Stephanie Kelton: The Public Purse
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- Опубликовано: 1 июн 2024
- As part of the lecture series between UCL Institute for Innovation and Public Purpose (IIPP) and the British Library, Stephanie Kelton speaks on why a government budget should not be looked at in the same way as a household budget
www.bl.uk/events/rethinking-p...
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UCL Institute for Innovation and Public Purpose
The Bartlett Faculty of the Built Environment
Website: ucl.ac.uk/iipp
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Drawing on her experience as the Chief Economist on the US Senate Budget Committee, Stephanie Kelton gives a beginner’s class on public deficits and what (almost) everyone is missing in the debate over the government’s budget. Is the government’s budget really just like a family budget? (Teaser: It’s not!) What is the purpose of budgeting anyway? Is it to balance spending and revenue, or is targeting a balanced budget the wrong goal altogether? Is the British government living beyond its means?
Stephanie outlines a new way of understanding deficits, debt, taxes, the relationship between the public and private sectors, and what our economy could look like. Turning the public budget into a participatory, mission-oriented endeavor is critical to restructuring public services and public investment and building the kind of economy that will deliver a cleaner, safer, more secure future for all.
Rethinking Public Value and Public Purpose in 21st Century Capitalism is a lecture series presented by UCL’s new Institute for Innovation and Public Purpose in collaboration with the British Library.
www.bl.uk/events/rethinking-p...
Featuring luminaries from the worlds of arts, economics, architecture and design and policymaking, it considers the role of the public sector in today’s capitalist world and asks what partnerships are needed to address societal and technological challenges? How can public spaces be designed to create more democratic participation and new forms of learning and exploration? Does public necessarily mean free? Can the digital revolution create a new type of public realm?
Speakers include Richard Rogers, Stephanie Kelton, Jayati Ghosh, Lucy Musgrave and Mariana Mazzucato.
The events are free but booking is required.
During WWII in Canada the MPs were concerned about the growing debt. When one of the MPs commented that the government debt was a private sector asset, the governor of the Bank of Canada agreed. The finance minister then commented,” If the government debt is a private sector asset, how do we make it an asset of the people.” And national health care, pharmacare, universal daycare, national pensions, national highways, railroads, etc. are examples of how this has been done.
Herbert - You are not such a wise man after all if you believe her false rubbish but you are just soemone who is open to being easily misled.
Take this for instance:-
Kelton's claim is that the government is subsidizing people's savings.
It is utterly false and based on omission of facts.
That is because savings in the private sector can only be achieved after people have produced something and sold it and some of the proceeds retained and not spent.. They do not come from government and the reserve banks producing more units of fiat money since the fiat money is worthless without goods and services being produced before the fiat money is produced. Besides that fiat money can only be produced with accompanying debt that the private sector is forced by the government to pay for when that debt matures and must be paid out.
That is when those Treasury bonds created to produce that new money actually mature.
Kleton ignores this fact to put across her false idea that savings somehow are created for the private sector by creating more fiat money when the reality is they can't.
@@Rob-fx2dw How many other myths do you believe? As for the Wiseman comment. How original. Nobody ever thought to say that to me before.
I have savings and never produced anything for them. They are unspent income from my pensions.
@@Herbwise You should have taken more seriously that comment that you sarcastically replied to with "How Original.... ".
You also said "I have savings and never produced anything for them.". How narrow a view.
The reality is if you have savings and nobody else or you produced anything for them they are utterly worthless.
@@Rob-fx2dw your comments are hilarious. Utter nonsense...but still hilarious.
@@didyeaye2481 You have some rational answers I suppose Or are you just incapable of a rational reply so you revert to a meaningless response void of facts.
I've been following Stephanie for years. She is continually upping her game and explains economics better than anyone. I have personally asked her to write a book for the general public. I anxiously look forward to it.
It comes out in June!
That went well!
11:15
Today she actually would have a good example as what she is describing is happening in China right now. People are trying to build up savings and it's leading to deflation and great difficulties.
Brilliant, engaging, accessible. Professor Kelton has built a great big body of argumentation that has extreme ability to persuade. I learned MMT from her.
Do you fall for MLM schemes too?
Mariana and Stephanie are brillant speakers.
Wrong😂
Very interesting take on things. Supporting data and actual empirical unbiased evidence to support this hypothesis more would be helpful.
A historical analysis of how this monetary policy has been implemented in other countries and epochs and to what results is needed here, as well as an analysis of the relationship between Federal Reserve and the US government.
There is also communist economies to consider who did function despite not really having taxes in the traditional sense.
The closest thing to this would be the US itself during WW2. While officially the US was still on the gold standard that standard was pretty much just abandoned for the sake of the war.
Superb from Stephanie. Thanks for making such a great recording with inserted slides etc.
An interview she did on Feb 8, 2024 titled “Was MMT right about inflation?” at 12:25 she says, “We are getting real GDP numbers that are eye popping”---She is ignoring the elephant in the room which is, how much debt was incurred to get those “eye popping numbers”? In 2023 the US government borrowed $3.2 Trillion, of which only $2.4 Trillion of GDP was recorded. The remaining $800 Billion generated ZERO economic activity whatsoever. She talks about the “multiplier effects” yet every 5 year period since 2006, GDP grew by much less than the increase in the debt which means that money vanished without generating any GDP activity. We would have been far better off taking the entire $3.2 Trillion borrowed and spent it entirely on battle tanks and aircraft carriers. We would have gotten at least $3.2 trillion in economic activity from such wasteful spending and that is with no economic multiplier effect, which is pretty hard to do. This consistent, horrific economic multiplier effect of less than 1, for the last 18 years goes against MMT theory. This theft from the US populace shows that government cannot, and should not manage all but the smallest amount of public money since they are evaporating money in a way that not even the Mafia could do.
"The Government is not a Household", ..any more, unless you mean the House of Parliament has no hold on good governance.
So when David Graber says "Anarchy is democracy without a government" that observation goes directly to the understanding of individual education as to what their personal responsibilities to the society and what they receive in return, has to be seen in the light of Michael Hudson's assessment of historical forms of "family" Household Regency, and the will of the people to participate in collective survival by personal contributions. This is the continuing commitment to processes of governance.
So good governance does not come from households who know what they are doing public, private and personal, because inequality has of household recieval of the benefits of resources management are completely distorted. This is the reason for the talk, and 5 years of incremental push hasn't made the world of difference?
Excellent Teaching.
I agree with most of MMT, however I feel Prof. Kelton should start with explaining to people that money is only a vehicle (or record) for storing and exchanging past value creation and debt a promise of future value creation [and as such also money].
The amount of money in circulation needs to be constantly adjusted to exchange and store the value created (labor and goods/services) at a point in time while also considering the potential for future value creation.
Therefore a currency issuer constantly needs to inject (create) and withdraw (delete) currency from this cycle to adjust it to what is actually happening out there. [Remember that modern money is only a vehicle not a value in itself].
So what some call government debt is in many cases only a adjustment in money supply to match the value creation (defacto and potential) of an economy at a certain time. As such new money can help free up unused value creation potential in a society (even beyond the traditional 'economy'). I feel this might help to understand the whole theory a bit better.
They (Mazzucato and Kelton) came correct, right out of the gate.
Kennedy didn't say, '... uuh, yea... uhm, if we can find the money in the budget and make it deficit neutral, ... um, we'll take a shot at going to the moon... maybe, ...some day...'
He said, 'We're going the moon by the end of the decade... not because it's easy, but because it's hard (period).
Where did our balls go?
P.S. Great editing.
39:55
To an extent. The EU does give large amounts of Euro's to the countries every year and also does spend Euro's in it's own right.
1:24:00 She has already said that the public needs are decided at the local level.
i have a question for stephanie -----since MMT seems to meld economics and accounting ---and since currently governments inject more money into the system on an ongoing basis creating DEFICITS which cause people heads to explode as if it is bad ----why not eliminate that concept entirely and create a gigantic opening number for available money pool in the government T ACCOUNT and record all spending as draw downs against the pool ------in that way you have a constant indicator or wealth growth in the corporate and individual sector of the economy which is a more positive idea than fretting over deficit spending ----government are eventually going to hit the opening number anyway
nice idea✅
Yeah, the term "debt" is kind of a holdover of the gold standard. Back then government bonds were considered debt because they weren't backed in gold like dollars were and they were mainly used when the government had to spend a lot of money very quickly and didn't have time to amass the gold reserves to print more dollars.
So calling that "debt" makes sense cause it's paying for something that you don't have the money for right now.
However since the abandonment of the gold standard calling treasure bonds "debt" doesn't make much sense since now neither they nor the dollar is backed in gold.
What is needed is an honest medium of exchange and less greed, a whole lot less greed.
Love her kind
Please come to New Zealand and talk to our finance minister. He thinks that he has to run budget surpluses to pay back government debt. I think that he has no understanding whatsoever of how the governments finances operate.
So how do we get an MMT event in NZ?
A good question. As individuals there is probably not much that we can do, it would need an organisation of some sort to host an event.
Bill Mitchell gave a presentation at Victoria University last year and also spoke on RNZ but I don't feel that he made much of an impression on the audience. Neoliberal ideology has a very strong grip on this country from the general public through to the politicians, economists and journalists.
There is a website for MMT in NZ here. unframednz.wordpress.com/2018/06/ . A meeting place for like minded people perhaps.
We need a progressive macroeconomics conference that shifts the thinking on fiscal policy and deficits. That is key. Labour and the Greens should be promoting something like that - rather than tripping over themselves trying to look prudent. It's very frustrating.
Unfortunately I think that Labour are now a lost cause after all they started the neoliberal era, but why the Greens are going along with it all is a mystery.
It was also disappointing to hear Winston speaking about fiscal responsibility and putting money aside for a rainy day.
I don't think that the politicians will change their outlook until the voters understanding of economics changes, as it would probably make them unelectable.
We are fighting very powerful and wealthy forces that control pretty much everything that happens, not just in this country but around the world, even down to what is taught in economics classes at university.
You are right of course about inertia. But ideas do matter - as Keynes said about the scribbling of defunct economists - and MMT is gaining momentum - the job guarantee is a great idea that most people can come to grips with and support even if ongoing deficits or overt monetary finance are challenging to the gold standard mentality. Think about MMT 10 years ago compared to now. NZ needs to be "shown the light".
I really believe if we can keep educating Conservatives, Liberals, and Progressives we can win them over! I am a self proclaimed Progressive. If we can make the light bulb go off we can have all Sanders policies and more even if tax rates stayed at Rebublicans tax rates. Even though technically I prefer creating more brackets over 1 million a year.
Land tax best tax
Ignoring the ugliness of the right as it exists for a second, conservatives need to play some role in a democracy by opposing radical changes and preserving institutions. It is a hopeful vision that these ideas will one day percolate to all sides of the political spectrum. We could really escape these false austerity policies.
She also falls into a trap in talking about deflation in a very neutral way. In practice it usually is very messy with strikes, violence, populism, corporate crime and all that stuff. People don't want to go bankrupt and starve so as an economy deflates every individual will do whatever they can to keep afloat.
A problem though is that many prefer the explanation that we can't afford it over the real reason we can't have nice things. That is that there are a lot of rich powerful people who control our political system and who want to keep their power and wealth. The main reason the US doesn't have a public healthcare is because it's incredibly profitable for the private sector. Even though the private sector is doing a bad job on almost every level the US government is so corrupt that pleasing their donors matters more than making decisions that are good for the country.
That's also the main reason the myth of limited government finance exist. To hide the truth that the government is making decisions that are bad for most people because they are in the pocket of a handful of rich assholes.
Nanny? Housekeeper... different snack bracket than the one I'm in!
Well, she is a World Famous Economist that gets paid tens of thousands of $ for a 2 hour speech.
Brilliant!
Two concerns: 1. I want to hear her expound on UBI; 2. I want to hear her discuss the theoretical limits of MMT. Clearly, you can't double the money supply, all things being equal, and expect no inflation. What are the limits of MMT, and how would we set the bounds?
Brian Lund the boundaries are inflation. That is one of her what most concerns
Though true there is not actual limit, the government could keep printing money and never be insolvent, but there is a confidence limit. The confidence limit is the limit dollar holders have before they no longer want the dollar and began rapidly selling it, thus hyper inflation.
@@dannywindham3295 And it seems like inflation is already in the room as the government just starts to unpack MMT.
@@digicandy70 can't even hit the feds rate of 2% Target
@@dannywindham3295 Tell that to the market. If it was so the market wouldn't be selling off like it is. Along with inflation, interest rates are on the rise. This, unfortunately, most likely will continue to negatively affect both bond and stock prices
This is so good.
Listen to Steph america. Nice Video.
Stephanie you are wonderful!
How will you pay for it? By check.
we paid how for $15T to bail out goldman sachs and some other criminal enterprises?
"Nah, I think I'll just ignore scarcity"
You didn’t listen well . She did cover the limit and resources. Economic and political constraints etc
@@anurakeppe9853 She's acting like there's little to no consequences to printing trillions of dollars.
@@jorden9821 she never said that . She talks about limits . Listen without pre conceived ideas . You might learn something new. All economies are theories.
@@anurakeppe9853 it follows that some of these theories must be incorrect 😂
@@anurakeppe9853 obv she has to acknowledge there are limits, but she's advising that there is any amount that we can create without first having the production increase without seeing drawbacks. That's untrue.
What's the limiting principle? Why do I need to pay taxes at all if you can simply create more currency without consequence?
To manage inflation, and to make the currency valuable. She goes into more detail at about 48 minutes in.
MMT does not say spending (or taxing) is without consequence - depending on what the money is used for (e.g. useful sustainable job-creating infrastructure vs extra $$ for mega-rich), and whether there is stuff to spend on (eg giving $$ to people when there isn't enough goods/services to purchase causes inflation). MMT advocates balancing the economy in a useful and sustainable way, rather than focusing on 'balancing the numbers'.
@@trishna_6815 Wrong - Taxes do NOT remove money from the economy because they are used to fund government spending. If they didn't the budget would have always been in a deficit almost as large as the total of spending.
Taxes transfer spending power to the governemnt and away from the private sector.
Government the USER of the money as Warren Mosler himself admits in this reply about Taxes driving the deficit lower :-
Mosler says himself ( at 1:03 55) on his interview of March 2021 on “Forum with Warren Mosler”
- ruclips.net/video/yja-CbThoeU/видео.html&lc=Ugy4sajDbcGZDbwfNax4AaABAg.9MOSjQuBLRB9MkfnyGXtCn:-
Mosler "“When taxes go up that drives the deficit down”.
It is another revelation of the contradictions within MMT itself and a contradiction of what he says elsewhere about money collected from taxes being destroyed..
@@trishna_6815 There is too much economic illiteracy in this to try and fashion a response in a RUclips comment. I'll simply say, I re-watched the section of the video around the 48 minute mark, and she does not come anywhere close to defining a limiting principle. I'd like to see some numbers, a formula even. I'm sure it would be logically bankrupt, but at least it would prove she has thought about it.
Furthermore, the idea that we went off the gold standard so we could fight more wars... Shouldn't Bernie supporters have a problem with this?!?!?
@@pauld7112 the limiting principle is the material resources available (and how you want to organise the society/economy).
not sure if she mentions it in this talk but she does go into more detail in some other lectures that are on YT
@@trishna_6815 If you can find a place where Kelton goes into detail (specific numbers, formulas) concerning a limiting principle I will be impressed. I will simply then say that I disagree with her instead of calling her a charlatan.
@15:58: "Turned their homes into ATM machines..." A machine that makes ATMs? Huh? Their homes were making Automatic Teller Machines? ORRRR did they simply turn their homes into ATMs? :) :0
46:35 "taxes for revenue are obsolete" - fed banker
One Fedreal banker's statement but what about the other hundereds who didn't make such a foolish statement that ignores a many other factors.
@@Rob-fx2dw Your comment ignores the lecture.
@@c.k.roberts3221 The lecture is rubbish. That's easily seen if you care to do some research. MMT is rubbish that ignores historical facts to put across a false narrative.
Such historical situation is the reality of taxes failing to put any value or acceptance of the money into the currencies of 30 or more countries in the last 70 years where massive inflation caused a total failure of the currency that was so bad it became worthless . Even their own governments dumped their currency.
In fact, haircuts have entered the financial dictionary, it's another way of taxing the well-off. But you have to be prepared to do it. All too often governments end up being talked into a different narrative (the prevailing one) which ensures the richest remain so. It's the ultimate FUD narrative?
Monopoly the game doesn't account for the fact that there is a limited number of items to buy.
Wonderful info! There is hope.
Lana Dell hatestheclock no more hope than praying for a billionaire to give you a few million out of the giddiness of his heart. This is voodoo economics. The prescription aspect of MMT not the Discretion.
A billionaire is not the currency issuer, what was the source of all of his money? It has to have been issued by his government in the first place. I think that you do not really understand MMT.
truthseeker Lol! I have been an MMTER since 2006. Long before you read a couple of oversimplified memes and watched a RUclips video or two about MMT. Which you now think makes you an expert! Laughable!
Thry this on for size
GOV'T DEBT = PRIVATE SAVINGS
For who in the private sector is the vast majority of the deficits are savings? The top 5%!! Not the bottom 95%! You have been bamboozled into thinking that increased deficts will make you rich under the brand of MMT. Wrong!! It only makes my billionaire friend rich! You only get to peak gum off the sidewalk in a Soviet Job Guarantee used as a middle man to pump more savings to the top 5%.
No JG or increase deficit ever fix inequility or pump the 95% full of savings. Sorry to break it to you!
I also have studied MMT for many years and read and listen to many MMT economists such as Bill Mitchell, L Randall Wray, Michael Hudson, Steve Keen, Steven Hail, Warren Mosler and others as well as Stephanie Kelton.
One of the purposes of a well structured tax system is to reduce inequality and stop too much wealth accumulating into the hands of a few. For an economy to grow and for people to save running a deficit is necessary and in New Zealand's case where we also run a trade deficit.
truthseeker you have studied the memes, sound bites, and cheap sloagans of MMT. Obviously.
Otherwise you would know that all deficits end up with the top 5%. The simplest of all things.
All of the V shape recession recovery came from Private Sector just took on bigger debt. Now they can't take on more debt and economy suffers.
The answer given at 1:08:09 demonstrates the fatal flaw with Dr. Kelton's argument for MMT. How could we expect that any globally dependent economy would be able to buy the materials that it needs if its currency dramatically loses value? MMT is predicated upon currencies that are held in reserve, like the US dollar. MMT is founded upon US dollar hegemony.
Most countries issue their own currency. It's not a fatal flaw because MMT outright says that this does not apply to countries who do not issue their own currency.
You didn’t grasp the logic. Try to leave your set mentality. (Economics are all based on theories, not a science)
As an amateur, I would say that a currency implies faith, hence fiat. The pound is not a reserve currency per se, but has full faith anyway. Make sense?
I would love your thoughts on this premise:
To believe that MMT has not been understood since the time of Keynes is naive at best.
The reality is, it was just not pragmatic to implement these ideas until such time that all the benefits of hegemony, and being a printer of the world's reserve currency, had come to an end. Until then, neoliberalism was the most pragmatic option to convince the citizens of the developed world to desire (Reagan and Thatcher's winning pitch to the people). Those responsible for manufacturing the needed consent fully understood this reality.
The last kick at the can for the developed world was going to be the China-driven globalization that began in the 80s. The U.S. has ridden this wave about as brilliantly as it possibly could have (the central bank, and the fiscal policies implemented, regardless of which party was in power, as hard as it is to believe, did an amazing job, for Americans, even though it may not feel like it right now). It was better to let the wealth become concentrated in American hands versus letting it leak out. Wealth in American hands can be taxed back easily enough. Wealth in the hands of non-Americans can only be taken back by providing goods and services in return. By limiting the leakage, the developed world prolonged the benefits that accrued to it for as long as humanly possible.
When globalization comes to an end (no longer a win-win for the U.S. and China), the policies you recommend are going to be the policies implemented by developed-world countries. Some are already more along the path than others. The relationship that existed between the developed world and China will now exist between China and the developing world (especially Africa).
Thank you for sharing. China has financed its development by using government credit for productive purposes i.e. issuing government obligations that are traded among the enterprises and can be used for private consumption. That is Keynesian.
@@sonjak8265 supply side tho
Hi. On that relationship between China and Africa, I kinda have the same view but I doubt China would give up it's industries the way America did
@@kennethisaac233, industries are okay to give up as long as you are paying for the imports with a currency you can print at zero cost.
You can always get these industries back when others no longer have to accept your IOUs as they develop their own self sustaining economy.
And, this is sold to the masses as a win, the reshoriing of jobs, when in fact, it is the end of an exorbitant privilege.
A thing also is that most deficit arguments are made in bad faith. They are usually used as a cover for corrupt politicians to push unpopular agenda's and to try to discredit competent leaders.
The deficit is sort of a all purpose weapon to attack political rivals of if you don't have any legitimate arguments.
Totally simplistic and academic. God help us!
what were you expecting in 1.5 hr intro talk?
Adjust your expectations.
There are textbooks available, and she's just written a book.
@@DrChill2 A book on utter foolishness.
Modern Monetary Theory may have a place in Economics, but it requires being explained at a much higher level than this. She sounds like someone speaking to a high school class.
@@digicandy70 My takeaway from this talk of what MMT is is that you can create all the money you want and shovel it in the front door to achieve whatever aims you want, then shovel it out the back door through taxation to regulate inflation.
That red beret guy in the front row is dope.
If Corbyn had a twin....
Che Guevara may not have been killed after all.
Kelton is so self deluded by her MMT belief that she believes money is economic problem and can't even discipline herself to listen to a single paragraph of what the real problem is even when it is spelt out to her. The quantity of Money is Not the problem. It is the resources that are.
An example of this is her reply to what Greenspan said in the following video clip that she has posted herself.
Refer to ruclips.net/video/TkDLagTs1eg/видео.html at the 8 minute mark where Greenspan explains the situation and Kelton ignores the critical part of the explanation and selects only what she wants to hear which is the first part of the Greenspan explanation as to why government should not rely on money printing to solve the country's problems.
It's the REAL Resources and their production At The Time that is the constraint - NOT the money !!
She explained that, you missed it.
When Britain colonized Africa they offered guns for the tribes who wanted to be dominant in exchange for African produce to replenish ships and even water and all sorts of favors.
Money could initially buy nothing withing Africa because it was not their currency. It could later buy other British goods or be used to buy other imports from elsewhere.
It could however buy produce such as water for their ships and produce to re supply their ships and gold then later diamonds.
omg Sandra Bernhard
There is a big limit to this, otherwise, everybody is going to work for the government and everything will be fine, what if the government hire total population
This is nuts. It could only work for the US as long as the world holds on to the dollar as the reserve currency. Once everyone else stops wanting to trade real good for paper, what are they gonna do? Its very toxic and selfish to think that way.
Imagine playing the Monopoly game when one player starts with $6500, another gets $700, and three others get $100. That is what the American economy looks like.
Are we saying the owner of Park Place should have an income the same as the person in Jail?
@@digicandy70 No. I think the commenter is referring to the beginning of the game. Problem with that is that it ignores the fact that different people have different intelligence and skill levels so productivity across the board is bound to be uneven. Life is just not like a game of Monopoly.
I do not understand the problem being solved by a Land Value Tax.
My idea on Basic Income was that for every dollar you made outside of the Basic Income Guarantee (BIG), you lose 50 cents of that Basic Income. This makes it a graduated scale that doesn't help those making more than double the BIG, but gives 50% of the BIG to those making the same as the BIG's base cost (thus their effective income is 150% of the BIG).
I read her book “deficit myth “ in two days . So interesting. I’m fully convinced about MMT . MMT is always there . I’m a lawyer but Stephanie convinced me to take an active interest in economics. This is absolutely fantastic awareness by her
Read more 😬 This is a scam to get you to support printing money to fund the wealthy at the expense of the poor.
@@jorden9821 it’s basic intelligent. Yes I do read and do my research before come to a conclusion. The law has given me training to look at evidence prior to making judgments. We won’t prejudged anything and always keep an open mind . I know it’s a difficult matter for many who have set views on things.
@@jorden9821 as Stephanie says, it is necessary to tax the rich if they end up with too much money, and it may also be necessary to distribute money to the average citizen via a Basic Income system. What you point out is absolutely correct, but designing your budget includes addressing those problems.
@@lawrence18uk lol how do you think they end up with this money first of all? Second, how do you determine how much is too much?
@@lawrence18uk there is no necessity to redistribute. The vast amount of wealth inequality has been caused directly by government intervention. If you think they're your saviors in this regard you're gravely mistaken.
24:30
basic income is supposed to be only for people who make less. then you do something like making people pay back 125%, say, of what they should not have gotten
Now can America have a Social Democratic Utopia!!
God help us with this foolishness.
I would like the professor to explain how the law of accelerating issuance and depreciation fits into her theory. Increasing the M1 leads to inflation and we have numerous examples in history. Inflation favors the rich and impoverished the poor. It also exports devaluation of your currency to those who hold it, thereby reducing your debt at the expenses of everybody else in the world. You can do that only if your currency is a reserve currency. A fact Americans have prospered on since Breton Woods.
Actually I was of the impression that inflation, as long as it's not happening too much, too quickly is actually beneficial for the poor. Since it reduces savings and reduces debts it makes it easier to gain capital and harder to hang on to it. Deflation does the opposite by increasing debt and savings. It also reduces spending making it much harder to get started as a business.
In the US right now the inflation itself isn't the problem, it's the wage suppression. If you keep wages down then even gentle inflation will eventually really hurt the working class.
For many countries though their relationship with the US is also a major thing. The US can use national debt to justify sanctions and try to get rid of a government it doesn't like. It did this in Venezuela especially. The EU also has this where countries with large deficits often get punished by the EU.
@@MrMarinus18 inflation reduces savings indeed. But if you have disposable income above emergency savings, you don't keep that in the bank....
@@juergenernst1320 I see, that makes sense. If you have assets they will likely grow when there is inflation.
@@juergenernst1320 I do think though that "inflation" is another buzzword that needs to be deflated. Cause right now it's used as an argument to block any kind of public spending and used as a weapon to discredit any kind of policy that serves the poor in any way.
"Inflation" as a term is used to scare people but it's meaningless without context. Gentle inflation is harmless but with wage suppression it's very dangerous. Inflation coupled with a very robust welfare state actually can increase the purchasing power of the lower class.
We do have to find a way to deweaponize the word "inflation". that we no longer have that people think inflation=disaster.
Only way
There are geopolitical reasons why the US needs to bring jobs home ---- A country that is deindustrialized is vunerable and this is NOT GOOD.
Exactly, this is the important point that I felt Steve Keen was trying to make in the Keen-Mosler debate. You need a productive economy for prosperity and resiliency. That can often be as important as the products themselves.
I hope people look back at this comment in the throes of Covid and beyond.
So you’re saying Trump was right all along...
I approve. 👍🏻
The ultimate triumph of MMT is the USSR. They industrialized massively in a very short span of time pretty much completely on their own.
43:25
Though taxes for the rich should go up in the US. They are hoarding way too much money.
Much love Professor Kelton but "The nanny is a luxury"
Oh. My. God.
That is not what she thinks. She is quoting an ordinary person who has to balance her budget and has to be frugal
is she saying that domestic trade deficit is bad because less people are buying stuff with USD. Less euro/yen being converted into USD?
Depends where you're heart is
The worldwide "reserve status" of the U.S. dollar, together with the slowdown in the velocity of money resulting from the pandemic, will permit us to issue $gazillions of Fed Res Bank monetary inflation "stimulus" money (Helicopter Money, as Milton Friedman put it), with relatively little price inflation, but that will not last. Monetary inflation invariably causes price inflation.
But who’s thinking of what happens after the pandemic ends? Live for today and let tomorrow take care of itself is the rule. Incentivizes policy makers to keep the lockdowns going on for as long as possible to keep the world economy from overheating.
Though considering just how much wealth is being hoarded by the elite I feel there is plenty to take away without impacting people's lives in a negative way. The thing is to no longer have to be forced to have 2 policies at once. That you can spend when needed and collect taxes when needed individually.
And Friedman is kind of dubious of merit. A lot of his theories are on shaky grounds in terms of evidence. He also is a firm believer in the magical powers of the private sector to be more efficient than the public one even if there is no reason for that to be the case. The private sector usually has a strong incentive to be as least efficient as possible from the perspective of the market. To try to get as much money for the least amount of service. This is something that's easily visible in the US healthcare system which is the least efficient in the entire world.
The US prison system is the same way with other prison systems blowing it out of the water.
This inefficiency is not a bug but a feature. The private sector always tries to extract as much as it can for the smallest input it can get away with.
Japanese economists are panicked.
University of Tokyo, Hitotsubashi University, Keio University etc.
しょぼいコメントすな
Classic example of theory in a vacuum. MMT Ignores so many real world scenarios. There is no free lunch..
It doesn't need to.. you need to look at your real ressources not your imaginary ones
Sounds like shovel good money in the front door and shovel bad money out the back door. What has real value in this scenario?
There is actually free lunch if you can grasp the concept well. She did talk about availability of resources and other constraints
Keep dreaming . Everything has a cost, you cannot print your way to prosperity. It has been tried and failed miserably every time. Look at history. Avoid emotional bias…
Why not? Does god say the US government can't give people something when it chooses to?
If you want to ask where the money comes from the answer is sovereignty. The US can buy whatever it wants in it's own territory because it has sovereignty over it and the US has much more sovereignty than that. It has influence and power over almost every country in the world to some extent or another.
All MMT is really arguing for is that this power is used to benefit the people instead of just the billionares.
MMT itself is a great theory but the problem is these people have a conservative vs liberal ideology. Ideology must not interfere with academics. These people limit themselves by some childish ideology based on NOTHING.
With MMT we can have the money to pay for both guns and butter. Yay!!
Just kidding...
Lol 😂
profit and poverty go together.
That’s a narrow view. No one would have a job if profits didn’t exist in a free society.
@@januarysson5633 What was I thinking? Thanks for the post. Have a nice day.
Household saving is only detrimental to the economy when the money goes into the proverbial mattress. When the savings are deposited in the bank, they are available for borrowers to invest. And while it's true that sovereign governments cannot "go broke" (meaning they can always create more money out of thin air), doing so invariably depreciates the value of all the money previously circulated. It's an eternal truth that monetary inflation produces price inflation, although not always instantly.
Even if money goes into the mattress it still does its job of raising the purchasing power of the people who use that money. Even if you burn your money and not spend a single dime, the purchasing power of the people is raised. Your contribution to the purchasing power is when you provided a good or service to earn that money. Keeping money in a mattress will not remove your contribution to the economy, because your contribution came before your earnings.
That kind of assumes though that banks make good investments and are stable. Most banks in the US ship most of the money to tax havens or put it in risky investments that then blow up.
The idea that the value of the money decreases makes sense but the evidence just isn't there. When the US was throwing fiscal responsibility to the wind in the 1930's when they enacted the new deal the dollar only increased in value.
Also the country that has printed the most money is suffering from large scale deflation (Japan).
@@holdmybeer123 Also it prevents large concentrations of wealth.
The problem with large concentrations of wealth is that they give people power and that power usually doesn't stay limited to the economic realm. The massive wealth inequality in the US is also causing a lot of bad government decisions because of large scale corruption and the economy often suffers from market manipulation by powerful megacorps. Megacorps can also use their power to suppress unions and suppress wages even during a labor shortage.
This is not a new thing btw. In Europe there are many stories of corrupt aristocracies ruining countries. Examples include the Netherlands, Hungary, Poland, many of the German states and to an extent France.
She actually said that like a Hispanic, but that to degrading so she said she sounded “ITALIAN”
German Euro*
Absolute power corrupts absolutely. What happens when the state fully realizes its monopoly on violence and economy (currency)? Kelton's view works as long as we always and forever have benevolent and responsible government leadership.
Lakewood we have to do our part. In the US "we the people" need to get involved & stay involved - & basically live up to that.
Definitely a valid concern. The first step would be eliminating outside money in our political system and publicly funding all elections. Citizen watch dog organizations would need to be created in every state, maintain accountability. Humans are corruptable, so we need to reduce the capacity for corruption and punish those proven to be corrupt. It is hard work, but that doesn't mean it is impossible.
Rabble Repository Interestingly, life expectancy from the late Neolithic to early classical era was lower than in the dark ages. They get a bad rep I think.
The powers that be already understand what MMT tells us. They know deficits don't matter and have used that knowledge to fund the military industrial complex for decades. In other words, this thing you're afraid of has already happened. Now it's time for us to use the knowledge to focus on the general public instead, and to fund things we need such as healthcare, education and a jobs program.
Kelton's view is the way modern economies function. The current structure of distribution benefits few. There is no reason to continue toward this path toward feudalism.
Great but she doesn’t lay out plan how she going to make wall st pay 💰 up
Aye they have the burden
Her MMT theory is very popular in Japan.
Supporters are spreading rapidly.
But her theory is bs
They have been following MMT for decades. Japan has a national debt of over 260% and they are suffering massive deflation.
This deflation is mainly due to their aging population which means consumption decreases year on year which means companies are constantly lowering prices to not get stuck with excess inventory.
However the fact that a population that is aging at a relatively moderate pace can cause deflation in a country with a national debt that's 260% of it's GDP shows that the inflationary effects of a high debt, if it exists at all is very weak.
@@lightnow1 I don't think it is. Japan has a debt to GDP ratio of 260% yet their economy is not suffering from inflation at all, rather it's suffering from deflation because of their aging population.
I’m gonna watch this but there’s no way this many people can actually believe MMT is a good idea. This is insane & incredibly stupid….
It appeals to intellectually challenged people who can't deal with more than simplistic financial ideas and people with a warped agenda of gaining political power.
She glosses over interest payments . Who is that really happening , certainly not middle and lower classes ... a lot is held by foreign governments...
How much longer does prof Kelton think usd will be world’s reserve currency ?
@@dazedandconfusd Does she even care?
Indeed and that inriches rich capitalists and foreign governments which is not a good thing.
It doesn't affect the US spending power though. But it is a bad thing because it increases inequality en enriching other countries could make them into eventual rivals like what happened with China.
@@januarysson5633 Do you care?
I mean at this point it feels like the people are being sacrificed for the sake of maintaining US power for as long as possible. I would gladly speed up the collapse of the US empire by a decade or so if it meant free healthcare.
Brilliant! I think I will start a business. Imagine an UTOPIA where a business is guaranteed to succeed and one's job is guaranteed. Does anybody know what happened to Roman Empire?
Love your comment. Can't believe the number of people who believe this fantasy economics, you only have to read a little history to know how it all ends. Stephanie confuses "money" with credit. She conveniently steps over the Gold at 6 mins 15 seconds without a second thought. You can't fix an excess credit issue by issuing more credit (public or private). Insane policy which will just expedite the devaluation of government currencies.
Interesting, but on a long-term time frame (say 50 years)I would be concerned about interest payments on US Treasuries would be such a large part of the budget and GDP that it would cause massive inflation. Or would we have treasury just make some trillion dollar coin and pay off the "debt" to a reasonable amount concerning UST interest payments.
Justin, why are interest rates what they are? They start with the discount rate, uh? The fed sets that. Interest is more than you want? Cut the rate. If you pay a lot of interest, and don't tax it out, there is a glut of money for loans, and interest rates go down. If you do cause inflation, because you want to, that pays off the debt itself. Ya gots to listen to the girl here.
Run away inflation is rare and correlates to socio/political/environmental disasters. Japan's tried to create inflation for two decades. They've yet to achieve thus. Deflation is far more common and just as deadly. And if inflation is such a problem then consider taxing.
One unexpected effect is actually that the Euro helped protect the European welfare state. Because the countries are revenue constrained they had to keep taxation up even if corporations didn't like it and they had to keep the disposable income of their people up. They could let purchasing power collapse like in the US cause it would hurt their spending power too.
There is NOT Exclusive right of government to issue money ! The government in the USA does Not "issue" money nor does it create money.
Most money in the world today is fait credit money created by private banks. Private banks create more new money that any government and dop that when they lend by crediting accounts of borrowers. Government gets new money from reserve banks who create it digitally and pay the government for Treasury securities (bonds) which the government's Treasury department creates. Those borrowings have to be paid back when the treasury securities (bonds) mature. All of them mature in time just like Treasury bonds sold to the public and foreign entities mature. The money is paid back just like a private mortgage is paid back. In the case of Treasury bonds sold to the Reserve bank or others the taxpayer is forced via taxes to pay the money back on maturity of the treasury securities (bonds) when they mature.
MMT is just the bargaining phase of a grievously dying economy. It's the kubler-ross model of the five stages concreted towards the mountainous level of debt. That can no longer be paid back in full. Ever.
Exports are a cost??? As usual, monetarists have no idea what they are talking about...
8:16 "We begin with a flawed premise" - true but that premise is that the government knows what it citizenry wants better than the citizenry knows itself. To justify this premise it then says, not that the citizenry 'wants' something but that it 'needs' that thing.
14:19 Kelton's graph shows us that as capitalist economies & politics move more to the left, the recessions get worse?
(Do we have a Godwin's law for Trump yet?) 17:36 Kelton is asking us to believe that if we export more there will be nothing for us to consume. But if we export more, don't we have cash flooding in and can't we use that cash to...
19:02 Kelton smuggles in equity and at 21:00 goes full Marx and explains that only the ends are important.
22:22 Thatcher - with some words of wisdom
33:43 The Euro was noticeable by its absence and it is no small omission. Thatcher refused to accept the Euro and nobody says that it was a bad idea, nobody.
49:17 “Taxes help redistribute wealth, to take income away from people if you think they have too much”
56:00 If you don’t have a job then the government will hire you to dig roads _in direct competition_ with private enterprise who can and do go bust the the government cannot go bust - oh dear. The government becomes a doctor, road digger, bricklayer, car mechanic, …
I have yet to watch the thing but Thatcher had it completely backwards about the taxpayer money, lol. That's literally the opposite of reality. (I can explain why if you don't get it, or link to another vid.)
The job guarantee is dystopian, agreed. And not joining the euro was a good idea, yes.
(You seem to be pretty conservative. What's your interest in this?)
@ Sure. (Though I assume Kelton would have tried to explain this? Will watch it later.)
Actually let me link to a PDF (being lazy): moslereconomics.com/wp-content/graphs/2009/07/natural-rate-is-zero.PDF
The section titled "State-Issued Currency" in that paper is very readable, even to a layperson. The cliff notes are that while the government creates the currency and spends it into existence, the currency is only given value, at inception and then later stabilized, by the fact that people have to pay their taxes in this currency; taxes are a "pump priming" mechanism and are not actually needed by the government for their own spending... the government owns the printing press! The government *destroys* your taxes, and prints its own dough. (But taxes are always needed to "make room" for government spending, in particular, to avoid inflation.)
In other words: Private individuals own government-issued money, but the government does not hold onto taxpayer money, it destroys it. (So Thatcher literally had it backwards: "taxpayer money" is synonym for "defunct shredded money no longer in existence".)
These pop-science videos attempt to explain the same thing:
ruclips.net/video/fg0R9Ye2ovM/видео.html (low production value)
ruclips.net/video/IHxloLkMXeU/видео.html (high production value)
@@carjaune6793 Oh that old chestnut. No. I don't agree. Money was created in a multitude of places to get around the problem of the double coincidence of wants. It wasn't created by a contemporary Boris Johnson overlord in his infinite wisdom thinking "Ah a few pennies would be a good idea". What about cigarettes in prisons - did the state invent those too?
In any case the whole issue is a red herring used by the MMT advocates to take our eye off the ball. Who cares which came first? It doesn't matter. Nor did it matter to Thatcher. And yes Kelton did discuss it of course because she has nothing useful to say.
@ Just as long as you realize your taxes are gathered in a pile and burnt by the govt, and that the govt has a printing press in the corner for their own spending, I'm happy :)
I'm half-way through the lecture now. I don't think Kelton has the best policy prescriptions, but I do think it's very important for politicians to move away from loaded language of "debt" and "deficits" that they use to scare people away anytime it's time to spend money on something else than war or the bailing out of a financial institution. The limit on spending is inflation, not what we can or cannot extract from the taxpayer, and the political debate still hasn't caught up to that economic reality, which is damaging.
@ Inflation is a continuous thing. By the time you're causing it (beyond whatever target rate you've set for yourself) you're already fucking up. An MMTer won't say "spend, spend, cause inflation whatever, then tax it back!" because the "cause inflation" part is real damage to people and the economy. An MMTer will say "think about the amount of spending you can do without causing inflation". By contrast, a "classical" economist (or milquetoast conservative politician) will say "think about the amount of spending you can do without causing a deficit" which is actually pretty idiotic once you realize that the sum total of currency in your system (say, British pounds in this case) is simply equal to the sum total of all past deficits.
Looking forward to your next cantankerous reply :)
I get it.
Now convincing/educating 600+ MP's
People who can't see through the almost infantile shallow statistical representations that are in this presentation and it's major faults needs to go back to square one and learn basic financial management and how to synthesise basic financial concepts to better their thinking.
@@lepidoptera9337 Her "data" is flawed like her conclusions are most of MMT 's theory..
You need to lean more and apply financial concepts to financial matters which w shows that MMT is fantasy.
The reality is you cannot just pretend government does not have to abide by financial concepts and that it is the creator of new money because it is simply Not the case.
The reality is US government deficits are funded funded by either the government borrowing newly created money from the US Federal Reserve (or other reserve banks in other countries) OR borrowing by selling Treasury securities to the public and overseas entities. All of that money is borrowed and has to be paid back via taxes. All of the borrowed money from many years ago (over 30 years maximum) has been paid back.
That is clearly explained in the documents provided by the reserve banks of countries such as the Bank of Canada and Bank of England.
They are the actual creators of the money and explain it properly.
The reference for this is bank of England site:- - www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-econom
Bank of Canada site:- lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/201551E#:~:text=Money%20is%20created%20in%20the,new%20loans%2C%20such%20as%20mortgages.
@@lepidoptera9337 Where is your explanation and where are your facts. Why would you believe something that is outlandish that you cannot find any independent facts to support it OR it relies on someone ignoring historical facts? You think I have some religious belief when you are the one with blind faith that you can't face historical facts and can't explain how bonds are paid for and are willing to believe one cult.
@@lepidoptera9337 Where are the facts you talk about.
The independent facts. I am calling you out on this so I suggest you either present facts or admit you are wrong and have followed like a sheep what Kelton has said and don't have the courage to admit it.
So far your reply just means you have none or you would have provided them.
Otherwise you are just someone who is not so intellectually bright as to be able to determine when you have been duped and are talking B. S. like MMT does.
The solution for Europe is to form a United States of Europe.
For Europe it means the EU will have to step up and start acting like a government in it's own right.
Billions floating off into vacuum
啊，我暗恋安其 ;)
The sword of truth that Wall Street will not accept!
Hey, Stephanie
Are you going to be a part of Bernie’s economic team for the 2020 presidential run???
yes she is!
All sounds a bit theoretical to me. Has any country implemented this idea? I would not be surprised if the outcome is different to what they expect. Still, perhaps it's worth trying on a scale big enough that you can measure the result and small enough that you don't cause a catastrophic market failure. My one problem with it is that the more money you "print", the more tax you will need to control the resulting inflation. Isn't this in effect still finding the money, even if you don't have to find all of it?
governments don't have to tax to prevent inflation unless they try to spend money on something that isn't there. If a federal program only hires and pays unemployed people, for example, then it's not doing the thing that causes inflation, which is increasing the total amount of money offered for a resource that is currently being used. The resource in this situation is workers that do stuff, but that resource is not used up until you run out of unemployed people that can contribute to doing more and more stuff. The flexibility that is added to fiscal policy by thinking in terms of MMT is not infinite, it just reassures us that it is indeed okay to take advantage of all of the real physical stuff that is available to us before we have to worry about inflation-even if that means spending more than you tax.
@@Paul_K_ Thanks. I think I'm mostly stuck on the old "If it sounds too good to be true, it usually is" scepticism.
Excellent question! China is doing it right now. Europe did it after WWII and the USA during the Depression, just to name a few recent examples....
The US did it in WW2 and the Soviet-Union pretty much ran on it exclusively.
But I think the main thing to take away is that it's not about how much you spend but what you spend it on. The government can create value just like corporations can. If you want to secure oil you can just nationalize the oil companies. There is no fiscal restraint in doing so. The real restraint is the level of corruption in government. The US can't nationalize it's oil because far too many of it's politicians are in the pockets of the oil companies.
THIS IS GARBAGE
People buy a house, or car, or they borrow to maintain their businesses, or they use it for education, or they use a credit card. Look closely at a mortgage contract for example, aka promissory note. In this mortgage contract you signed in promising to pay back some alleged money with interest. But other than "VALUE RECEIVED" do you see the bank promising you anything? In your mind you correlate the "VALUE RECEIVED" with the money you actually get. You think that the bank actually took some money from deposits or excess reserves, or investors. But the bank never did such a thing. What they really did was to convert the promissory note, which is said to be a negotiable instrument, and deposited it in a special TRANSACTION ACCOUNT. This account had 0 money in it until it deposited the promissory note. As the money is paid the promissory note is worth less and less until it is completely paid and the account zeros out. If, for example, you borrowed 100.000 dollars for 30 years at 6% you will pay 116,000 dollars in interest. The bank keeps the interest paid but it does not keep the principal 100,000 dollars. This 116,000 dollars is extracted from the economy. The bank never provided any consideration. With so much money extracted from the economy, they bankers were able to monopolized ALL multinational corporations. This is concentrated power that no politician can ever counter. This is why media is basically what these financials want the working people to hear. These promissory notes are the core of the problem. This is why America is captured.
Yep - MMT is absolute garbage and contains so many contradictions within itself that any person with an ounce of financial understanding could see. .
Great theory! You’re preaching to the wrong audience.
Have you told this to the government?
By the way the billionaires still bay zero tax.
4:50 might as well start chronologically. Britain couldn't afford aircraft carriers for a long time, which is why it sold the 2 old ones to India. It also felt it couldn't afford the EU plan for a military so Britain pulled out of EU and Vwa-lah, it can afford carriers again. Meanwhile the NHS steadily loses ground to other medical systems (the UK has the worst cancer survival rates in Europe). Clearly, money IS an object.
@@lepidoptera9337 Every medical system is an "can you afford it" system. Imagine when there were no doctors, NO ONE could afford medicine. It was guess work. Getting copies of Galen was VERY expensive. 7 Billlion humans all have better chances now than T Roosevelts son did 100 years ago.
It depends on what the resources are that you're willing to mobilize. The UK isn't a global superpower like the US is. The resources at it's control are very much constrained and resources used in one area can't be used in another. The NHS though has more to do with deliberate policy choices by corrupt politicians who want to discredit it and eventually privitize it.
One thing about deficit spending though is that it keeps profiteering at bay and of course the rich Brits don't like this. They want to take the money for the NHS for themselves.
@@MrMarinus18 "profitering at bay". You think a government contract where no care for over budget spending is given isn't PROFITERING? Why don't you take a look at Nestle, a european food conglomerate, that took hundreds of millions of tax payer funds in Foreign Aid packages. Finally it purchased Carnation, it's American equivalent, also a receiver of hundreds of millions of taxpayer dollars. So American taxpayers payed for a monopoly bouyed by European taxpayers.
Klelton at 1.19.40 - explaining what she is 'worried' about. _She says " The wealthy are going to invest".
OH DEAR! You wouldn't want anyone to invest at all would you! That would be terrible. ( I think not.)
- Such an idea straight from the mouth of an MMT pusher that is a summary of the stupidity of MMT thinking. Nobody should invest since that would be terrible unless it was the government 'investing' which they support.
Rob, in that particular segment Stephanie is addressing one of her worries about the program called universal basic income (UBI) which is that, it could exacerbate wealth and income inequality.
It is not that, as you erroneously suggest, she is against investing. She is pointing out that because the already wealthy will also be recipients of UBI, they will not necessarily use that money to buy everyday stuff like what the poor and the middle class most likely would but use it to augment their investments and thus increase their wealth even more.
Please pay more attention to what she's actually saying instead of mischaracterizing it in a very limited way. Thank you.
Lovell CN - Anyone apart from a fool can understand that a printing press cannot make wealth.
Also anyone who understands any language should realise you cannot take some of the phrase that Greenspan or anyone else says and ignore the context or in this case ignore the whole phrase which she has done. His context explicitly states that the real resources are the question not the money. She has quoted part of his explanation. That distorts what he said just as excluding a punctuation mark can alter the whole meaning of a sentence.
Rob, we have a monetary and economic system that measures wealth in dollars. Do you have a problem with that?
Lovell CN . There is a problem with measuring things in dollars if that same unit of measurement depreciates to such an extent that there is more chaos created such as an attempt by the creators of the unit of currency (dollars or what ever) to pay for things by creating more currency instead of paying for things by creating wealth first. That is why there is a restriction on just anyone creating more dollars to which the term counterfeit applies. In reality it may be justifiably argued equally that counterfeit money creates just as much wealth as government creating more currency. Yet despite this fact MMT never argues for any other organisation apart from a centralist government to be allowed to participate in creating more dollars to fund spending. If you are a genuinely inquisitive and unbiased person without preconceived agenda you would have to ask yourself why that is so if it is a good way from any level of government or any organisation or person to fund their spending. It isa question which no MMT economist has answered apart from invoking a non economic answer like "it's against the law" which is just an utterly stupid argument which if applied unilaterally, which is the test of validity of any such law, would not allow any changes to existing laws.
Rabble Repository - Your logic seems to be Bla Bla Bla. Nothing to do with addressing government excesses. Or are you arguing for a continuation of debt by politicians who play politics before anything like a balanced view of finance or most other things. You seem to be arguing that politicians do no wrong if they over spend and can't restrain themselves and not your Common Man. Would you argue a highway can only be created by a government? Quite ridiculous. Are you arguing that all the private roads that companies create like access highways to oil or other resources don't exist or are that you don't benefit from them? What about the internet highway that government held in cotton wool and highly restricted until the private sector expanded it for everyone in the world to access or doesn't your imagination go that far? Or don't you use the internet ?? Oh dear ! - you are using it Now !!!
What's with all these Jews pushing MMT!?
Yay, just print more money.
Ah no. Didn't listen to the lecture did you.
And invest it into productive purposes, the way it has been done in the past.
This is another terrible idea from the Keynesian economics playbook. There are dire consequences of using this model. This model is based on the US economy's ability to satisfy its needs. All you need do is look at 20 years of the trade deficit to know this assumption is a failure. Secondly, Stephanie needs the US dollar to remain as the reserve currency. Right now, 85% of transactions are in USD. However, this has been eroding and will continue to decline. When other countries see the reckless printing of fiat currency, they will be less likely to commit to USD and will negotiate for their home currency. Thirdly, we have been in a period of high employment, and therefore, there is no spare capacity, evidenced by the high inflation rate. To prevent hyperinflation, the government must shut down many programs for an extended duration. We know that will never happen. Lastly and most importantly, Stephanie thinks that government bureaucrats can make efficient investment decisions. They have never and will never be able to surpass the hundreds of millions of economic decisions by companies and people in a capitalistic economy. The decision-makers are corrupt individuals ignorant of science and technology. Government mistakes end up damaging society because their decisions are political versus rational, reasoned, and based on objective truths.
I think the theory is only valid in as much as it is an academic thinking. When it comes to politic, the theory breaks down. If the Republican has the majority, they want to spend on the military spending and cut taxes, and if the Democrat rules, they want the free education and expanded wellfare programs. There will be explosion of deficit spending and creating very minimum public goods.
@@TheGodiscool Yeah, very true and especially since they like to destroy each other's projects. If you print money to start something, then break it down, then print more to build it back then break it down and going back and forth you are going to get massive inflation. Cause you're adding huge amounts of money to the money supply without any real changes to the economy.
She's a honey desperately concerned body on the line so too speak
Bernie Sanders used to talk about going after “millionaires and billionaires” until he became a millionaire. Now he just talks about going after “billionaires”.
She is brilliant
Yeah Sure! - When the household or business gets downgraded by Moody's or S and P your borrowing ability is made more difficult.
It may be news to Kelton but economics and finance does Not stop at the border of a country and the same drivers of the economy that apply to households apply to all countries.
BUT what Kleton with her introverted understanding omits is that when a country's credit score which is posted by Moody's or S and P gets downgraded the whole of economy suffers and every household in it because the whole economy finds their interest rate on borrowing from overseas either rises or becomes virtually impossible which pushes up prices of imports and adversely affects the exchange rate. So everyone suffers via the same mechanism..
How absurd to say "Exports are cost" which Kelton has said and put down as a real cost.
She says "exports are cost" then says "when you are producing for export the other countries get to enjoy the benefit of consuming the stuff that your people produce."
What ?? Exports cost ? How could anyone be so financially inept and her understanding so stupidly poor that she cannot put two an two together.
It totally ignores the fact that you can only get the benefits of imports with your own exports of some kind.
She ignores the fact that exporting allows China to import raw materials it needs and cannot source from it's own county because they are too costly. That does not gell with her absurd statement of exports being a cost.
That’s not deep enough. She simply is too simple.
It's not her fault, MMT as a whole makes no sense. They spend all their time on creating fancy equations and assumptions that have no basis in reality. The only reason it gets any traction is because it tells people in Government exactly what they want to hear: "Here, you should have the power of the economy.".
The national debt is NOT an asset of the private sector. It has to be paid back because it is a loan from the Fedreal Reserve and others. The Federal Reserve holds the bonds and notes that Treasury created and sold to the Fed to get newly created money. Other bonds were sold to the public and have to be paid back on maturity.
Is anyone really that financially ignorant to believe that the financial asset that the government spent is an asset of the private sector when it is a debt they have to pay?
They have to be paid back in dollars which there is an infinite supply of.
What you are saying is correct but you're missing the part in WHAT they have to be paid in. The reason they are called "debts" is because it's a holdover from the gold standard. When US dollars were backed in gold calling treasury bonds "debt" made sense cause the US government would have to find the gold to print more dollars.
However since abandoning the gold standard this is no longer the case.
Government spending is private asset because the private sector has more money than it did before. That part is not that difficult. Without the gold standard though it's important to keep in mind that the value of the dollar is build on faith. People desire dollars because they have faith in the strength of the US government, if the US government were to collapse then the value of the bonds would as well. We saw this playing out in real time recently in the UK where during a speech by Lys Truss the value of the pound dropped dramatically because people didn't like what they were hearing during it.
@@MrMarinus18 You are clearly wrong when you say there is an infinite supply of dollars. If there is an infinite supply of anything then the price has to be zero. If there was an infinite supply of any money then everyone would have access to that money without doing any work at all. They don't so it is not an infinite supply.
Government does Not have an infinite supply of money because it has to be created alongside a debt obligation by either the reserve bank or the private banks or the reserve bank. There is no holdover from the gold standard.
It such simple concept to learn so why do you not understand that ?
Go and read what the explanations of the banks who create money actually say instead of some MMT economist who can't do the mathematics and puts across story that is contray to historical fact which they cannot even address when it is put to them.
You say "if the US government were to collapse then the bonds would as well". NO. - wrong again !. What would happen is they could be paid out with worthless money created by huge government budget deficits. The bonds could be fully paid with those worthless dollars. Just like an expansion of what you are seeing today and going to see tomorrow. -Lower purchasing power of the face value of existing bonds because the money has been inflated and every dollar buys less.
Your response is indication that you are so confused about even simple financial concepts that you need to go back to square one and learn them first.
@@Rob-fx2dw Because you say it has to pay it back but pay it back in what?
The US debt is in dollars and there is no law that says how many dollars the government can put in the economy.
" If there was an infinite supply of any money then everyone would have access to that money without doing any work at all."
That is why the government can't spend infinite money. It needs to keep up it's currency and needs to keep the economy going. However this is not due to some finite limit but how much government spending the economy can actually support. There is no limit to government spending on paper but there is a limit to the actual capacity of the country.
And the idea that nobody will have to work doesn't make sense. Things still need to get done. If the government were to spend too much money too quickly and exceed the capacity of the real economy then you would get rapid inflation.
You often talk about the "debt obligation" but that's a concept from the gold standard. The government used to indeed have a debt obligation which was in gold. But that no longer exists.
You are talking about "lower purchasing power" but I'm curious what that means. I'm guessing it means the number on the dollar that gets you a similar thing. But numbers don't matter, it's purchasing power that does. If everything remains equal then inflation doesn't matter.
Inflation in the US matters because of wage suppression. If you feel like the numbers are too high maybe the US government can just cut off a few zero's though that wouldn't do much other than make some people feel better.
But also if the government collapses no more money would be deposited because the institutions that's supposed to do that no longer exists.
@@Rob-fx2dw I am confused cause you say the US government needs to pay obligations. But not in what they need to pay those obligations.
This used to be gold but you already stated you know this is no longer the case. But if not gold and not dollars then what?
I mean I don't recall governments being forced to privitize industries. I know of governments doing it but they never even claimed it was due to debt obligations but because they believed the private sector would run them better.
@@Rob-fx2dw Kelton is not claiming the government has no limit to it's spending behavior just to it's budget.
There are real limits to how much it can spend in a given amount of time which is different for each country depending on their economy.
If you were to go full communist the total amount of money the US government can spend in one year is equal to it's GDP.
But of course doing that would create all sorts of chaos cause a lot of the economy is operating by private actors who would all of a sudden need to shift.
And it also is limited in maintaining a balance between work and consumption. If it were to give out too much welfare too quickly it could cause inflation and a lack of work, especially if it doesn't enforce stricter labor standards. If you spend more money on welfare you do have to make sure labor conditions and wages improve so that work remains worthwhile.
There are all kinds of limits on the government's spending power. It just isn't some arbitrary number on paper but it's rooted in the actual economy that exists in the real world.
This is why we need cryptocurrency, so people like this can't meddle and ruin the value of the currency.
You can't pay your taxes in crypto. So it has no value, other than as a speculative asset. It's not a real currency.
@@benharris3285 it works much better as you eliminate central banks. The same value in every country.
@@benharris3285 you can same the same things about gift vouchers. Central banks are history 5 year fiat currency will be gone for good.
Problem is though without a government to back it a crypto currency can collapse at any time.
Theres nothing "new" in this "theory". As you acknowledge, it's what happens already. What you seem to be arguing is that it should be done in a more egalitarian manner. This isn't new either.
To believe that monopoly capitalism will save you is quite a leap of imagination.
Human freedom probably peaked between the Roman slave era and the 16th century
Yes that's right , the Middle Ages.
Better to be a peasant rather then a wage slave.
MMT is the formalisation of that serfdom given its inflationary / full employment war / consumer war economy / society
Your ignorance is astonishing. MMT is not inflationary. try actually doing some reading and thinking before spewing nonsense.
Joe Smith
MMT assumes you must push the system to maximum capacity so as to satisfy demand .
It's inflationary
It's a war economy or consumer war economy
Lol...it's not a war economy, if anything, it's a post-war economy. Besides, war economies are not inflationary. Try reading some history.
Joe Smith
Jaysus
Read some social credit
It seeks to create a dynamic stability between prices and net income. ( Income - depreciation)
Yee guys push the system creating a desperate flux and pointless stress.
MMTers are the ultimate monopoly capitalists.
Turning people into suburban serfs.
Dork Cork - You are right on the money there. Serfdom from MMT' centralist monopoly run by a national socialist style upper class that pretends to want to create and share wealth but is all just about power over others.
The people who think that a country can just borrow in it's own currency and it not have the same sorts of consequences as borrowing is their own currency are those who are in denial of or ignorant of the significance of the rate of exchange and it's message about the internal and external value of their own country's money.
It shows in the statements of MMt economists who make comments that show their ignorance of the basics of the subject.
If the US expanded it's own currency by 20% to pay debt it has created then there would be about 20% negative impact on the rate of exchange as well as the internal purchasing power of the dollar . It would be a case of 20% more dollars without 20% more goods and service so internal prices would rise to match.
Nothing is clearer to anyone who understands the basic operations of R of E theory and practice across multiple nations currencies which is and easy subject to learn if you have had any experience in dealing with aspects of it and an open mind capable of learning.
Why would there not be 20% more goods and services? You think the government just gives money away without asking something for it?
@@MrMarinus18 the government does give money to people as social services.
They also give the public's money away based on politcal matters like the politicians getting elected in particular electorate that is not based of any scientific or a good business practice. To deny that you would have to have had your head in the sand.