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Money Printing

Discussion in 'Off-Topic' started by Hygro, Dec 6, 2016.

  1. Bootstoots

    Bootstoots Deity Retired Moderator

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    Okay, we can use total government expenditure rather than central - that's probably a better measure. But the numbers I saw for the Brazilian federal government showed constant government expenditures as a percent of GDP from 1995 to 2015. Have the states been increasing their expenditures while the federal government stays constant, or is there some reason to believe the World Bank is just completely wrong?

    Japan deliberately doesn't collect as much in taxes as most European countries, and chooses to run a perpetual deficit instead. Are you saying that this is a policy choice that should have no consequence for yields, because the government could theoretically raise taxes eventually if yields spike?

    I can think of one problem off the bat: its growth rate bumps along at nearly 0 even with the deficit. Should they increase taxes, their economy will likely contract, lowering the amount they'd actually get from their higher tax rate.

    IIRC, the vast majority of Japanese debt is domestic, and their population is unusually willing to put their money in domestic bonds to keep it safe despite the negligible yield. If that's true, that would be a big part of the puzzle. It still doesn't really explain why the rest of the developed world is capable of running deficits beyond their growth rate with little consequence, though.

    I said this:
    I left out individual Eurozone countries because they are not using their own currency and are chained to the monetary policies of the ECB. Portugal and Greece need to earn Euros to pay their debt, and have no control over their issuance. Subnational entities like US states are also in the same category.

    I don't have a Third Worldist belief about how government finance works, or at least I don't want to. I'm just pointing out a pattern that seems pretty consistent.
     
  2. Princeps

    Princeps More bombs than God

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    If you hold the government's money, and you wish to maintain the value of your savings denominated in the government's currency, you have a direct incentive to purchase government bonds if they offer an interest rate higher than inflation. How is this so hard to understand? Why would anyone not buy the bonds? It's not as if the government cannot pay the interest; since the govt can meet any expenditure denominated in the govt own currency.

    It depends on what is causing inflation.

    Brazil had huge foreign debts denominated in dollars and other hard currencies. They also suffered from the energy crisis as well as government incompetence (I mean, it was a military dictatorship.)

    I think Chavez had great intentions, I don't think he was jesus.

    Under Chavez, Venezuela had a smaller public sector than many European countries. I don't know about the current government. I have a feeling that Chavez's followers, as if often the case with followers, are more radical in their ideology. The peg deprived many enterprises of vital resources under Chavez government, as well. The peg was was created in response to right wing terrorism, but it turned out to be politically challenging to reverse it.

    The failures of Venezuela are the failures of an ineffective, racist and savagely violent opposition, leading to bad policy that aimed to protect the legitimate government from short-term instability.

    If the opposition hadn't been so violent, I doubt that Chavez's government would have hugely differed from the other pink tide governments we saw in Latin America at the time.

    Although I will admit, as I have admitted before, that Chavez's boorishness helped to create this backlash from the right.

    I think you underestimate the importance of good monetary policy. It's literally more important than who is running the toaster factory.

    That's because you don't understand why Mosler won the debate: inflation is not a concern when the government can control for it, and it can. All the academic economists with any credibility are fully aware of this. The people just haven't connected the dots: meaning that the right-wing talking points about social security being bankrupt are nonsense.

    I don't really understand your objection. It's theoretically correct that pensioners could suffer; but your priorities are far fetched, since the reality is that old people are richer than young people. It used to be the other way around with a gold standard; the old people were almost always poor. Using the currency as a savings vehicle is universally reviled as garbage economics; when we have other, far better savings vehicles in the economy, like properties and stocks. Government pensions can be adjusted when the need arises.

    No. Actually, I'm not really even defending MMT here.

    Many of the claims you make fly against basic academic economics; claims that the MMT also makes, but which mainstream academic economics also more or less support, but doesn't harp on.

    Like for example, mainstream academic economists constantly urge Japan to create more inflation.

    If Japan was on the brink of some hyper-inflationary spiral, I doubt that they would be so eager to recommend further inflation.

    Many of the policy recommendations of MMT are considered unorthodox, but not the ones you think. MMT econ doesn't think highly of monetary policy solutions to unemployment, for example. Mainstream econ thinks monetary policy is the first solution. MMT has given ground on this issue; which means that MMT has moved toward orthodoxy rather than away from it. The most radical proposals by MMTers have been on things like jobs guarantees.

    If they hold the govt currency, they have an incentive to purchase the govt's bonds that offer high interest rate. This removes excess liquidity and helps to keep inflation down.

    Obviously, this doesn't mean that a currency cannot be mismanaged to the point of catastrophic hyperinflation. It only means its much more difficult than you think, and it's not going to happen by accident, but either by design or as the result of hard currency debts and/or a collapse of domestic production; like how the hyperinflation of the 1920s Germany was designed to undermine the reparations regime, and was exacerbated by the French occupation of the Ruhr, which contained Germany's most productive enterprises. The German government chose to fund the strikers in the French occupied region as well, through money printing. Added to this was the badly designed German war-time financing system, which was built on short term debt, and you had the 1920s Wiemar govt flooding the market with liquidity. It was not accident. It happened due to a combination of deliberate choices.
     
    Last edited: Dec 14, 2016
  3. luiz

    luiz Trendy Revolutionary

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    Yes in Brazil it only makes sense to look at total government expenditure, which as you can see is a bit over twice the central government spending. Being federalist on paper but highly centralized on practice, looking at the central or state numbers in isolation don't tell the whole story. What happens is that the central government collects the vast majority of tax revenue, but the Constitution mandates a lot of spending from local governments in education, healthcare, transportation, safety and etc., which are not nearly covered by local taxes. So there are huge transfers from the central government to the local entities, in quantities decided by laws approved at the central level.
    So to compare apples with apples we need to look at total government spending in all countries. And then the picture is clear: in Brazil both government spending and the total tax burden are pretty much the highest among all developing countries. If you combine this with a fast growing debt, it's a tricky situation.

    I wouldn't say "no consequences", I would say "very little consequence until it is perceived as unsustainable". I think the key really is that Japan's tax burden is currently very low, and its government spending is also substantially below that of several major developed economies. So bondholders see no reason to worry. They also probably expect the Japanese public to accept well any tax hikes that are seen as necessary, without major disrupting protests or legal challenges. This is certainly a minor point, and I actually read it a while ago in a piece trying to explain why France historically had lower interest rates than the UK (the theory goes that the French have higher tolerance for high taxes and so lenders feel safer).

    There are definitely unique cultural / social aspects at play as well. But both Japan and the developed world can't do it forever. We've seen rate spikes when it goes too far. The key is to look at the total "breathing space" of the economy. In Japan it is still huge, while in Brazil it is very small. That's why there is a financial crisis in the latter but not the former, ultimately.

    Ah OK, I missed that. But note that Greece in particular also managed to run high deficits for longer than it otherwise would exactly because it is in the Monetary Union. That is, investors assumed - correctly, it turned out - that Greece's debt was at least partially backed by Germany, which lowered its overall risk. If Greece had run the same kinds of deficits while on the drachma, they would have faced a fiscal crisis sooner, not later. Put it another way: would you expect yields on Greek bonds to fall if they resumed control of their printing press? Of course not, they would skyrocket as investors dump them like the plague. In fact Greece at the height of the crisis would be a perfect example of the limitations of MMT. Sure, they could go back to the drachma and "repay" all their debt at once by converting it to local currency at some arbitrary rate. And then they would be effectively locked out of capital markets, which they desperately need to tap to keep running.
     
    Last edited: Dec 15, 2016
  4. luiz

    luiz Trendy Revolutionary

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    Why is it so hard to understand that government bonds in many countries have failed to find buyers?? Get out of your Disneyland Finnish bubble and look at recent history in developing countries.
    It's simple: people are not forced to hold the government's money. When they lose faith in a government's currency, and that happens when the government follows your ideas, anyone with even limited means will switch to whatever hard currency they can get their hands on, via the black market if necessary. This is happening in Venezuela right now, happened in Argentina under the Kirchners and in Brazil before 1994. Nobody is really forced to hold into worthless pieces of paper, get that into your head.

    More ignorance. The Brazilian hyper-inflation of the early 1990's happened under a fully democratic, freely-elected government. Which was following the economic ideas of the Universidade de Campinas (Unicamp), the bastion of heterodox economics in Brazil. The hyper-inflation was caused by financing the deficit (which boomed after the left-wing Constitution of 1988) with money printing. This is history.

    Chávez was a fascist pig who should have beet shot after his failed military coup attempt in the 1990's. This would have spared a lot of suffering.

    Under Chávez, the source of the vast majority of the country's wealth was turned into a crony-infested mess. Even while oil prices sky-rocketed, oil production collapsed. Chávez fired tens of thousands of highly experienced engineers and technicians and replaced them for illiterate baboons who were loyal to the regime. The result was turning what was once Latin America's most valuable corporation into a laughing stock, and bankrupting the country in the process.
    Of course that's only one of his gigantic flaws. All nationalizations were a disaster. The currency control for populistic motives is a disaster. Everything he touched turned to crap.

    Socialists learn nothing and forget nothing. You make me sick. It's the same excuse used since the Russian Revolution: we are starving because of saboteurs, spies, foreign powers. Not because we stick to an illogical, anti-human ideology that failed miserably every single time it was tried! No! It is other people's fault, those meanies that can't see how good and enlightened (Lenin, Stalin, Mao, Pol Pot, Castro, Chávez) Maduro is!

    Self-criticism is of course a quality unheard of in a socialist. The government you enthusiastically supported turned an upper middle-income country into a starving hell hole with shortages of the most basic goods and constant blackouts. Reflect on that for Christ's sake.

    The Venezuelan opposition was too soft; they should have killed Chávez when they had the chance and avoided a lot of starvation. Chávez was a former coupster who despised democracy and should never have even been allowed to run, being a criminal convicted for conspiring to overthrow democracy. As a military officer and a traitor, he should have been executed.

    No, if baboons run the toaster factory, no toaster will be made. We saw this in all factories nationalized by Chávez and specially in PDVSA, where output collapsed even as incentives to produce (global oil prices) boomed to record levels.

    All economists with any credibility have rejected MMT and its insane conclusions, including leading left-wing economists such as Krugman and Brad DeLong. Governments sometimes lose control of inflation, as they have many times throughout history.
    Pensioners have suffered through rampant inflation too (Brazil in the 1990's). You are arguing against observed and recorded historical facts. Your theory has been falsified.

    For discussions on Japan and why it can run high deficits for much longer than Brazil, see my response to Bootstoots. Hint: it's all covered by mainstream, orthodox economics.
     
    Last edited: Dec 15, 2016
  5. Princeps

    Princeps More bombs than God

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    Have they? Could be ignorance of the advantages or insufficient interest rates.

    I mean, basically you're saying that people wouldn't be interest in money, and that's not true. If inflation is out of control, landing your money in the safest possible harbor is the obvious thing to do. I don't see how you can dispute this. Some people might refuse to buy govt bonds as a political statement...

    But if things get that bad, you can still do what the Nazis did, which is to just force banks to take govt loans into their bank portfolios directly.

    They are forced to use government currency because of their tax liabilities. If you don't earn the government's currency one way or the other, you can't pay your taxes. I don't think people ever stopped using the government's currency in any of the examples you cited. They certainly used dollars as well, I'm not disputing that.


    The conditions for the hyperinflation definitely seem to be rooted in the Junta's policies.

    Now. Having read up on the Brazilian situation, I can see at least three obvious problems that exacerbated the inflation.

    - huge foreign currency debts
    - indexations of values; wages and financial balances to inflation
    - the disorganized nature of Brazil's public sector in the aftermath of the Junta's demise

    Basically, Brazil's situation has very little to do with the economic model MMT is analyzing.

    And this is basically the problem with Latin American politics. This is why you'll never become anything in the world.

    You don't trust each other, at all.

    Chavez came into power he was immediately savaged by a campaign that sought to de-legitimize his government as a whole. The opposition became hyper-radicalized from day 1, because Latin America has a zero-sum view of politics. Anything gained by the other group is immediately something deprived from your group.

    You mock my "disneyland Finland" as a country, but in Finland.... we have coalition governments shared by the left and right. No one calls for heads to roll. When you avoid radicalizing your own opposition, you also avoid radicalizing the government, and vice versa.

    I liked Chavez as a social democrat; his idea of using the oil wealth to payroll massive health, education programs for incredibly impoverished neighborhoods of Venezuela. I never understood why the right hated him so much with so little evidence of his supposed evils. They started demonizing from the get go; right from the start, which culminated in a military coup.

    You were basically saying that Chavez is a stalinist; I remember showing you that Venezuela had a public sector that wasn't out of place. They were nationalizing consumer goods providers because they believed they were part of the radical opposition. The radicalism of the opposition had helped to create paranoia in the government. The scarcities of produced by the peg helped to create actual hoarding, which helped to feed this paranoid narrative. The peg itself was imposed because of instability in the aftermath of the coup.

    Krugman and DeLong spend their time arguing with a strawman. He still keeps baking MMT assumptions into his own premises: http://neweconomicperspectives.org/2014/07/krugman-now-disagrees-earlier-critique-mmt.html

    Yes, because they bake in MMT assumptions into their models. Governments can control their currencies; they can prevent inflation; they can run perpetual deficits.

    There is absolutely no reason -- at all -- to assume that Japan has to stop. If the government controls the bonds, the printing press, the interest rates and regulates the banking institutions, the system can be used to perpetually transfer resources from the private sector to the public sector, as long as those resources exist. A small amount of inflation is enough to sustain the governments needs.
     
    Last edited: Dec 15, 2016
  6. luiz

    luiz Trendy Revolutionary

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    People are not interested in "money", the worthless pieces of paper with some pictures in it, they're interested in real wealth. When they lose confidence that those pieces of paper represent a valid claim on real resources, they refuse to hold them. Of course people will still pay taxes, but they'll keep all their holdings in a hard currency and only convert as much as necessary and when necessary to pay their tax obligations. And in an economy that follows your economic ideas, tax obligations tend to be pretty low as economic collapse leads most activity to the informal sector. See Venezuela, your model country.

    The indexation of values to inflation was actually made much worse by the post-military Constitution of 1988. Yes, the military screwed up big time, among other things by creating a rather big foreign-denominated debt. But the simplest, most thorough explanation for the Brazilian hyper-inflation of the early 1990's is this: huge growth in government spending financed largely by printing money. There's not need to look much beyond that.

    The problem with Latin America is that some people here (granted, a smaller and smaller minority after the fiasco of the Pink Tide) insist on adopting solutions that failed every time they were tried. Like socialism or highly unorthodox monetary policies. And this small minority is validated by pampered bozos from the First World who can't resist a caudillo dressed in red, and love social and economic experimentation on southern savages. Does this type sound familiar?

    Chávez was a fascist coup-plotter who betrayed the constitution he swore to protect by trying to overthrow a democratic government by force, killing hundreds of people in the process. The only possible punishment for such treason is the firing squad. By failing to properly deal with that fascist traitor, the democratic forces of Venezuela set the stage for his comeback and thorough destruction of the country, complete with starvation, almost permanent blackouts, a level of violence only seen in war zones and lack of toilet paper.

    According to Chávez's Stalinist paranoia, everyone who was not 100% aligned with his demented project was part of the "radical opposition", and so everything from consumer goods to steel plants were nationalized. The result was a collapse in production on everything he touched, as the goons he put in charge could barely read and write much less do anything productive (and of course we all know how well the state manages enterprises, specially in Latin America).


    So you quote a MMT blog to "prove" they were wrong? Oook.

    The MMT "assumptions" which are correct have existed long before someone came with the term MMT. The Fed has been using SFC models for a long time - the only reason they don't use them more, or mostly, is because SFC models are very limited and flawed.

    Japan can continue doing what it's doing as long as lenders perceive that there is ample room to raise taxes / cut spending so they get the real value of their investment back. For the moment, nobody is too concerned, because as I demonstrated, Japan's government spending is actually not very high, and its taxes are very low, so there's a lot of room to run surpluses.
     
  7. Lexicus

    Lexicus Deity

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    Yes, clearly MMT'ers are the ones who focus on financial wealth to the exclusion of real wealth...
     
  8. Princeps

    Princeps More bombs than God

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    If you have govt money, and the thing you can purchase with it is government bonds, there is no reason not to buy them. You're just dithering around, looking for any explanation for why my point is wrong and you have nothing. There is no deep mystery here: people want to preserve their cash savings, most of which will inevitably be denominated in the govt's currency. Now it doesn't matter if some switch to dollars; inevitably the end use of the currency is to pay taxes or buy govt bonds. There is no reason why people wouldn't want to buy government bonds.

    Well, most of the inflation was caused in response to the large hard currency debt, so no, there is much more to it.
    Again, BS. Chavez was the target of an intense campaign of demonization from day 1. Your fanatical anti-chavez views are an example of the problem with Latin America's politics: the complete lack of trust, zero-sum world views, etc.

    Anti-chavismo made Venezuela's collapse a self-fulfilling prophecy. The government created policies that helped in the short-term to alleviate the destruction and sabotage of the radical right. These policies resulted in long term problems; which in turn helped to radicalize the left as they blamed the shortages on right-wing hoarding, etc.

    Krugman can pooh-pooh MMT while still baking MMTs assumptions into his arguments about Greece.


    Complete garbage. How does that even make sense?

    The ability of the Japanese govt to pay its lenders doesn't depend on tax revenue at all, so why would they suddenly stop lending Yen to the govt? People respond to incentives and you have yet to show the incentive for people not to lend to the govt.

    So? Like, they have low taxes because the government doesn't need to raise taxes for revenue purposes. There is no reason why Japan couldn't keep running perpetual deficits; you certainly haven't provided any such reason at all.

    The Japanese govt will keep issuing bonds, which will keep removing excess liquidity. There is never a point where the system has to somehow adjust, and taxes have to be raised, if the government keeps the system of incoming liquidity and outgoing liquidity in check. Remember; govt finance is a bathtub.

    Your idea is that bonds will somehow suddenly explode and drown the government in its debts is delusional. It's completely divorced from reality.
     
    Last edited: Dec 15, 2016
  9. luiz

    luiz Trendy Revolutionary

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    Right, @Princeps , people who to this day support Hugo Chávez are the ones firmly grounded on reality.

    I'm done debating with you. Go yell about right-wing saboteurs to someone else. Your grasp of economics can be measured by your support of the world's greatest current case of economic mismanagement.

    If Hygro or another grown up wants to debate MMT, I'm here. You can go back to Jacobin Mag.
     
  10. Princeps

    Princeps More bombs than God

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    I think you should get a grasp on your antagonism.
     
  11. Hygro

    Hygro soundcloud.com/hygro/

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    I'm contemplating. Here's the preview of MMT in regards to traditional Keynesianism.

    Screen Shot 2015-03-11 at 12.28.56 PM.png
     
  12. innonimatu

    innonimatu Deity

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    This is an example of the absurdity of the claims made by "orthodox economists". Pay attention to the lack of logic in this sequence:
    1) Greece has an excessively high public debt
    2) Greece must reduce its public debt because 1)
    3) If Greece reduces its debt by unilaterally defaulting or by repaying in drachmas, it will lose the ability to borrow further (i.e., go further into debt). This is a claim that can be disputed.
    4) Greece must not default or devalue its currency because 3)
    5) Greece must run budget surpluses to repay and reduce the debt stock while maintaining access to borrowed funds.

    5) contains a contradiction. If Greece's path is to repay debt, during the next 100 years or so, it needs no access to borrowed funds during that whole time!
    So why repay the debt instead of defaulting? If the greeks default they may be unable to borrow in the future. If the greeks try to repay the debt they will be unable to borrow in the future, because they'll be repaying (which is the opposite of borrowing) for the next century! The plan to "save Greece" is to have it repay its debt (an endeavor estimated to take a century or so)... so that it maintains an ability to borrow that it will be unable to use? Are these economists entirely incapable of rational analysis? Or are they selling their "expert advice" to be used for propaganda on behalf of the creditors?

    This applies to Greece but it could apply to any other country able to repay debt in its own currency, or to default.

    That a state will be unable to borrow after such a default I actually see as a bonus. It it happens, which I doubt. Borrowing by states should be done only under extreme circumstances, at it serves to transfer public wealth to the hands of idle financiers. And in this I part ways with Keynesians. Developing countries may need to issue debt in order to finance some big projects. Stable countries should never have such a need, except in times of war or to respond to catastrophes. The availability of liquidity can be managed through taxation, and central banks can easily finance the small variations between income and expenditure in yearly budgets when necessary.
    A country that constantly runs deficits (think Japan) is in practice printing money either to cover increases in demand for money (as the economy grows) or to inflate some classes of assets (which usually do not show up in official inflation numbers). This should be done directly by the central bank, and acknowledged as such. What the ECB and indeed Japan and the Fed in the US have been doing in the past few years is just this (because the central banks ultimately "buy"the state debt) but without cutting out the middle men of private bankers, who are taking a cut only for their service of disguising the real nature of this operation. The world is already operating on central banks financing state spending, but with parasites getting rich on it.
     
    Last edited: Dec 18, 2016
    EnglishEdward likes this.
  13. luiz

    luiz Trendy Revolutionary

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    @innonimatu

    I wasn't arguing that Greece shouldn't default and revert to the drachma; I was rather arguing that doing so would have consequences over their cost of borrowing, i.e., it would become so high that they would in effect be locked out of financial markets. So the MMT claim that Greece's bond yields rose as a result of high deficit only because they're in the Eurozone is clearly false. But that doesn't mean that it still wouldn't be best to just default and revert to the drachma. That's a separate discussion.
     
  14. EnglishEdward

    EnglishEdward Deity

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    Keynes deficit financing works poorly today because the capitalists grab nearly all of it and for many countries much of it simply results in increased imports.


    It is much the same in the UK with the central Bank of England providing vast sums in quantitative easing to the
    banks which either lend it to the government to cover its deficit or to corporates for property investment.

    This has enriched the middlemen and created an enormous property bubble which has meant that
    a generation are being priced out of owning their own homes. Home ownership was rising in the UK
    up until 2003 but has since been in decline, hence the new term in the UK of "generation rent".
     
  15. EnglishEdward

    EnglishEdward Deity

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    However the country that has been most successful recently, China, owes nothing of that success to borrowing in the international financial markets.

    I cannot help concluding that those financial markets benefit nobody other than those who own capital, operate in them or make yachts etc.
     
  16. luiz

    luiz Trendy Revolutionary

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    China's gross external debt is of $1.5 trillion dollars, one of the largest in the world in absolute terms. While not huge compared to the size of their GDP, they clearly do see the benefit of tapping into the global financial markets.
     
  17. EnglishEdward

    EnglishEdward Deity

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    Good Morning

    In my opinion, its current value to China is that if the USA defaults they can counter default too.

    Nothing compared to the UK's debt:

    http://www.tradingeconomics.com/united-kingdom/external-debt

    "United Kingdom Gross External Debt 1987-2016
    External Debt in the United Kingdom increased to 6055168 GBP Million in the second quarter of 2016 from 5673074 GBP Million in the first quarter of 2016. External Debt in the United Kingdom averaged 3127301.28 GBP Million from 1987 until 2016, reaching an all time high of 6428718.00 GBP Million in the third quarter of 2011 and a record low of 565439.00 GBP Million in the first quarter of 1987."
     
  18. El_Machinae

    El_Machinae Colour vision since 2018 Retired Moderator

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    Here's why I don't like the gist of MMT. People don't get it. People don't like it. And that makes it bad politics. It's a piece of economic fine-tuning that can ruin things. People prefer balanced budgets, politically, because it makes intuitive sense to them. And so brain-power should be used to create balanced-budget policies that go on to create growth. In the end, policies need to be net-growth in real terms. Doing so in monetary terms is very possible too.

    Wealth always trickles upwards, given the least opportunity. MMT doesn't help that, not in any real sense, because the people discussing it don't distinguish between corporate debt and consumer debt. With MMT, you have to fine-tune to inflation. And that's hard. Technically, it's impossibly hard. Which means it's a government policy that causes victims of mismanagement. You then fall into the 'failure to intervene vs intervening badly' dilemma. And that sucks. But people are vastly more aware of intervening badly, politically.
     
  19. Mise

    Mise isle of lucy

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    I agree with Luiz (and, I think, Bootshoots too, who implied it in his question on the first page) that MMT doesn't offer any concrete policy implications over and above bog standard Keynesian theory. It certainly quacks like Keynes.

    There are clearly risks in fiscal expansion. Those risks are clearly exaggerated by the right for ideological reasons. I don't feel like MMT is telling me anything new.

    Also, regarding the idea that only developing countries are held to such standards, recall the IMF bailout of Britain in 1976.
     
  20. onejayhawk

    onejayhawk Afflicted with reason

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    I am going to take issue with this. The purpose of money is to facilitate finance. Actual finance is done with the promise of something of value, ie real estate, goods, services, goodwill, etc. Money allows these to be quantified. Transfer is greatly simplified. There are aother benefits

    With that as context, this makes more sense

    When a transfer of money does not equate to a valid promise of a transfer of wealth or service, things break down. On US currency, the phrase is, "legal tender for all debts, public and private." It is literally printed on the paper. We are discussing situations where the phrase is not uniformly true.

    J
     
    Last edited: Dec 19, 2016

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