Cash was forked from Bitcoin based on the block size limit. Was that a political choice, or technical maintenance that allowed for faster performance for all stakeholders? A harder question for sure. But the first principles we use to reason with that measure the political scale of an intervention in the codebase vs. what is required for technical progress.

The principles behind Szabo's Law, taken to their logical conclusions, are exactly the opposite of MMT. Cryptocurrencies hold no tax agencies. They cannot accrue value or fight inflation by using the threat of force to get people to exchange goods for their domestic tokens. They can neither appeal to ethnic nationalism or patriotism to spur support, nor can they garnish your wages. Cryptocurrency holders are those who are explicitly trying to navigate the different political frameworks they are forced to comply with by birth or by choice and still interact with one another despite a shaky legal regime in one area or a corrupt political class in another.

The political intervention required by MMT, on the other hand, requires faith in a nation-state, its ruling class and at its core, geographic limits and strictly defined taxation limits on individual liberty to prop up the value of what are essentially domestic tokens.

Perhaps this contrast exists because the MMT community largely consists of academics and politicians who are laser-focused on the benefits that can be accorded a physically-defined polity (whether a university or a nation-state), and the cryptocurrency community was largely built by borderless technological enthusiasts, born of an age where it takes seconds for Raj in Canada to purchase a product from Paul in India.

Economists are by definition optimization-seekers working with a limited set of assumptions and datasets that have been recently assembled. To be fair, cryptocurrency rests on an even newer foundation, yet it's critical to acknowledge that economic critiques are directed to a set of nation-state based assumptions that have only iterated for a couple of centuries at most. MMT theory is simply a continuation of the Keynesian consensus that nation-states are the guarantors of prosperity for all, and that full employment and jobs, as well as the cycle of present consumption, rest as the primary motivation for the state and its citizens to co-exist. Employment is assumed to be an absolute good, but employment in what capacity?

Perhaps the easiest example of how cryptocurrency adherents chip away at MMT, and one which MMT adherents may be most sympathetic for, is the idea of the second-order political consequences of domestic consolidation.

A benevolent government (perhaps represented here in the minds of MMT advocates as a Bernie Sanders administration in the United States or a Jeremy Corbyn parliament in the United Kingdom) may decide to use its new-found powers and employment base to banish poverty, employ everybody willing to work in a consensual fashion and create an equitable, "harmonious" society -- where constraints are placed on the state to ensure it is a neutral dispenser of funds.

But a malevolent government (perhaps represented here in the minds of MMT advocates as a Trump administration) might hire incredible amounts of law enforcement, border patrol, and investigative authorities instead.

Or perhaps we'll be in a middle ground, where a future Works Progress Administration (FDR's job guarantee during the New Deal) builds great objects of national affection, but also channels funds politically to ensure re-election and conformity from a voter base.

The last case is more dangerous than it seems. As Chinese democracy activist, noted dissident and Nobel Peace Prize winner Liu Xiaobo astutely put it in one of his last interviews before dying in a Chinese jail cell: "If our rice bowls were still in the hands of the Communist Party, as in the 1950s, people like us would have to keep our mouths shut."

Another consideration is the long-term economic implications of a modern-day job guarantee in a world where the Department of Labour struggles to define skilled aspects of computer programming, STEM fields, and others as they emerge and grow (a computer programmer is regarded as low-skilled mostly because it doesn't require an accredited degree to enter -- this is a self-perpetuating cycle indeed) means that public grandesse will ensure a wage and demand obedience for those who benefit from a job guarantee, in a world where the rat race has become oriented to skills rather than connections. This creates a trap for those employed by the "employer of last resort", which is a political and economic entity.

A government also may not be inclined nor perhaps the most capable of keeping continual track of how to do skills training for its population. Thus the debate in the United States between public schools and charter schools, and the need to import skilled immigrants to fill in gaps. What may end up happening for those guaranteed a job is skills stagnation and "rice bowls in the hands of the government."

MMT adherents blast other economists for not fully realizing the scope of the world we have inherited from Nixon's abandonment of the gold standard. Cryptocurrency adherents might blast them and mainstream economists for not understanding the second-order political consequences of economic theory nor the sweeping changes that have come with a skilled class of nomads that may not particularly need loyalty to one state or another for economic reasons.

However, the centralization required to get MMT theory into practice --getting multiple political figures who are influenced by MMT economists voted in by a majority of a nation-state's electorate, preferably the nation's executive, and then getting the legal instruments to change the policy required through both judicial and legislative checks-- is a discrete step process rather than the slow (but increasing) trend line of the empirical effects of cryptocurrency and the travels of its users.

Cryptocurrency companies are largely remote. Technology companies have taken over the top rankings for value by market capitalization, and they have a sharply more nomadic workforce than the oil companies of old. Programs are marketed on the idea of traveling to obtain critical education. Remote work has been one of the leading themes of our time. The number of Americans renouncing their citizenship (one of the most powerful on Earth) has increased every year to higher and higher numbers: to be sure, only 5,000 or so a year -- but many more than anybody living under a MMT-friendly government.

Perhaps one day, these two ideas, trending in their different ways, might reconcile into a Hegelian dialectic: a compromise. There may be nation-states that use the MMT framework to wisely invest in infrastructure and science -- the positive effects from this can resonate across borders and time periods. They might accrue a population that is wise and healthy, that eliminate the most unpleasant consequences of income inequality and that attract cryptocurrency holders to voluntarily stay within their borders.

But it is also instructive to think of the switch case of a set of dystopian panopticons who employ more law enforcement agents than the increasing number of criminals the state defines -- and the economic might to crush any one of their citizens forced to a stapled, "guaranteed" life of domestic currency to ensure obedience and a self-perpetuating cycle of economic and political dependence, one that can only be escaped through cryptocurrencies and interactions with other systems, nation-states, and geographies.

For now, cryptocurrency is steadily chipping away at both the foundational assumptions of MMT and the dystopian switch case. The numbers may be small, but they disguise a larger movement away from geographic and political constraints on individual liberty. Emerson, the iconic linchpin of American intellectualism, once wrote "in dealing with the State, we ought to remember that its institutions are not aboriginal, though they existed before we were born; that they are not superior to the citizen; that every one of them was once the act of a single [person]; every law and usage was a [person]'s expedient to meet a particular case; that they all are imitable, all alterable; we may make as good; we may make better." He preached the "infinitude of the private [individual]".

Cryptocurrency adherents are living Emerson's principles out by "making better" than the states they were born in or nationalized to in how they accord value and exchange it between different economic and national regimes -- and slowly chipping away at the assumptions that underpin much of MMT and modern economic theory as a result.
Last edited by stickdog99 on Wed Apr 17, 2019 10:25 pm, edited 3 times in total.
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Re: Modern Monetary Theory

Postby stickdog99 » Wed Apr 17, 2019 2:57 pm

Here is a more direct, cogent, and transparently deceitful attack on MMT from Market Watch with some commentary from me.

https://www.marketwatch.com/story/guid/ ... E69096A302

Opinion: Modern Monetary Theory flunks the smell test

The challenges to unrestrained federal spending: economic, legal, political and practical

By CAROLINE BAUM

Perhaps you’ve heard or read something recently about Modern Monetary Theory. You’d have to be living on the Space Station not to have come in contact with the “theory,” as it were, that is sweeping the nation, aided and abetted by progressive members of Congress in their push to guarantee free everything.

Yes, those damn progressives are at it again with all their terrible plans to guarantee basic human rights! Now they have embraced a "theory".

Modern Monetary Theory, or MMT, is based on the notion that deficits don’t impose any constraints on countries that borrow in their own currency, such as the U.S. or Japan.

MMTers believe that adjustments to aggregate demand are the province of fiscal policy; that the government can spend money on public priorities, such as keeping everyone employed, without raising revenue; that the only limit on government spending is inflation; and that interest rates should be permanently set at zero.

If this sounds fanciful, it is. Even the name — Modern “Monetary” Theory — is misleading because it’s really fiscal policy in disguise. Instead of the Federal Reserve acting to stimulate or curtail economic growth by lowering or raising interest rates, MMT delegates that role to the federal government, which would increase spending to address weak aggregate demand and raise taxes to curtail rising inflation. The economic establishment, both right and left, has come out against MMT with guns ablazing, calling it quackery, arguing that monetary policy is best left to the real monetary authority.

Yep. Governments cannot be trusted to regulate their own monetary systems. Only private banks and other private interests that profit mightily from creating money out of thin air can have the authority to do this!

Isn’t this a replay of the age-old Friedman v. Keynes debate? That would be Milton Friedman, free-market economist and father of monetarism, and British economist John Maynard Keynes, who proposed using government intervention to stabilize the economy.

Keynes proposed using government spending to increase aggregate demand in order to temper the downturns in the economy. His suggested countercyclical fiscal policy, including spending on public-works projects at times of high unemployment, and raising taxes to slow economic growth when inflation was accelerating.

Keynesianism dominated economic thinking from the 1950s to the 1970s, when the U.S. confronted both high unemployment and high inflation. Stagflation gave rise to the acceptance of Friedman’s monetarist ideas: that inflation is a monetary phenomenon; that an increase in the money supply affects nominal spending in the short run and inflation in the long run.

And Friedman's supply side economics has been a resounding success! Whenever and wherever applied, the rich get richer and poor get more miserable!

“MMT has many Keynesian aspects to it,” said Scott Sumner, a senior research fellow at George Mason University’s Mercatus Center. “You boost spending to boost GDP growth. Keynesians say you prevent inflation by tight money. MMTers say you raise taxes.”

Sumner pointed to a real-world case study of MMT that failed miserably.

“In 1968, (President) Lyndon Johnson raised taxes,” which produced a budget surplus in 1969. “But raising taxes and balancing the budget didn’t control inflation.”

Inflation rose steadily, peaking at 6.4% in February 1970, shortly after the onset of recession, as the Fed got serious about raising interest rates to curtail rapid growth in the money supply.

“There is no statistical evidence that fiscal policy drives inflation,” Sumner said. “We have huge deficits now and no inflation.”

Awesome journalism in not asking any MMT advocate to respond to this absurd charge than MMT "failed" because something MMT does not care one whit about (balancing the budget) resulted in a historically minor spike of inflation.

Image

because the Johnson Administration actually LOWERED the marginal income tax rates

Image

Furthermore, what is "there is no statistical evidence that fiscal policy drives inflation" supposed to even mean? Does Sumner actually mean the all-powerful Fed can't take steps to control inflation, or just the "powerless" government?


What seems to be getting less attention than the questionable economics of MMT are the mechanics. MMTers seem to gloss over the issue of how the government’s spending initiatives would be financed. Yes, the Treasury can deposit a check in the bank account of a contractor hired to improve the nation’s infrastructure, but what happens when the Treasury’s accounts run dry?

MMTers assume that the Fed will accommodate the spending by printing money. That could be accomplished in one of two ways: by buying bonds directly from the Treasury, which is a practice employed by banana republics that almost always ends in hyperinflation; or by extending a permanent overdraft loan to Treasury General Account at the Fed.

Too bad there are legal constraints on both of those tactics.

First, Section 14b of the Federal Reserve Act specifically grants federal reserve banks the power “to buy and sell in the open market” U.S. Treasury securities or government-guaranteed debt obligations. Nothing in there about buying bonds directly from the Treasury.

Second, “there is no allowance for overdrafts at all,” said George Selgin, director of the Center for Monetary and Financial Alternatives at the Cato Institute. “It’s illegal. Congress can’t write checks in amounts exceeding its balances in its TGA account.”

“When you push MMTers on the question of what happens when spending can’t be financed out of current resources from taxing and borrowing, they assume the Fed, without question, will fund the difference,” he said. “That presumes that the laws will be set aside. That’s a huge assumption.”

While MMT supporters, such as New York Democratic Congresswoman Alexandria Ocasio-Cortez, may have the energy and the social media presence to promote their pet ideas, it’s not clear that progressive Democrats have the votes to amend the Federal Reserve Act or rewrite banking laws.

LOL! It's AGAINST THE LAW to create money publicly. Only private banks can create money out of thin air without BREAKING THE LAW! And, of course, banks paid good money to get those laws written, so there is no possible way to rewrite these laws in order to help society.

Then there’s the idea of minting a $1 trillion platinum bullion coin, which the Treasury would deposit in its account at the Fed: another questionable tactic that would require the endorsement of both the U.S. Mint and the Fed. First proposed as a work-around during a debt-limit crisis, MMTers have now co-opted the idea as their own. (You can read Selgin’s blog post to understand the intricacies of coinage.)

Since when is this a MMT idea?

Finally, there is the small matter of ceding control of the economy to Congress.

MMTers may believe their hype about what drives inflation and what should be used to control it, but why, oh why would anyone assign the most important economic-management function to the political class? These are the same folks who can’t seem to pass a budget on time or address the nation’s crumbling infrastructure when they all agree it needs fixing.

This seems to be a major flaw in Modern Monetary Theory. The economy is too important to be left to the politicians.

The bottom line of the entire article. You can't let the government control monetary policy because you must leave decisions that are this important to the REAL AUTHORITIES!
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Re: Modern Monetary Theory

Postby Elvis » Fri Apr 19, 2019 4:27 am

Grizzly » Sun Mar 31, 2019 9:41 pm wrote:
MSNBC's Dylan Ratigan on The Federal Reserve, Media Censorship, Bilderberg


Dylan Ratigan is apparently an idiot. The banking system he describes in #1 is not "communist," it's what we have in the US (and UK and Japan and most countries). I had to skip through the rest of his ramblings.
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Re: Modern Monetary Theory

Postby Elvis » Fri Apr 19, 2019 4:31 am

Argh... this business of misinformed writers explaining MMT to us is really getting old....

My comments to CAROLINE BAUM:

CAROLINE BAUM wrote:Modern Monetary Theory, or MMT, is based on the notion that deficits don’t impose any constraints on countries that borrow in their own currency

No it's not. It's based on the fact that such countries don't have to borrow. Idiot.


CAROLINE BAUM wrote:Instead of the Federal Reserve acting to stimulate or curtail economic growth by lowering or raising interest rates, MMT delegates that role to the federal government, which would increase spending to address weak aggregate demand and raise taxes to curtail rising inflation

No it wouldn't. You're just scaring people into thinking MMT means higher taxes. Moron.


CAROLINE BAUM/Scott Sumner wrote:“In 1968, (President) Lyndon Johnson raised taxes,” which produced a budget surplus in 1969. “But raising taxes and balancing the budget didn’t control inflation.”

The budget surplus caused a fucking recession. Like federal budget surpluses always do. But you didn't mention that, did you? Imbecile.


CAROLINE BAUM wrote:MMTers seem to gloss over the issue of how the government’s spending initiatives would be financed.

No it doesn't. You gloss over it. Ignorant slut.


CAROLINE BAUM wrote: Yes, the Treasury can deposit a check in the bank account of a contractor hired to improve the nation’s infrastructure, but what happens when the Treasury’s accounts run dry?

The Treasury cannot run dry. Dumbass.


CAROLINE BAUM wrote:This seems to be a major flaw in Modern Monetary Theory. The economy is too important to be left to the politicians.

Mosler suggests establishing an independent tax board, similar to the Fed's role in setting interest rates, except that it would counter inflation by setting federal tax rates. But you've never read Mosler, have you? HAVE YOU? Shit-spewing blatherskite.
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Re: Modern Monetary Theory

Postby Elvis » Fri Apr 19, 2019 4:35 am

Stickdog, Grizzly and others, thanks for chipping in, it gets lonely here. Kids, tell mom!
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Re: Modern Monetary Theory

Postby JackRiddler » Fri Apr 19, 2019 5:59 am

.

Repeating my thread motto: MMT has presented models of money circulation, currency systems, and political-economic drives that describe empirically evident realities more accurately than the neoclassical or libertarian models. And continuing: It is tied to a variety of larger proposals for radical political-economic change. Recently a mainstream has emerged within this discourse that I fully support, based on Green New Deal (GND), Jobs Guarantee (JG), Medicare for All, and public banking to fund infrastructual transformation. The latter, the political consequences drawn from MMT, are inseperable from any and all other issues of political economy, including and especially the flows of people, goods, money, ideas and politics across borders. So I regard this also as the capitalism and political economy thread.

Crossposting the following because although I started writing it as a response in the "Sticky CT" thread, within a few minutes I thought I was doing it for this one!

Elvis » Fri Apr 19, 2019 3:46 am wrote:
[...]

Ira Glass
The World Order?

Zoe Chace
Basically, the idea that a cabal of rich guys is trying to take over the world and create one world government-- like one currency, one army, no national borders.


There's where I wanted to get out of bed and email them: "I think you just described everyday neoliberalism."


Not really though. Ideologically to an extent, but we are not obligated to believe ideological statements (e.g., the talk of "free markets" or "open borders") when the policy reality is consistently different over very long terms. Especially not when it is clear why the material reality must differ from the dogma, if the interests of the ruling class and of maintaining capitalist societies are truly to be served.

Neoliberalism like earlier capitalist forms relies on a highly authoritarian state, necessarily and mainly organized through the existing nation-states, to set up, protect, and subsidize its "markets," and to aggressively police and suppress all tendencies who would counteract its aims of privatization and bone-crushing competition among the laboring classes, or raise the potential for an actual alternative to capitalism. The neoliberal "cabal of rich guys" can't even hold a Davos or a G20 without an army of national police to protect them.

Open borders are for goods and above all capital, not for human beings. The association of human movement with money movements is a fatal, ungenerous, and indeed deplorable fallacy of those on the nativist right-wing who oppose neoliberalism but do not understand it (and who would naively call it "globalism" and even express support for "capitalism").

Again, the neoliberal ideology may say otherwise, and neoliberal organizations may advocate open borders for human beings, but this is generally a low priority and often disingenuous. The money comes first. Harsh border regimes are supported by a consensus of actors along the standard political spectrum who otherwise sing together with neoliberal ideology and practice, and the "debate" currently only seems to be about whether and how much to punish children who didn't choose where they live and grew up (DACA) and who didn't choose to have their parents turned into refugees by repressive (US backed) governments and drug cartels.

Borders are perhaps the most important factor in assuring that migrant labor is desperate, willing, unregulated, plentiful, and cheap, which is such music to the neoliberal capitalists. The latter include, as a minor example, that famous employer (and stiffer) of cheap undocumented labor, the mobbed-up construction and money laundering entity known as Trump Org. But they also include many of the Davos-style "liberal" capitalists who piously express concern for the poor, or for the migrants, or for refugees, and who blame the nativists for their plight, while advancing the larger politics and investment plans that uproot, impoverish and cause war to be waged on the people who are then forced across the borders.

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We meet at the borders of our being, we dream something of each others reality. - Harvey of R.I.

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I am by virtue of its might divine,
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Re: Modern Monetary Theory

Postby Elvis » Sun Apr 21, 2019 8:27 pm

^^^ Yes, I had an inner quibble with "no borders" but close enough. It's kind of like the US military struggling to settle on a one-sentance defininition of terrorism; every new draft could be read as what the U.S. does on a recurring basis.
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Re: Modern Monetary Theory

Postby Elvis » Sun Apr 21, 2019 8:32 pm

I just heard "independent economist" Michael Hughes—a regular go-to "expert" for BBC—say that a tax increase would likely lead to inflation 'as they usually do' (transcription should be up soon).

:starz:

He said the fact there was currently almost no inflation resulting from QE etc. is very surpirising.


https://www.bloomberg.com/research/stoc ... pId=877429
Background
Mr. Michael Hughes, CBE serves as a Non-Executive Director at T. Bailey Asset Management Limited. Mr. Hughes previously served as a Portfolio Manager at JPMorgan Asset Management (UK) Limited. Previously, he served as the Chief Investment Officer of Baring Asset Management Inc. Mr. Hughes joined the firm in 1998 and was promoted to Chief Investment Officer in 2000. He was responsible for risk management at Baring Fund Managers Limited. Previously, Mr. Hughes worked at BZW Barclays, where he served as the Group Economic Advisor, a Managing Director at BZW Securities Ltd., and the Chairman of BZW Pensions Ltd. He is a Consultant at Baring Asset Management Limited, along with the responsibility of the firm's investment management. Previously, Mr. Hughes has served as the Chief Investment Officer at Baring Asset Management Limited. He also serves as a Director, with investment management responsibility at Baring International Investment Limited. Mr. Hughes was the spokesperson on financial markets and economics for Barclays Group. Previously, he held roles at the BP pension fund, Barclays Capital, BZW Securities and de Zoete & Bevan, a predecessor firm of Credit Suisse First Boston. Mr. Hughes is an Associate of the Institute of Investment Management & Research, a member of the Securities Institute and a member of the Society of Business Economists. Mr. Hughes was a Council Member of the ESRC and was made CBE in the June 1998 Honors list for services to the financial industry. He was voted as the top global strategist in the Extel survey of Investment Analysts. Mr. Hughes was also the Author of the Barclays Capital Equity-Gilt study, widely regarded in the UK as the authoritative research periodical on asset allocation. He received a Masters degree from the London School of Economics and a B.A. in Economics from Manchester University.
"Frankly, I don't think it's a good idea but the sums proposed are enormous."
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