Posted on 07/08/2024 6:38:53 AM PDT by Kaiser8408a
MMT is mostly magic! The Federal Reserve relies on “The Power of Magic” to fool people. For example, the massive increase in money printing following Covid and Biden’s disastrous economic policies (or FOLLICIES).
Modern monetary theory (MMT) is not convincing to most trained economists of various schools of thought. This causes many to balk at MMT and mock it, some of which is warranted as a reductio ad absurdum, especially given some of MMT’s more outlandish claims. In fact, my own thesis was an Austrian critique of MMT.
But there is also a fair amount of hypocrisy in the non-Austrian (e.g., mainstream, Keynesian, monetarist) critiques of MMT by mainstream economists. The truth is that most, if not all, of these economists share the same faulty presuppositions regarding what is euphemistically called “monetary policy.” The difference between mainstream and MMT economists is usually one of degree, not of kind.
Alan Greenspan, former Federal Reserve chairman (1987–2006) and most definitely not an MMT proponent, made a very MMT-friendly claim: “The United States can pay any debt it has because it can always print money to do that, so there is zero probability of default.” While this is literally true, and points to the fact that the nominal debt and dollars are not the issue, it overlooks the distortionary consequences from this manipulation on the entire structure of production. Nevertheless, such a claim is often also repeated by proponents of MMT, as if it contains some magic missing ingredient to unlock greater stores of wealth.
In fact, MMT provides a warranted critique to other schools of economic thought that share an underlying premise while not arriving at the same conclusions. .
(Excerpt) Read more at confoundedinterest.net ...
“The inflation of money and fiduciary media (artificial credit) causes economic miscalculations and boom-bust cycles, distorts the structure of production, encourages capital consumption, undermines the actions of individuals, discourages saving, transfers wealth from the citizenry to the government and those who are politically connected, affects money’s purchasing power, and has a whole host of other unintended effects.”
All bad, imo.
No, Alan Greenspan is correct. We get to pay debts in dollars we print. So we won’t default. But, doing so recklessly would create massive problems and could potentially wreck our economy for decades. But since we sell bonds with varying degrees of time to maturity, we could print and buy the debt back over time, even sell some as we buy more with a plan to pay it down in shorter or longer time periods. Doing so would probably be inflationary or hyper inflationary depending how fast it was done. But if we didn’t sell more bonds - or at least kept buying back more than we sold - those dollars would ultimately work their way into capital investments. If we had sincere leaders who know what the hell they were doing (or weren’t doing the bidding of well heeled industries) there could be a way to ease out of it. But first, we need to get our budget under control.
“I don’t know for sure but Nobel prize winner Paul Krugman seems like the sort of “real economist” who might step up and declare it a swell idea.”
He didn’t declare it a swell idea.
He didn’t say it would eliminate the debt.
Endorsed by Tlaib and Nadler!
No, Alan Greenspan is correct. We get to pay debts in dollars we print.
But first, we need to get our budget under control.
>>Capitalism has failed....Buy farmland. Buy oil wells.
If Capitalism has failed why would you buy anything to resell? That is Capitalism.
>>
Who said anything about reselling?
Calories and joules. Those are defined values, defined by physics. Dollars are defined by whimsy.
We are a lazy, addicted, ignorant, and undisciplined society. We will not change until it all comes crashing down.
And that arrives when the rest of the world doesn’t accept the buying power of the US dollar.
Hyperinflation.
Oh Ponzis can end well.
Caesar owed his troops many months of pay. So they marched into Egypt and took all the gold in Cleopatra’s treasury.
Presto, payment.
As long as money is printed and police are paid, it cannot come crashing down.
The end is defined by scarcity. Of oil.
When food is not available at any price, because there was no transportation of it to shelves, then things come crashing down.
Oh Ponzis can end well.
Caesar owed his troops many months of pay. So they marched into Egypt and took all the gold in Cleopatra’s treasury.
Presto, payment.
Going full Zimbabwe. Put Krugman’s face on the trillion dollar note.
Or Alfred E. Neuman. “What, me worry?”
Well of course. I thought you were suggesting it cannot end well in that it would fail.
No, Ponzi’s don’t have to fail. Brute force can fix anything, other than oil scarcity. Brute force generally has no power over geology.
No, Ponzi’s don’t have to fail. Brute force can fix anything,-——————————————————————
It just fails differently. Some people get paid and some don’t. whether brute force involved or not.
manipulation is just the usual method.
I agree but you are confusing Capitalism with Monetary games.
Capitalism has and will never fail. It has been here since the beginning of time and will be here with us forever in either a large and open way or small secret groups.
When printed money is worth a fraction of its value, it isn’t going to pay for anything, to include police. Particularly quality police.
I remember when we were paying Nicaraguan Contras with trash bags of their money. It was nearly worthless, and the lawlessness in Nicaragua today is famous.
1 USD = 36 Cordobas. Even after steady 4% GDP since 1996. The problem is their money isn’t attached to anything of intrinsic value. Soon to be an American problem.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.