4 ms·

Modern monetary theory is long overdue.

RobertoG 6y ago
I hope so, but I suspect that the people that is predicting now hyperinflation and the enslavement of our children, will keep doing so despise all absence of evidence. Unfortunately, economics is a very ideologically charged subject.
- Qasaur 6y ago
  The harsh modern monetary reality where most Americans live paycheck-to-paycheck and have zero job security or savings is enslavement in all but linguistic accuracy. This has been going on since started inflating our money supply (since when we went off the gold standard in 1971 at least), and the economic degeneration won't stop unless we stop the inflation of our money supply too.
roenxi 6y ago
It is hard to tell if you are supportive or resigned to the eventuality. Just in case it is supportive... MMT relies heavily on the fact that tracing back who is paying for it is so convoluted that its backers can claim nobody is. That isn't true. At any moment there is a fixed pool of real resources that we have to divide up. It is pretty obvious that a lot of those resources should be given to people who will use them to create more real resources in the future. It is also obvious that everybody needs enough of a share to live. A State entity can control the money supply and do strange things with the accounting identities, but in real terms it can only redistribute wealth. The government isn't going to turn to MMT to increase the claim of the makers and innovators to societies bounty; the truly inspired ones tend to be a bit eccentric and tend not to present very well on camera at a press conference. MMT will be a redistribution, by and large, to fast talking and charismatic charlatans or pork barrelling to political consituenties. The political process is not very good at assessing technical risk but excellent at pork barrelling. People will use the word 'fairness' a lot. It is reasonable to say that MMT will do wonders for the accounting identities. GDP through the roof, measured real wages may rise, everyone can be a millionaire, banks will be saved and inflation will be mysteriously low no doubt. The median citizen will also have less actual stuff and a lower real quality of life.
- RobertoG 6y ago
  But MMT it's not a policy, but a model, a description of how the system really already works. For example, many people here is predicting hyperinflation, using the MMT model we can predict that's not going to happen. Many people here are predicting "slave grandsons by public debt", the MMT model tell us that doesn't make sense. >>"MMT relies heavily on the fact that tracing back who is paying for it is so convoluted that its backers can claim nobody is" I don't know what that means. >>"At any moment there is a fixed pool of real resources that we have to divide up" That sentence agrees totally with the MMT cannon.
  - roenxi 6y ago
    >> "MMT relies heavily on the fact that tracing back who is paying for it is so convoluted that its backers can claim nobody is" > I don't know what that means. Lets jump over the the Wiki page on MMT where it has a helpful comparison to Keynesian economics [0]. First line in that table: Keynesian: Advocates taxation and issuing bonds (debt) as preferred methods for funding government spending. MMT: Emphasizes that taxation and debt issuance are not required to fund spending. Under the Keynesian model I can tell who is paying for government activity - taxpayers and lenders. I can also work out how much, by comparing how much tax they pay or how much they lend. It is reasonably transparent about who the government is distributing resources away from (net taxpayers, current lenders) and towards (net tax receivers, people who are enjoying the latter stages of a bond where the interest is payed back). People could have claimed resources; then they were taxed/saved so they didn't. How do I do that under the MMT model where neither of those things are necessary? Who is the government distributing resources away from? How do I figure that out? I know where they are going. Where do they come from? When we debate MMT inspired ideas, how will we figure out who will be worse off in real terms and in what proportion? [0] https://en.wikipedia.org/wiki/Modern_Monetary_Theory#Comparison_of_MMT_with_mainstream_Keynesian_economics https://en.wikipedia.org/wiki/Modern_Monetary_Theory#Compari... PS. > But MMT it's not a policy, but a model People aren't interested in MMT because it is a neat model; but because if we use that model then it becomes very hard to explain that policies are wasteful uses of time and stuff. It is very easy to make a taxpayer understand why government waste is bad. Quite hard to make people take an interest when nobody knows if they are net givers or takers.

I hope so, but I suspect that the people that is predicting now hyperinflation and the enslavement of our children, will keep doing so despise all absence of evidence. Unfortunately, economics is a very ideologically charged subject.

Qasaur 6y ago
The harsh modern monetary reality where most Americans live paycheck-to-paycheck and have zero job security or savings is enslavement in all but linguistic accuracy. This has been going on since started inflating our money supply (since when we went off the gold standard in 1971 at least), and the economic degeneration won't stop unless we stop the inflation of our money supply too.

roenxi 6y ago

It is hard to tell if you are supportive or resigned to the eventuality. Just in case it is supportive... MMT relies heavily on the fact that tracing back who is paying for it is so convoluted that its backers can claim nobody is. That isn't true. At any moment there is a fixed pool of real resources that we have to divide up. It is pretty obvious that a lot of those resources should be given to people who will use them to create more real resources in the future. It is also obvious that everybody needs enough of a share to live. A State entity can control the money supply and do strange things with the accounting identities, but in real terms it can only redistribute wealth. The government isn't going to turn to MMT to increase the claim of the makers and innovators to societies bounty; the truly inspired ones tend to be a bit eccentric and tend not to present very well on camera at a press conference. MMT will be a redistribution, by and large, to fast talking and charismatic charlatans or pork barrelling to political consituenties. The political process is not very good at assessing technical risk but excellent at pork barrelling. People will use the word 'fairness' a lot. It is reasonable to say that MMT will do wonders for the accounting identities. GDP through the roof, measured real wages may rise, everyone can be a millionaire, banks will be saved and inflation will be mysteriously low no doubt. The median citizen will also have less actual stuff and a lower real quality of life.

RobertoG 6y ago
But MMT it's not a policy, but a model, a description of how the system really already works. For example, many people here is predicting hyperinflation, using the MMT model we can predict that's not going to happen. Many people here are predicting "slave grandsons by public debt", the MMT model tell us that doesn't make sense. >>"MMT relies heavily on the fact that tracing back who is paying for it is so convoluted that its backers can claim nobody is" I don't know what that means. >>"At any moment there is a fixed pool of real resources that we have to divide up" That sentence agrees totally with the MMT cannon.
- roenxi 6y ago
  >> "MMT relies heavily on the fact that tracing back who is paying for it is so convoluted that its backers can claim nobody is" > I don't know what that means. Lets jump over the the Wiki page on MMT where it has a helpful comparison to Keynesian economics [0]. First line in that table: Keynesian: Advocates taxation and issuing bonds (debt) as preferred methods for funding government spending. MMT: Emphasizes that taxation and debt issuance are not required to fund spending. Under the Keynesian model I can tell who is paying for government activity - taxpayers and lenders. I can also work out how much, by comparing how much tax they pay or how much they lend. It is reasonably transparent about who the government is distributing resources away from (net taxpayers, current lenders) and towards (net tax receivers, people who are enjoying the latter stages of a bond where the interest is payed back). People could have claimed resources; then they were taxed/saved so they didn't. How do I do that under the MMT model where neither of those things are necessary? Who is the government distributing resources away from? How do I figure that out? I know where they are going. Where do they come from? When we debate MMT inspired ideas, how will we figure out who will be worse off in real terms and in what proportion? [0] https://en.wikipedia.org/wiki/Modern_Monetary_Theory#Comparison_of_MMT_with_mainstream_Keynesian_economics https://en.wikipedia.org/wiki/Modern_Monetary_Theory#Compari... PS. > But MMT it's not a policy, but a model People aren't interested in MMT because it is a neat model; but because if we use that model then it becomes very hard to explain that policies are wasteful uses of time and stuff. It is very easy to make a taxpayer understand why government waste is bad. Quite hard to make people take an interest when nobody knows if they are net givers or takers.