@@aaronfreeman5264 Unless the buyer buys the house outright the buyer has a mortgage. A mortgage is a liability for the buyer not an asset. However the mortgage ( in the form of mortgage payments ) does become an asset to the bank that has lent the money. but, Even if the buyer buys outright the house only becomes an asset after the bank that foreclosed on the original mortgage has sold its “asset” to the buyer.
I only had $0.0000008 in an account, but I had a talk with the branch manager, turned the statement upside down, and she agreed and fixed the computer, I'm a multimillionaire now. It's all about communication skills.
@@thedave7760 Assuming you mean who owns how many dollars to whom, the first question has to be how did these dollars come in to existence in the first place? How can a dollar come into existence without somebody owing somebody something? That has to be fully understood before this topic can be rationally discussed.
It’s actually not necessarily bad for laborers. A devalued dollar means labor can be more competitive at home in the USA. We’ll see a lot of factories spring up at home rather than manufacture everything overseas.
@@willnitschke If there was Person A who started out as a scammer, then it is fair to scam him. In this case, people who supported Taxation prior to learning its MMT role.
it used to be working coz china and japan were buying up all the excess bond. create a cheap cost of borrowing and avoiding high inflation. but now no foreign country buying up the excess bond, hence it will cost inflation.
This is 100% correct! Even worse these people believe in Keynesian economics but they only follow the part about deficit spending during a recession. They will never stop spending so we will never have a baseline on the economy to know if we should be running deficits or surpluses.
@@Richest_Person_in_the_World No, a fiscal surplus can be used to pay down the national debt. But you are correct if we didn't have 35 trillion in debt.
@@Richest_Person_in_the_World What you say is undoubtedly true and bad for you, but this is supposed to be from the government's POV. Whoa - that rhymed!
1. To create demand for that currency 2. Tax can be used to control inflation 3. Tax can be used to create more equality 4. To exercise nation-state power, monopoly of violence and taxation (death & taxes) PS. I'm not MMT supporter!
@@pnc1358 Tax cannot be used to control inflation. This MMT brain fart is among the dumbest offered by the ideology. If poor people are struggling to pay rent or buy food, you can't just raise taxes on them so they become homeless and starve to death. Technically, that will 'fix' the inflation problem, sure. By creating a lot of dead people. Or you could raise taxes on Corporations instead, which will be passed through to consumers (as all operating costs must be), and this will cause even worse inflation.
Listening to her speak is like listening to a teenager talk about credit cards. "Yeah, you just use the piece of plastic and it pays for whatever you want! its free money!"
@@Richest_Person_in_the_World What do you think happens when we run a deficit? We raise the national debt. If we default on that debt, it can be catastrophic to the entire country.
@@novacorponlinewe don't default on the debt, we print more money, which can or cannot cause inflation depending on where the money goes and what is available and needed in the economy
The Richest Person In The World is right; don't insult teenagers, by comparing them to Kelton. At least a teenager will bear the cost of their debts themselves, or maybe with their parents' help. The government makes 7 billion innocent 3rd parties pay for their handouts to weapons manufacturers and government contractors and bankers.
@@novacorponline If the government loads my account with $1,000,000 yes that is public debt now, but it's my asset as a citizen. Therefore you should rejoice at the realization that the deficit clock is your savings clock
I knew that lady was nuts when she used that "6 or 9" analogy. Someone drew that 6 or 9, so someone knows which one it is, therefore there is an objective right and wrong answer. Subjective morality is poison to ethics. Didn't know subjective economy was a thing.
@@theGefilteFist "Subjective: characteristic of or belonging to reality as perceived rather than as independent of mind". Price is subjective. Value is not. The circumstances in which an item is presented determine if it has value or not. Gold has objectively no value, outside of computer chipping and electronics. Its price is based entirely on subjective assumption rather than objective utility like steel or gasoline.
@@1krani price is literally printed on the price tag (where applicable). Everyone has to decide for themselves if the value they get out of something is worth the price cuz the value only exists in their heads
@@vulgoalias4050 For morality to be subjective, one would have to believe that certain ideas or actions are not inherently hypocritical or self-destructive. Rape springs to mind.
You think you're calling their bluff, but MMTers, Thomas Pikkety and others have said that taxes should be understood as a social engineering tool rather than a finance tool. The point of taxes is to punish you for behaviors the regime doesn't like, and to control the flow of resources so that wealth is distributed according to what the regime thinks people deserve instead of according to what they earn through voluntary exchange.
Obviously to tax production, so it doesn't become "overproduction". You have noticed that all taxes, except for VAT, are on resources for production, haven't you? Once upon a time it would have been enough to tax gold mining 🙂
@@larsnystrom6698 *Obviously to tax production, so it doesn't become "overproduction".* The only thing obvious in that statement is that your brain doesn't work.
@@coolbanana165 Then it's a description, not a theory. Theories should allow for prediction, and description just says how things are, and not how they will be or should be. Not that description aren't useful, but they're useful in a different way than theories.
Any system can work if you have vast amounts of oil wealth. Saudi Arabia is a dictatorship or a kingdom depending on your perspective and they have a pretty good quality of life.
4 месяца назад+5
@@danparish1344 Depending on your class. Outsiders don't find it so good.
97% of our currency is created by commercial banks. When a bank issues a loan, it creates new money digitally and charges interest on it. For a 30-year mortgage, you’d work about 15 years to pay off the interest alone, all for money created with a few keystrokes. Let that reality sink in, and you’ll begin to understand the flaws in our financial system.
First, don't tell the MMT crowd that private commercial banks create most of the currency, as they all think 100% of it is created by their all powerful government. 😉 Secondly, what is the alternative to loaning money? Nobody is going to give you their savings for free. People aren't stupid. Are we supposed to rent for 60 years and buy our home for cash at age 70?
@@charlesloucks1840 The people who 'benefit' from MMT are the wealthy. The people who are screwed by it the most, what I call the "useful idiots of MMT" are the bottom tiers.
Re: "For a 30-year mortgage, you’d work about 15 years to pay off the interest alone" Its what moderates consumption and forces people to work. Society couldn't exist if nobody worked and the pay rates vs interest rates vs desire to succeed all go towards a successful society. Imagine if money was simply given to everyone instead of being difficult to accumulate. Where is the incentive to produce that food and build those homes? This woman is absolutely clueless as far as human behaviour goes. But then again perhaps she's playing devil's advocate very successfully. Sadly I suspect its the former.
An important point for anyone to understand is that money itself is not wealth; it's merely a tool, a medium of exchange for goods and services. A good currency, like gold or silver, will also have other properties and can be a store of wealth, but ultimately, it's the exchange function that's the most important. Wealth is actual goods, services, and resources utilized for goods and services. It should be obvious that merely printing more money not only doesn't create new wealth in the form of goods and services, it dilutes the rest of the currency in circulation, devaluing the currency and causing price inflation. Borrowing money is trickier, especially when the government's doing it. Still, like any borrower, the government either has to pay it back or default on the loan. They often get a pass because it's the government borrowing the money, but they shouldn't. The money government borrows has to come from somewhere, and the question is where would the money have gone if government hadn't borrowed it? Either way, printing or borrowing, the government isn't "stimulating" the economy into creating more goods and services, it is merely redirecting the economy into whatever industries or sectors they think need 'stimulating'. The government can never run out of money, but the more that they borrow or print, the more bad consequences they create. That's why it's not "free" money! Stephanie Kelton is wrong to say that it would be inflationary for government to spend only during "full employment". How many concrete workers and architects does she think are unemployed? And government spending rarely targets specific groups of people in such a way. She's just expecting, or perhaps *hoping* that those unemployed people will become employed due to government spending. This is reckless thinking when you can't explain how it will happen.
MMT'ers will respond by noting the difference between the money supply and the money supply as measured against economic output. But, 1-2% inflation is still inflation, and the Federal Reserve understood this when their inflation target used to be 0%. Heck, Hanke says the target should still be 0%; it's a fair issue to debate. But even if there are some MMT'ers who want 0% inflation, they are still ignoring the counter-factual inflation which comes in the form of central banks preventing slight deflation----technological/growth deflation, which is OBVIOUSLY good deflation.
@@macsnafu and that is only credit deflation, particularly when wages fall more. But there's nothing bad in itself with falling prices, because a growing economy brings prices down, particularly in terms of our wages. That's capitalism
The problem with MMT is that they believe the relationship between inflation and employment is a step function. Everything else is main stream econ. Your post assumes people are rational, but they change their work and investment patterns based on feelings. The government can change people’s behavior (feelings) so they work more and make more stuff.
Mac Look up goldsilver money or Mike Maloney. He does have some good videos on money. There’s a reason and historical reason he always says gold or silver is money but the U.S. dollar today is fiat. Currency doesn’t preserve purchasing power. Money has like five key tenets that a good money must have and preserving purchase power is one of those. You’re right. If gold is found in mass quantities it’s inflationary. Now gold is a good or product in itself as it’s more rare. So even if it wasn’t money it’s worth something unless if you’re a Native American or some tribe using other things for barter. Some tribes used gold for barter but some used sea shells etc. and Polynesians on one island rowed 200 miles to another island to bring back a rock and that rock was considered money. So ya people should distinguish between money and currency.
This feels like your projecting your bias onto what people say. It is literally true that the US government, as the sovereign issuer of money, is able to create and spend money on whatever it wishes. But that’s not the whole story. Every MMT’er, Kelton included, caveats that with the limit being the inflationary pressure of that spending. Don’t let bias hold you back from steal manning the arguments of others.
@@timgwallisSo how do we just create all the money we need for free healthcare, college, etc etc and deal with the inflation? That’s the missing piece of the puzzle. Monetary systems can only handle so much inflationary growth at a time.
@@januarysson5633 totally agree with the last part of your statement. However I disagree that the “how to handle” part is missing. MMT’ers make it clear that the means to deal with inflation is taxation. Creating new money increases the money supply in circulation, taxation reduces the money supply in circulation. Personally I favor a progress consumption tax. The more you spend, the higher the tax rate you pay. With a digital dollar the rates could be programmatically set to ensure the money supply in circulation new grows faster than 2% annually.
January In the past miners of silver and gold brought metals to mints and the mints made coin money that would be given to the miner. ZERO NEW DEBT is made when mints would convert metal into coins. Today fiat currency has made the system so when a new mortgage is made new dollars are also made. That is a totally different system.
I’m 70 years old and retired. I’ve become more cynical and listening to things like MMT over the past years. The main reason the government doesn’t have to worry about where the money comes from. Is they can always take it. They have law enforcement and jails to put you in if you don’t give the government the money.
FFS, a 6 is not a 9 just because you look at it in the wrong orientation it's still a 6. The national debt requires servicing. This means selling bonds. Every bond sold is capital that did not go to into the private sector. This is so braindead.
Your problem is you lack the mental sophistication of a grifter such as Kelton. She's done very well out of MMT style policies, and so have many other wealthy elites, including me, I suppose. As for the working class, well that's been pretty ugly, sure.
Simple thing to remember, if you hear the terms "deficit", "print money", "borrow", "quantitative eas" these are the same things at government level, and it all leads to the same thing: inflation.
@@Richest_Person_in_the_World The price level is 30% higher than 3 years ago. Thanks for asking. If inflation is 50% for 1 year, then everyone is twice as poor. Even if the rate of change _then_ drops to zero, people are still twice as poor, knucklehead.
Under a fiat currency the point of the dollar (or euro etc) is to pay taxes. If the federal government said "We will no longer accept USD for paying taxes, from now on only Mexican Pasos will be accepted" people would stop usong the dollar very quickly, and move to the new currency that they cam use to pay thoer taxes and avoid punishment for failing to do so. MMT is saying its okay to spend more of these than you are accepting in a given year, because you are collecting enough to maintain a demand in the market for them.
@@neolithictransitrevolution427 No it isn't. That's just a retarded line of Molser scripture. 😅 The point of any currency (whether it's fiat or not is irrelevant) is to efficiently facilitate exchange. BTW, I can hold my entire net worth in Swiss Francs, and if I was a US citizen, and had some tax to pay, I'd just transfer my Swiss Francs using telegraphic transfer to pay the bill. This is all sooooooooo stupid. 😂
@@neolithictransitrevolution427 This is all so stupid. I can keep all my currency units in Swiss Franc's and if I'm obligated to pay US taxes, do a telegraphic transfer, in Franc's, to pay that. Everything MMT "says" is nonsensical, hence irrelevant. Demand for a currency is derived from the fact that dollar denominated debts are loaned and leveraged. There is always more leveraged debt than dollars. This is "OK" until there is an unwind and then a liquidity and/or collateral crisis follows. Printing more dollars does not fix anything, it makes everything worse.
MMT is so full of holes it's hard to believe it's still taken seriously, especially considering the inflation we've seen across the world since that TED talk was given.
Techincally its not inflation. It's a price shock, triggered by the ukrainian war and the loss of russian gas from the world economy. Inflation happens when the price of everything, including wages goes up in a spiral like in the 70s.
A corporation creates the value that money is a unit of, are you really this stupid? Our current monetary system literally turned US dollars into US stock shares minus the owner rights.
All of the interest paid on the National Debt does go to someone as Stephanie Kelton stated. This issue is it is govt. money paid that does not come back into the system in fair taxes or production. For the system to work that has to be the case.
That's just one major hole in her "logic". A lot of that debt is paid to foreigners, such as the Chinese. The bigger hole in her "logic" is she assumes all government debt balances to assets on the other side of the ledger. It doesn't. Entitlements are expenses, not assets.
@ Entitlements like Social Security don’t add to the National Debt. SS is still in the black so no debt. Incurred. Also, SS recipients spend it back into the system which ends up working for all. Basically put, the money stays at work and causes no debt. Interest paid to China on the other hand is production lost.
@orangeofmars2835 entitlements don't add to the national debt. 😅🤣😂 Consumption = production 😅🤣😍 We should all be on welfare bro. The more we consume the richer we are! 'Cause "the money's at work". The more I max out my credit card the wealthier i become. 🤣
This is the first time I've heard MMT described by a proponent as a matter of perspective treating deficit spending like double entry bookkeeping. And it's still stupid...
Well, the science of it is 100% accurate. The implications of using it is a different question. That's why you should never listen to economist who don't understand money and banking, including this clown economist.
@@Richest_Person_in_the_World Oh look, anonymous nitwit babbling shit on the intertubes pretends to be smarter than a guy who has written whole books on topics he doesn't remotely understand. 😂
@@Richest_Person_in_the_World Imagine an anonymous half wit on the intertubes who doesn't understand what debits and credits are, or who thinks Yugoslavia currently enjoys single digit inflation, who then goes on to cluelessly attack a PhD who has written whole books on topics he doesn't begin to grasp...
So, you never understood Double Entry bookkeeping? Obviously you never worked in accounting then. Here, I'll just give you a SIMPLE QUESTION THEN, nothing complicated at all: Let's assume you have $100 in your checking or savings account. Where EXACTLY did that money COME FROM? (with apologies if you have your own printing press)
She should’ve explained why the government cares so much about collecting my taxes if they can just print all the money needed for high speed rail, free housing, and foreign wars.
@@Richest_Person_in_the_World Bit didn’t those dollars I sent the IRS have value back when they were in my wallet? How does me giving them to the government give them value?
@@theybrokemywatchThe fact that They (dollars) are the thing which saves you from tax punishments. As in "Give us $100 or we'll jail you," you react: "Whew thank god I do have $100 here."
Creating more money is necessary when your real economy is growing. More cash is needed to complete the increased growth in transactions. But supporters of MMT mistakenly believe this relationship also works the other way around. That if you increase the amount of cash circulating, this automatically increases economic activity. In real life this doesn't work. What happens is that sellers of non-discretionary goods elevate their prices rather than creating more goods and services. There is no growth in real economic activity, just inflated prices.
With respect, i agree completely with the second statement you made, but i disagree with the first. Why must monetary expansion match real growth? Surely, deflation is THE point of an economy? Who cares if my salary is decreasing in the actual figure, if my purchasing power remains the same, because goods are becoming cheaper?
What you're describing in those sellers of non-discretionary goods are monopolies. Break up the monopolies and prices will start to come down as suppliers compete for business.
@@garethbarry3825 I agree with you, but I accept Milton’s approach of “at least don’t inflate the currency” instead of trying to argue Schiff’s position of allow it to deflate.
@@charlesloucks1840 Great idea, except private sector monopolies don't exist, only government ones. I can't shop around to get a driving license renewal for a better price.
@@jsbrads1 It's not clear to me that Schiff's position is wrong and you presented no arguments as to why he is wrong. Pragmatically, deflation is undesirable primarily because it would cause the government to collapse.
She talks about not being in full employment and that we have the capacity to rebuild the infrastructure. But, so what if we have unemployed people. Do they know how to use a hammer, or build a train track, or lay concrete?
Frankly speaking, in all likelihood yes, they can. Employment in Construction seems to vary most much more than average with recessions. Many recessions are primarily a result of a building collapse, 2007, Savings and Loans Crisis, the Great Depression, etc. But more to the point, you are correct that not every unemployment individual will end up working in construction. But I do support the concept of a Guaranteed Employment scheme. I would suggest keeping the federal government, which responds slowly and bluntly, largely out of the operation. Instead I would have a federally funded program wherein Municipal governments and Charities can pay people minimum wage for 8 hours a day 5 days a week. I would also open it up to Manufacturing companies to cover up to 6 months of training, although half the cost would have to be repaid if the trainee wasn't employed there a year later. Smaller and generally financially strained entities will react much more quickly and efficiently to the available labour pool. They aren't stealing jobs from the private sector because of the limits on hours available and wage. But it would keep employment up in a recession while getting things done.
or want to? full employment is only possible when you remove welfare (besides disability) i work in construction management in DC area which have a hiring law called First Source. we have to hire DC residents to fill our jobsites in DC that receive public money. the problem is many people would rather not work and live on public assistance, than sweat on jobsites and earn 20% more. welfare creates generational poverty and rob them of motivation to reach their potential. it is insidious and a tragedy
You really picked the toughest jobs to learn in your example, OP. As for the other comment about DC workers. I feel that's a oversimplifying things. If wages are so low that the difference between not doing anything and back breaking labor at a job site for 40+ hours a a week is 20% pay raise... thats not enough of a drive for people. Increase the pay for the job and people will do it. Oil field workers in texas live in remote areas and do work that will leave many with disability qualifying injuries because they can make 70k starting and 100k after like 3 years. Yes, people don't wont to work, but people will work for the right price. I dont think forcing the lowest wage possible on people is good. As, walmart is the largest welfare recipient since they don't pay their employees enough to live so welfare isn't just for the unemployed.
I had a discussion with some friends who seemed to want to champion MMT. What they failed to recognize is that inflation is the real killer of MMT, and you can't print your way out of it. The latest round of money printing by the government, where they increased the money supply to the tune of 30%, led to approximately 20% cumulative inflation from the time they started printing the money. Not good at all.
Hello. Have your friends learn Quantitative Monetary Theory. MV=PY. What MMT is stating is that instead of issuing Treasuries to be purchased by various investors, the Fed can just buy all of them instead of the fraction they do now. This would create an increase in the money supply multiple times over. Once they recognize that and understand the Quantitative Monetary Theory, they will get it. That is unless they like hyperinflation. Assuming friends aren't morons though. Lol
@@imrangul6750 MMT argues that the value of a Fiat currency is derived from the acceptance of the currency in payment of taxes. Consider how long you think the USD would last if the IRS switched to only accepting Pesos. Taxes drive demand for a Fiat currency. They are essential to it's function. The stance MMT takes is that because of this, it's okay to spend more USD in a given year than it collects in taxes, as people will save some for future tax payments or to buy things from someone who will have to pay taxes. And as the economy grows in size, ideally due to rapid growth but probably due to inflation, the amount expected to be collected in the future grows, and so more overspending can occur as more money will be saved.
@@scottcincinnatikid9804 No, what MMT is arguing is that when you increase M, you get a rise in P and/or Q. And that you should focus spending on sectors that raise Q. This is widely accepted in QMT, banks increase M1 and M2 by issuing loans, and the productivity of those loans increases Q enough to compensate. But I agree they can't just liquidate all outstanding debt. I would say selling government debt will always be an important anti inflationary tool, in the same way the Fed pays interest on reserve balances. I would like to see public banking with the Fed, so that people can get the same interest rate on savings as commerical banks do. Or likely, lower rates to take more money out of the economy.
She's dishonest. She was telling us that inflation is the worry, and when it got here in 2021/2022 she told us that inflation was transitory. That's an ad hoc excuse because she knows inflation means there should be no more handouts. Having the reserve currency isn't a difference in kind, it's just a difference in the amount of time the U.S. Government has. Guess what happens when you print too much? Well, then you don't have the reserve currency anymore! No duh
The next scary "logical" step is in the last bit of this video, where the TedX'er talks about resource allocation. If we are dispensing with the need to pay for things in a free and accountable market, then an all-powerful communist government that centrally directs employment and use of resources is not far behind.
That is the core assumption, correct. A philosopher-king/central planner, is vastly wiser than the millions of people making individual economic decisions, even though we always see the opposite in practice.
Bond holders, primarily. Foreign sovereigns, pension funds, individual investors, etc. If they don't honour their debts, the US economy would be destroyed over night. Hence why over 1 trillion is now being funneled into debt servicing, away from schools, hospitals, infrastructure, etc. Yeah, so the debt load is pretty devastating right now. (To consider how bad it is, the US Federal government only collects 4.5 trillion in taxes. In other words, about 25% of all tax dollars are sent elsewhere, instead of being used productively. And it's rapidly getting even worse.) Thanks for asking.
@@willnitschkeYou are so clueless lol Supposing 28T is owed to bondholders and another 28 is needed for hospitals. What's to stop Jerome Powell from just printing 56 trillion. So there is no Crowding Out as you claimed
@@Richest_Person_in_the_World *You are so clueless lol* No I'm not, you're the idiot in this exchange. *Supposing 28T is owed to bondholders and another 28 is needed for hospitals. What's to stop Jerome Powell from just printing 56 trillion.* Hyper inflation would result, assuming the 56 trillion was pumped into the economy, Professor Sh*t For Brains.
China already pushed back on accepting new US debt, German bonds pay interest lower than the rate of inflation. Interest rates rose on our debt and if we don’t get our spending under control, our government can collapse. Inflation can run out of control and the flow of the economy can break. Retirees won’t be able to pay for medicine, housing, food… Reality can foreclose the US.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless" -Thomas Jefferson
In the discussion of full employment, do economists ever take into account the mismatch between the job vacancies employers want filled and the pool of workers who are qualified to perform those jobs? The Army only needs a few tens of thousands of recruits annually. However, 71% of youth do not qualify for military service because of obesity, drugs, physical and mental health problems, misconduct, and aptitude. Given the casual effort of our public education systems, there are probably no categories of employment where corresponding labor resources are readily available.
@@macsnafu I mean in cuba they train doctors by the tens or hundreds of thousands but sure you can't do if if you want to keep doctors in short supply and medical cost so expensive that it is the leading cause of personal bankruptcy . Not a person in this comment section understand money or economics and that's how you get to the point where you claim not teaching and educating people who can't afford it will lead to a shortage of relevant skills and pretend that's not just a funny commentry on capitalist extraction.
Which is when gov't properly funds one of a dozen job skills training programs that have existed literally for decades. MMT is how it all actually works, and when properly executed, IS how you run the "carburetor" of gov't spending and taxation in a fiat currency to optimize a society.
She's an economist?!? I went out on the car lot.... There's six cars out there. But when I stand on my head? I can clearly see that now there's STILL 6 Cars there! But they're upside down now. 6 represents something. Turn a 6 upside down, and it's still a Fricken 6. But she's actually stumbled upon something... Just like so many other areas of daily existence... We've disconnected practice and theory from reality. And it's no wonder that so many people are now starting to say, "I don't trust the experts anymore!" When experts like this spout nonsense. Sadly this has led to legitimate Science and technology and mathematics being called into question... Because experts have sold out 'Truth' to the highest bidder for so Long that the masses, who recognized their own limited understanding started to realize that their intuitive sense of what is, wasn't lining up with the experts anymore
The main problem that is not addressed is the fact that managing inflation of a massive system is like trying to dock the Seawise Giant while she’s at full speed! That level of accuracy and control is not easy to attain in a moving economy!!! 😅
Which is why there should be no attempt to 'manage' it, because it can't be done anyway. The free market should price the cost of money. The only reason why the free market is hindered from doing that most of the time, is because half wits control the printing press and introduce distortions all the time.
@@willnitschke But the problem with the free market is it creates excess inequality; which leads to revolutions. How do you suppose the free market can create a stable society under modern expectations of the Democratic population?
@@RadicalModeration The free market doesn't do that, your government does. 😅 Here is an example, the Fed engages in QE. This is a massive asset purchasing program, which causes the price of assets to rise. Who owns most of the assets? Rich people, of course. So the rich get richer. But all in the name of helping the middle class, of course. 😉 *How do you suppose the free market can create a stable society under modern expectations of the Democratic population?* By having more of it, and less government 'help'.
BTW, I don't see what you follow-on comment (assertion) has to do with your original point about how the government has a hard time managing inflation. It's of course understandable that it would, as it's the primary producer of inflation to begin with.
I wonder where the data came from to correlate deficit to the surplus. How do we know there wouldn't still be a surplus without the deficit? Considering the government is very inefficient, her graph pretends its a 1:1 correlation. Did she factor in the surplus there would of been if there wasn't inflation from deficits from increasing the money supply?
Wouldn't it occur to the MMT proponents that, if they "only" have to monitor inflation, at the very least, the debt and deficit are metrics you'd use as early indicators of when you're about to enter inflationary levels of spending? IOW, even if you try look at it from their perverse perspective, the debt and deficit should still be very meaningful (and very distressing at current levels).
Then why is FAMA saying their broke an can't help hurricane victims? The GOV. has a blank check then Wright a fat one for all those folks who lost loved ones, homes, their way of life! THEY NEED HELP, AMERICANS NEED HELP NOW!
Politics. They want to get rid of "maga" voters and replace them... especially in swing states... also giving the new imported voters lots of stuff to entice them to be loyal to the party that promises them plenty of benefits.
So, let's imagine YOU are the US Gov't, and you print $100 to buy toilet paper for your bathrooms from me. Do I NOT have the $100 and didn't you spending that money help employ some toilet paper factory workers, paper recyclers, truckers, etc.? where is the "accounting trick" in that? When you "take" money from somewhere, doesn't it BY DEFINITION have to "go somewhere"?
A government could in theory buy everything. Society may collapse around it, but the government, if backed by a sufficiently capable military, would not. What's not to like?
Just print the money to pay is silly. If it does not come with consequences, why not just give everyone $1bn each and no one will be poor? Why $1bn, why not $2bn? Of course argument is inflation. Then the question is, what kind of spending will cause uncontrollable inflation? It is very hard to tame inflation as it is, and we do not know of any effective surgical policies that will keep inflation low and yet allow vast deficit spending.
Yes, an industrious counterfeiter will never run out of money. But a big enough counterfeiting operation can lower the value of everyone else's money to finance itself. Even if it's spending its funny money on roads and bridges, it is impoverishing citizens by reducing the value of their holdings in money. Am I missing something? If printing money is harmless, why shouldn't everyone do it?
The trick is that "the private sector" includes the entire economy minus the government. So of course all government spending goes to the private sector, because that's the only other party to trade in this simplified model. Nevermind the massive wealth transfer from the average person to weapons manufacturers, bankers, government contractors, bureaucrats, politicians' private stock portfolios, welfare recipients, etc. That's all technically part of "the private sector."
Stephanie Kelton said "Just as a 6 becomes a 9 when looked at from a different angle..." THAT is the crux of the problem of MMT. A 6 NEVER becomes a 9, no matter which angle you look at it from.
@@willnitschke "She's just trying an even simpler version of: "Someone's deficit is someone's surplus" "Except that's even dumber than the 6 is 9 claim. 😂" so, YOU be the US Gov't and PRINT $100 and buy a truckload of toilet paper to put in your bathrooms from me. Don't I HAVE THE $100? It's not rocket science....
@@brianmi40 Yes it's not rocket science, yet it still confuses people like you, doesn't it? An expense is not an asset, genius. 😅 Oh and whoever supplied the toilet paper didn't get $100. He got his margin, which was maybe $5. Because he has to pay someone for the materials and labour, which let's say was imported from China. So now the government has a $100 debt and the local supplier has a $5 profit.
Except when the red ink gets put, not into black ink, but cronies, war and losing enterprise (eg Solyndra,etc). She’s making a grandiose assumption that “government” makes perfect, unbiased decisions. History and current experience suggest otherwise. Especially the more removed spending is from accountability.
@@mankisito I believe you're conflating deficits and money creation, but in fairness Stephanie Kelton does as well. But Deficits don't mean a reduction in the populations spending power. As to how much the government misallocates spending, that's dependent on your version of ideal is and should be taken in perspective of how much is poorly vs well allocated.
@@neolithictransitrevolution427 The treasuries created (deficit) are largely bought with money created by the FED. China bought a trillion of US treasuries, Japan a trillion, Europe let's say 2 trillion, all other nations 2 trillion and individuals at most 5 trillion. If my estimates are correct then 20 trillion was bought by the FED with money they "printed" out of nothing. So deficits do equate to money creation.
@@neolithictransitrevolution427 *But Deficits don't mean a reduction in the populations spending power.* It does actually, as seen by the correlation in all heavily indebted advanced economies relative to the decline in GDP growth. *As to how much the government misallocates spending, that's dependent on your version of ideal is and should be taken in perspective of how much is poorly vs well allocated.* In economics an asset is defined as something that adds productive value to the economy. I.e., adds goods or services to output. Given that the big three: entitlements, the military, and debt servicing, do not meet the criteria of asset creation, then the vast bulk of government expenditures are now 'misallocations.'
To all the viewers of this video: The analysis shown here is INCORRECT. Though Modern Money Theory has its limitations, (mainly that it is centered on the United States), the description it has developed on how the monetary and financial systems actually work is spot on. The statement, “there is nothing special about the US government,” is incorrect. The US government creates the money that it spends and that is “a game changer.” Every time the government goes into deficit, it creates fiat money. This is a good thing because that money enters the economy, but it does not represent debt for the private sector. What Kelton is saying in the video is correct: the deficit of the government is the surplus of the private sector. Back in the 70s, English economist Wynne Godley developed the “Sectoral Balances Framework” and reached the same conclusion. If the government runs a balanced budget or runs surpluses it does not create fiat money. This means that the private sector will only have access to credit money (the money created by banks). But this means that the private sector must go into debt. High levels of private debt were the main reason behind the “Great Depression” and the “Great Recession.” Now, the economist on this video says “how is the government going to pay us back (those $28 trillion)”? The government does not have to pay it back because paying it back means that the treasury bills in the hands of banks, homes and corporations would disappear. Those treasury bills represent a very safe financial asset for the private sector. If that debt is paid back, the government will be in surplus, but the private sector will be in deficit. Two final things: i) public debt is not the problem, private debt IS the problem; ii) US citizens should not focus on the deficit, they should focus on how public money is spent. It should only be spent on productive projects.
*the description it has developed on how the monetary and financial systems actually work is spot on.* The MMT description is childishly idiotic and hardly "spot on", even if some anonymous twit makes such an assertion. *The US government creates the money that it spends and that is a game changer.* While some governments can print money, the US government cannot. You can't even get the really basic stuff right. *Every time the government goes into deficit, it creates fiat money.* No it doesn't. If I buy a government treasury I am handing over existing money from my bank account, nitwit. *What Kelton is saying in the video is correct: the deficit of the government is the surplus of the private sector.* No it isn't in most cases. This is to confuse assets with expenses. Everything in your comment was basically confused nonsense, sorry.
@willnitschke Why the insult? Can't you have a conversation like a normal person? The government spends by creating money. It destroys that money when it taxes. If a government spends more than it taxes, fiat money has been created. That is money in the bank accounts of the private sector. By law, bonds have to be issued equal to the deficit. A safe financial asset has been created for households, banks, firms. That's the way the monetary system works, whether you like it or not.
@@carlosenriquecalderon7409 Sorry, I made a mistake. I wrote that there was _almost_ nothing correct in your comment. I read your comment again. There is nothing you wrote that was actually correct.
We are being colonized by Global corporations who only think about maximizing profits. We will be taxed into poverty to pay for the infrastructure and services for these millions of new consumers. They will get UBi to buy clothes and iPhones. We pay for the healthcare and daycare of the low wage employees of Costco and McDonalds. We subsidize the profits of Global corporations. The goal is to make us all poor through inflation so that we have to sell our homes at a discount. Then we will own nothing. We will have no economic leverage against Global corporations who own Western governments. We will all be ens/aved. Mass immigration is the path to neo-feudalism. When we live from paycheck to paycheck, we have no way to resists against corporations sending our kids to fight their imperial wars.
Is there a limiting principle? Ask yourself: Would it then be fine to run $100 trillion deficit every year? How about a quadrillion? If it really is a perpetual motion machine, it’s all benefit at no cost.
@@VeniVidiVid no one is arguing there are no limits. Banks borrow and use that to leverage investments, and increase the money supply while doing so by making loans. But because they make productive investments, this is not inflationary. The point is only that the government can create money to make an investment or fund a program, and the economic growth will expand the tax base enough to collect the created money. That doesn't mean there is an infinite number of productive spending activities. It doesn't mean that the returns will fully cover the program. It just means that if economic activity and the tax base expand because of the spending, the increased demand for dollars can balance out the money creation. Again, as banks do when making loans. The dialogue around MMT is mainly to push the idea that we should focus more on the productivity of our spending programs rather than looking at the deficit or surplus in a tax and spending plan.
She already lost me right at the beginning, a six is still a six and a nine remains a nine no matter what angle you look at it. Just because you look at a six upside down, does not make it a nine, that is not how maths works, it the same way that having a 80085 on your calculator does not suddenly give you boobs. A trick of the mind does not suddenly represent reality. Try is with actual real things, try looking at 6 cows at a different angle and see if you magically get 9, if you claim that people would call you crazy yet some people think MMT is sane.
@@theBear89451 The person who actually spells out the right number, whatever the number is, a six CAN NOT be a 9 at the same time, that is a contradiction. It can either be a 6 or a 9, not matter what angle you look at it from, but not both. The angle you view it from is completely irrelevant to whether a 6 is a 6 or a 9 If one is stating otherwise, they are at best performing voodo or at worst they are grifting, but they are NOT speaking truth. If type a 6 on your laptop, and then turn the display around so it now looks like a 9, does that make it a 9? Of course not, its still a 6, you just have the display upside down. The computer will still interpret it as a 6, if you ad 1 to it you will get 7 and NOT 11 !!! And the truth is, MMT is BS! They are just Grifters trying to confuse people with a economic sleight of hand (i.e. they are pretending that a 6 is a upside down 9, when it never was), its just designed to confuse people.
Abraham Lincoln once posed the question: 'If you call a dog's tail a leg, how many legs does it have? ' and then answered his own query: 'Four, because calling a tail a leg doesn't make it one,'
But you got to love how MMTers tell you that MMT is just double-entry bookkeeping, then go on to demonstrate they have no understanding of how a ledger actually works.
@@Richest_Person_in_the_World Keep trying to defend all the stupid things MMT proponents say, bro. Given how stupid you are yourself, can't see that working, though.
Stephanie Kelton's explanation of how government spending could be inflationary was wrong. Inflation is caused by devaluing the currency, which is done by printing more money. Or, as Milton Friedman put it, inflation is caused by too much money chasing too few goods. How do we get 'too much money'? By government spending that is unconstrained by society's inability to lend or be taxed to cover that spending.
The idea that spending results in a symmetrical value in the real world is an outrageous assumption. It is always possible to waste resources on useless projects-and all while devaluing the currency for everyone. Who is to say that Government won't squander its resources? Government is always insulated from free market accountability ordinarily ensuring that it will be the least efficient way of accomplishing anything-if it accomplishes anything at all.
@@Richest_Person_in_the_World If government debt is equivalent to income producing private assets, why does government debt constantly rise in proportion to GDP? Why aren't they in equilibrium as MMT asserts?
@@willnitschkeBy private assets, we mean nothing but Dollars. We count them as a financial asset. Just as you would reject someone's claim of being poor if he had $1 trillion in the bank. You would insist: "That is plenty of assets you've got, 1 trillion dollars." So Kelton is explaining that dollars handed out by government are Assets to the public. Specifically to those within the public that received them.
@@Richest_Person_in_the_World Professor Sh*t For Brains, currency units are used to price assets, they are not assets in themselves. If they were, the Venezuelan government could just "print" a quadzillion Bolivars and everyone in the country would be an instant billionare.... Half your comments assert that currency units are assets and the other half deny that they are. You're an imbecille mate.
Where does he think the $100 dollars came from for the robber to steal? Somebody had to print it didn't they? If the Gov didn't print money, he wouldn't have his $100 in the first place.
@@Richest_Person_in_the_World Of course it does, Professor Sh*t For Brains. That's EXACTLY your claim you've made in the comments sections dozens if not hundreds of times. The thing about nonsensical ideology, is the nitwit will tell you what it isn't, but will never do the opposite, because it obviously makes no sense.
@@willnitschkeMMT says that moneyprinting creates Nominal Savings not real wealth. That is where you get stuck with your Room Temp IQ (in centigrade at that)
Definitely a serious argument out there that it was still transitory, just lasted longer than they thought. In other words, it was supply issues, more than too much cash, that drove inflation, and it took time to get all those fixed.
I have viewed many of Murphy's criticisms of MMT. They are all presented in a manner that one would believe that we are still under the Gold Standard. He offers no good explanations because he reverts right to that era, where Fiat currency did not exist and we still had commodity backed money which is no longer true. He can't seem to accept the fact that our currency has value because our government mandates it and that is good enough for almost all of us. Under our fiat system we have to accept this because nothing else has been proven to be better certainly not commodity backed money. If we were the only country with fiat money and the rest of the world still backed their currency with a commodity like gold, Murphy's argument might have more value. But the fact is that the rest of the world is on the same fiat system we use here. Listen to him and count the number of times he compares government finance to our personal finance or the finances of corporations. None of those arguments are legitimate under our current fiat system.
And he uses patently wrong examples. "Oh it's the same with my debit card when I buy spinach. If my account is empty, according to Mosler I can just take it." Facepalms galore
Your attempts at criticism are laughably ignorant, sorry. Murphy has written books on money mechanics. People like you wouldn't even get past chapter 1. 😂
Whether the Austrian school approach, Keynesian, or MMT, all are more alike than different in that they all depend heavily n a strong economy and economic growth in order to maintain the desired level of public sector, and/or maintain fiscal balance. Think how long we’ve had with there existing this large and looming deficit, continually growing too. But have we collapsed? Have we, those future generations who were told will have to pay for this out of control spending had to? No, we keep experiencing tax breaks more than hikes. The US economy continues to be strong enough to pay on its debt, and the US dollar is still the world’s preferred default currency. Under the Austrian school, maintain a lean public sector, strictly financed by taxation and rely on supply side economics to foster as strong and booming economy as possible, knowing of the business cycle, thus lowering interest rates when the down turn starts to occur. Of course this doesn’t work like a charm, the central banks aren’t that precise in knowing when to change interest rates, and with no greater public sector this model allows for, social costs become so great they’re unbearable. With the Keynesian model, the fiscal deficit spending need go for objectives that either create great savings for private businesses, or foster additional new and sustained growth in the private sector, or both, known as the “multiplier effect,” which, increases the tax base which the government brings in to more than compensate for the deficit spending that occurred. With MMT, whether borrowing by issuing treasury bonds, or just creating additional money for fiscal spending, such has to go for additional expansion of the economy balanced by how much/many resources exist to do so and keep operational. Then again, the increased tax base this creates pulls back the surplus dollars out of circulation where it could cause inflation. But, inflation isn’t likely when this surplus is used to create additional wealth generating businesses in the economy, where the people working within it, creating the additional wealth will have need for more dollars. The only real reason more money needs to be created is when the population grows beyond what supply of money exists thus can’t accommodate the demand for it to conduct exchange. This, or the degree of static population grows in affluence and spends more, thus has need for more dollars to use, with that lifestyle change. Never forget, at its base purpose, money is simply an exchange tool for conducting trade that eliminates the need for directly having to barter.
*But [when we use MMT to print money], inflation isn’t likely when this surplus is used to create additional wealth generating businesses in the economy* Except politicians are morons and they always spend the money on boondoggles for re-election purposes or to pay off the people who got them into power. So that's a fantasy, sorry. I should also add that the consensus of economic research on government spending is that once it exceeds 100-120% of GDP, every dollar of stimulus offers a negative return over time. This is why we likely see a decline in rate of growth of GDP, with the consequence that debt as a proportion of GDP continues to grow. If your claim made the slightest bit of sense, we would see the opposite.
I tried to tell my bank that if they looked at things differently all the 6s in my account could be turned into 9s and I could spend them. That didn't go over well.
Schiff definitely does not support MMT and doesn't acknowledge anything good about it. Is why lije many others who have staked out positions in the past and resist anything new that might be better.
@@tonysu8860Yeah he opposes it, but also Gets the part where USD is a tax credit. So it is actually bizarre that Schiff as a Dollar Hater actually thinks there "more to it" than what MMT says
@@aquious953This summer a cab driver charged me 120 or 130 euros which I felt was too steep, but he was like "No no it's normal." But then I went to the Carrefour supermarket and got some ice cream, fruit etc. and the tab was like 2 euros. It was then I knew he had robbed me blind. Anyway the supermarket bill was not 500 euros as you claimed and used taqiyyah.
@@Richest_Person_in_the_World *Color me skeptical. It would be $50 here in Europe* That's because your mum does most of your shopping for you. You're just accounting for the cost of candy.
@@Richest_Person_in_the_World Professor Sh*t For Brains, that's like saying because the government stole 90% the money in your bank account, it's OK, because they're only stealing a smaller amount this year. 😅
@@Whowhatwherewhen5Yeah there is no such thing as runaway inflation, it's a discreet phenomenon. It won't run, unless you constantly make your own move each time. And the move is to pay higher prices each year for the same thing.
@@Richest_Person_in_the_World Sh*5t for brains, these are the countries that recently experienced run-away inflation which you say doesn't exist - - Germany (Weimar Republic) - Zimbabwe - Hungry - Yugoslavia - Venezuela - Bolivia (1985) - Argentina (1989-1990) - Peru (1990) - Greece (1944) - China (1949)
Recessions are part of the economic cycle, all you can do is make sure you're prepared and plan accordingly. I graduated into a recession (2009). My 1st job after college was aerial acrobat on cruise ships. Today I'm a VP at a global company, own 3 rental properties, invest in stocks and biz, built my own business, and have my net worth increase by $500k in the last 4 years.Read more
Let's face it... buying more stocks & index funds during stock market corrections and bear markets is scary. Which makes it really hard to do for most people like me. I have 260k i want to transfer into an s&p but it’s hard to bite the bullet and do it.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.Read more
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.Read more
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I actually subscribed for a few trading courses but it didn't help much, been getting suggestions to use a proper financial advisor, how did you go about touching base with your coach?
How can there be no inflation? If you put ten dollars under your mattress in 1980 that ten dollars will not buy you the same goods and services in 2024. The sky falls for countries that print their way out of financial troubles. The US has inflation it’s just not 1000% and crippling society.
@@E2680-l5yThe government aims to have 2% inflation and in reality they have 3%. Big whoopty doo. Can't you make an additional 3% annually?
4 месяца назад+1
@@Richest_Person_in_the_World 3% after 50%+... Perhaps you don't understand how compounding works... the effective rate since 2020 is way higher. Just because it went up 50 and then only 3% more of that...
It’s not about what is happening today it is about what could be if governments are irresponsible. Thats the entire argument, she said governments should spend without concern for consequences. There are consequences and examples are countries like Argentina. This isn’t about getting an extra percent return in personal finance, that is narrow minded thinking. This is about policy and the impacts it has on society.
@@johndelia9408 Not her, but Warren Mosler (arguably the founder of MMT) has a debate on RUclips against Bob Murphy. It's very good and a much better discussion around the merits and flaws.
The general public now accepts all other forms of taxation as legitimate means of operating government. I’m sure the general public will accept direct inflationary money printing as a legitimate government operation in the near future as well.
I don't know if MMT is correct or not but your guest Bob Murphy immediately discredits himself with his initial analogy of Google issuing bonds. One of the fundamental parts of MMT is that when the government issues bonds it issues bonds in its own currency. The government also controls the currency so it can also print money to cover its debts. By printing money the government could cause inflation. That's why there's an emphasis on controlling inflation in MMT. In MMT you control inflation by raising taxes and raising interest rates. The closest comparison for a corporation is probably Google issuing more stock. Google controls its stock so it can always issue more stock, but by issuing that stock it devalues the stock of the existing stockholders. So either your guest just doesn't know what he's talking about or he's being intentionally misleading. I find in a lot of these conversations about MMT, the people who are trying to discredit it don't really take it seriously enough to actually study it so they can refute it.
*That's why there's an emphasis on controlling inflation in MMT. In MMT you control inflation by raising taxes and raising interest rates.* No there isn't... So the "fix" for the inflation that has crushed poor people in the US in recent years was to raise their taxes? Do they even pay taxes? Or is the fix to raise taxes on the productive segments of the economy and cause a depression? MMT theology is completely moronic... 😅🤣😂
@@willnitschke we don't have an administration that is practicing MMT right now. So the poor and middle class are just suffering under the current system. If you really want to understand MMT then I suggest you read Stephanie kelton's the deficit myth. Like I mentioned before, I don't know if the theory holds up. I think there are a lot of questions around if the government would actually respond if inflation got out of control under MMT. But what I see is a lot of lazy responses to why MMT wouldn't work. Especially with so much dissatisfaction with the current system.
@@klf9161 I've looked at. It's nonsense. I have better uses of my time. This stuff is ideology. I'd ask you to ask yourself, why are you taking seriously the incoherent writings of a self published crank (Mosler) and grifters like Stephanie Kelton who is primarily out there promoting this stuff to achieve power and prestige. Now Kelton is no fool, but she's been serially wrong about the economic consequences of her ideas. What's happened in 2021-24 essentially refutes her.
It's shocking. MMT is not that complicated, though it does uproot a lot of concepts we grew up with. Everyone first encountered paper currency at age 3
@@willnitschke good luck learning about anything worth learning from a TED talk video, much less from a commentary video. As a description of the current macroeconomic system we live in, MMT is spot on. Anyone who says otherwise is referring to a system that is a century old, like the guy in beard is, or just referring to a fantasy island economy.
@@Whowhatwherewhen5 The only reason you have Dollars in your pocket is, because someone else is willing to take a loan. (The central bank for high powered money, others for other money). If nobody is willing to take a loan, you wouldn't have any money.
If Modern Monetary Theory worked, Venezuela would be the richest country in the world. Didn't Zimbabwe try MMT under its dictator, Robert Mugabe? The result: history's greatest hyperinflation.
Nobody said printing money produced real wealth. However that equation works backwards too: real wealth is not a constraint on printing dollars, therefore stop saying stuff like "We've run out of dollars."
@@ngana8755Not sure what you mean, but you certainly dodged the point. If moneyprinting is disconnected from real wealth creation, that only proves the U.S. can pay its bills.
There is so much straw manning in this conversation from Bob Murphy. You should really get Stephanie Kelton on. That would be a great episode. A remember watching a debate years ago between Bob Murphy and a MMT proponent and Bob Murphy lost badly. It's like his neural pathways are so hardwired to see the world in a certain way that he doesn't have the mental agility to entertain any other perspective. It just doesn't compute for him. I remember when I came across MMT for the first time after I had been wrestling to make sense of quantitative easing after the 2008 financial crisis. Using an MMT lens suddenly everything makes sense once you properly understand it, and you can't understand it listening to a second hand critique. Of course MMT economists can be wrong. They can make misjudgements like anyone else. But they do have the right framework for understanding how modern money works and not having that understanding can lead to big mistakes in policy making.
Totally agree, but with respect to this video and countless others on the internet. The world would be such a better place - and people better informed - if there was more healthy debate, rather than one side poo pooing the other and vice versa. So I vote for inviting Stephanie onto the show.
Hello. I have to say that you are making a big mistake if you think they the proponents of MMT have a good understanding of the framework of modern money. Refer to my comment made in main chat. In essence they ignore the second side of the creation on money on the banks' Balance Sheet. Thanks
Don't look at foreclosure as losing a home, think of it as a bank gaining an asset.
Bank is not gaining an asset, but whoever buys at auction shold be.
@@aaronfreeman5264
Unless the buyer buys the house outright the buyer has a mortgage.
A mortgage is a liability for the buyer not an asset.
However the mortgage ( in the form of mortgage payments ) does become an asset to the bank that has lent the money.
but,
Even if the buyer buys outright the house only becomes an asset after the bank that foreclosed on the original mortgage has sold its “asset” to the buyer.
Wrong, the bank's asset is having a federal reserve account.
Brilliant!
Let’s hope all Americans are foreclosed on and we can finally save the economy
🤣🤣🤣👊🎯🎯🎯
I only had $0.0000008 in an account, but I had a talk with the branch manager, turned the statement upside down, and she agreed and fixed the computer, I'm a multimillionaire now. It's all about communication skills.
I cannot believe she actually said that, again I ask: where are these “economic” experts coming from?
Why do we even bother to keep a record of who owes what to whom?
@@thedave7760 Assuming you mean who owns how many dollars to whom, the first question has to be how did these dollars come in to existence in the first place? How can a dollar come into existence without somebody owing somebody something? That has to be fully understood before this topic can be rationally discussed.
I had 58008 in an account and turned it upside down.
The Jedi mind trick strikes again.
Devaluing the dollar is insane unless you hate citizens.
The world... it's insane that they'd subject everyone to it.
It’s good for asset holders, but bad for laborers. Reference: 2020 to today.
If you want the goverment to Hand you a sound currency, you are asking for a government handout
And love corruption.
It’s actually not necessarily bad for laborers. A devalued dollar means labor can be more competitive at home in the USA. We’ll see a lot of factories spring up at home rather than manufacture everything overseas.
Ripping people off isn't bad. You need to look at it from the perspective of the scam artist
If the person being ripped off originally intended to rip you off, then I say it's fair
@@Richest_Person_in_the_World Except nobody wants to be ripped off, so not fair. Still.
@@willnitschke If there was Person A who started out as a scammer, then it is fair to scam him. In this case, people who supported Taxation prior to learning its MMT role.
@@Richest_Person_in_the_World People forced to pay taxes are not scammers. Still.
@@willnitschkePeople who advocate Taxation are scammers. Their intent was to rob thy neighbor
She's totally disconnected actual goods and services from the amount of money and increase in productive capacity. A recipe for inflation.
it used to be working coz china and japan were buying up all the excess bond. create a cheap cost of borrowing and avoiding high inflation. but now no foreign country buying up the excess bond, hence it will cost inflation.
This is 100% correct! Even worse these people believe in Keynesian economics but they only follow the part about deficit spending during a recession. They will never stop spending so we will never have a baseline on the economy to know if we should be running deficits or surpluses.
@@objectivethinker3225A government suprlus means your bank account is getting drained. Not ideal
@@Richest_Person_in_the_World No, a fiscal surplus can be used to pay down the national debt. But you are correct if we didn't have 35 trillion in debt.
@@Richest_Person_in_the_World What you say is undoubtedly true and bad for you, but this is supposed to be from the government's POV. Whoa - that rhymed!
Following Kelton's logic, if deficits don't matter, why bother taxing at all?
Exactly. Just print money
@@goranserka3601 Because taxation gives value to the currency
Keltons what? That woman is delulu
1. To create demand for that currency
2. Tax can be used to control inflation
3. Tax can be used to create more equality
4. To exercise nation-state power, monopoly of violence and taxation (death & taxes)
PS. I'm not MMT supporter!
@@pnc1358 Tax cannot be used to control inflation. This MMT brain fart is among the dumbest offered by the ideology. If poor people are struggling to pay rent or buy food, you can't just raise taxes on them so they become homeless and starve to death. Technically, that will 'fix' the inflation problem, sure. By creating a lot of dead people. Or you could raise taxes on Corporations instead, which will be passed through to consumers (as all operating costs must be), and this will cause even worse inflation.
Listening to her speak is like listening to a teenager talk about credit cards. "Yeah, you just use the piece of plastic and it pays for whatever you want! its free money!"
Not really the same because you owe to your bank, while the government does not owe to that bank
@@Richest_Person_in_the_World What do you think happens when we run a deficit? We raise the national debt. If we default on that debt, it can be catastrophic to the entire country.
@@novacorponlinewe don't default on the debt, we print more money, which can or cannot cause inflation depending on where the money goes and what is available and needed in the economy
The Richest Person In The World is right; don't insult teenagers, by comparing them to Kelton. At least a teenager will bear the cost of their debts themselves, or maybe with their parents' help. The government makes 7 billion innocent 3rd parties pay for their handouts to weapons manufacturers and government contractors and bankers.
@@novacorponline If the government loads my account with $1,000,000 yes that is public debt now, but it's my asset as a citizen. Therefore you should rejoice at the realization that the deficit clock is your savings clock
I knew that lady was nuts when she used that "6 or 9" analogy. Someone drew that 6 or 9, so someone knows which one it is, therefore there is an objective right and wrong answer.
Subjective morality is poison to ethics. Didn't know subjective economy was a thing.
Its value that’s subjective. “The economy” is a figure of speech.
@@theGefilteFist
"Subjective: characteristic of or belonging to reality as perceived rather than as independent of mind".
Price is subjective. Value is not. The circumstances in which an item is presented determine if it has value or not.
Gold has objectively no value, outside of computer chipping and electronics. Its price is based entirely on subjective assumption rather than objective utility like steel or gasoline.
@@1krani price is literally printed on the price tag (where applicable). Everyone has to decide for themselves if the value they get out of something is worth the price cuz the value only exists in their heads
Subjective morality is the only morality, that actually exists. Subjective economics ofc does doesn't exist.
@@vulgoalias4050
For morality to be subjective, one would have to believe that certain ideas or actions are not inherently hypocritical or self-destructive. Rape springs to mind.
If deficits are a good thing, why have any taxes?
To instill value into the currency
You think you're calling their bluff, but MMTers, Thomas Pikkety and others have said that taxes should be understood as a social engineering tool rather than a finance tool. The point of taxes is to punish you for behaviors the regime doesn't like, and to control the flow of resources so that wealth is distributed according to what the regime thinks people deserve instead of according to what they earn through voluntary exchange.
Obviously to tax production, so it doesn't become "overproduction".
You have noticed that all taxes, except for VAT, are on resources for production, haven't you?
Once upon a time it would have been enough to tax gold mining 🙂
To tame inflation & prevent extreme wealth disparity.
@@larsnystrom6698 *Obviously to tax production, so it doesn't become "overproduction".*
The only thing obvious in that statement is that your brain doesn't work.
Post-modernist economics :(
Post-common sense economics!
Post intelligence economics.
The real question is why they follow Keynes... he's the one that lost the power for England iirc.
MMT is literally just how the economy works.
It's not making anything up.
@@coolbanana165 Then it's a description, not a theory. Theories should allow for prediction, and description just says how things are, and not how they will be or should be. Not that description aren't useful, but they're useful in a different way than theories.
We simply have liars running things.
The name of that liar is Putin
@Richest_Person_in_the_World What flavor was the Kool Aid ?
@@Whowhatwherewhen5Am I supposed to praise the Kremlin in order for you to label me a free thinker
@@Richest_Person_in_the_World As far as I can see, your role in these exchanges is to be the virtual equivalent of the Village Idiot.
Not just liars, they're also stupid and greedy
She advised Bernie Sanders, is there really anything else that needs to be said?
Remember how they loved Venezuela as an example of socialism working...
Any system can work if you have vast amounts of oil wealth. Saudi Arabia is a dictatorship or a kingdom depending on your perspective and they have a pretty good quality of life.
@@danparish1344 Depending on your class. Outsiders don't find it so good.
@@danparish1344 they have low crime because the harsh punishment is a deterent.
Come on, man! Socialism just hasn't been done right.
Dont think of an IRS audit as something to dread, think of it as they're your friends coming by for a beer
Your beer and your chips and salsa!
Reminds me of that scene from Wolf of Wallstreet.
97% of our currency is created by commercial banks. When a bank issues a loan, it creates new money digitally and charges interest on it.
For a 30-year mortgage, you’d work about 15 years to pay off the interest alone, all for money created with a few keystrokes. Let that reality sink in, and you’ll begin to understand the flaws in our financial system.
First, don't tell the MMT crowd that private commercial banks create most of the currency, as they all think 100% of it is created by their all powerful government. 😉
Secondly, what is the alternative to loaning money? Nobody is going to give you their savings for free. People aren't stupid. Are we supposed to rent for 60 years and buy our home for cash at age 70?
Most people do not understand this. And the people who benefit from this hate MMT.
@@charlesloucks1840 The people who 'benefit' from MMT are the wealthy. The people who are screwed by it the most, what I call the "useful idiots of MMT" are the bottom tiers.
That’s how banking has always worked, though. It’s how it worked in freaking 1500.
Re: "For a 30-year mortgage, you’d work about 15 years to pay off the interest alone"
Its what moderates consumption and forces people to work. Society couldn't exist if nobody worked and the pay rates vs interest rates vs desire to succeed all go towards a successful society. Imagine if money was simply given to everyone instead of being difficult to accumulate. Where is the incentive to produce that food and build those homes? This woman is absolutely clueless as far as human behaviour goes. But then again perhaps she's playing devil's advocate very successfully. Sadly I suspect its the former.
An important point for anyone to understand is that money itself is not wealth; it's merely a tool, a medium of exchange for goods and services. A good currency, like gold or silver, will also have other properties and can be a store of wealth, but ultimately, it's the exchange function that's the most important.
Wealth is actual goods, services, and resources utilized for goods and services. It should be obvious that merely printing more money not only doesn't create new wealth in the form of goods and services, it dilutes the rest of the currency in circulation, devaluing the currency and causing price inflation.
Borrowing money is trickier, especially when the government's doing it. Still, like any borrower, the government either has to pay it back or default on the loan. They often get a pass because it's the government borrowing the money, but they shouldn't. The money government borrows has to come from somewhere, and the question is where would the money have gone if government hadn't borrowed it?
Either way, printing or borrowing, the government isn't "stimulating" the economy into creating more goods and services, it is merely redirecting the economy into whatever industries or sectors they think need 'stimulating'. The government can never run out of money, but the more that they borrow or print, the more bad consequences they create. That's why it's not "free" money!
Stephanie Kelton is wrong to say that it would be inflationary for government to spend only during "full employment". How many concrete workers and architects does she think are unemployed? And government spending rarely targets specific groups of people in such a way. She's just expecting, or perhaps *hoping* that those unemployed people will become employed due to government spending. This is reckless thinking when you can't explain how it will happen.
MMT'ers will respond by noting the difference between the money supply and the money supply as measured against economic output. But, 1-2% inflation is still inflation, and the Federal Reserve understood this when their inflation target used to be 0%. Heck, Hanke says the target should still be 0%; it's a fair issue to debate. But even if there are some MMT'ers who want 0% inflation, they are still ignoring the counter-factual inflation which comes in the form of central banks preventing slight deflation----technological/growth deflation, which is OBVIOUSLY good deflation.
@@MBarberfan4life Right. Deflation is only a problem for people (and governments) in debt!
@@macsnafu and that is only credit deflation, particularly when wages fall more. But there's nothing bad in itself with falling prices, because a growing economy brings prices down, particularly in terms of our wages. That's capitalism
The problem with MMT is that they believe the relationship between inflation and employment is a step function. Everything else is main stream econ. Your post assumes people are rational, but they change their work and investment patterns based on feelings. The government can change people’s behavior (feelings) so they work more and make more stuff.
Mac
Look up goldsilver money or Mike Maloney. He does have some good videos on money. There’s a reason and historical reason he always says gold or silver is money but the U.S. dollar today is fiat.
Currency doesn’t preserve purchasing power. Money has like five key tenets that a good money must have and preserving purchase power is one of those.
You’re right. If gold is found in mass quantities it’s inflationary. Now gold is a good or product in itself as it’s more rare. So even if it wasn’t money it’s worth something unless if you’re a Native American or some tribe using other things for barter. Some tribes used gold for barter but some used sea shells etc. and Polynesians on one island rowed 200 miles to another island to bring back a rock and that rock was considered money.
So ya people should distinguish between money and currency.
I've seen so many people say the government CAN'T spend too much money. That's an impossibility unless making money worthless is the goal.
This feels like your projecting your bias onto what people say. It is literally true that the US government, as the sovereign issuer of money, is able to create and spend money on whatever it wishes. But that’s not the whole story. Every MMT’er, Kelton included, caveats that with the limit being the inflationary pressure of that spending. Don’t let bias hold you back from steal manning the arguments of others.
@@timgwallisSo how do we just create all the money we need for free healthcare, college, etc etc and deal with the inflation? That’s the missing piece of the puzzle. Monetary systems can only handle so much inflationary growth at a time.
@@januarysson5633 totally agree with the last part of your statement. However I disagree that the “how to handle” part is missing. MMT’ers make it clear that the means to deal with inflation is taxation. Creating new money increases the money supply in circulation, taxation reduces the money supply in circulation. Personally I favor a progress consumption tax. The more you spend, the higher the tax rate you pay. With a digital dollar the rates could be programmatically set to ensure the money supply in circulation new grows faster than 2% annually.
That's why we have tax, to make money more valuable.
January
In the past miners of silver and gold brought metals to mints and the mints made coin money that would be given to the miner. ZERO NEW DEBT is made when mints would convert metal into coins. Today fiat currency has made the system so when a new mortgage is made new dollars are also made. That is a totally different system.
I’m 70 years old and retired. I’ve become more cynical and listening to things like MMT over the past years. The main reason the government doesn’t have to worry about where the money comes from. Is they can always take it. They have law enforcement and jails to put you in if you don’t give the government the money.
Exactly. MMT is just a command economy with extra steps.
@@Hydengoseakutter bilge, it explains the system out dullard
Well der... Well done!
FFS, a 6 is not a 9 just because you look at it in the wrong orientation it's still a 6.
The national debt requires servicing. This means selling bonds. Every bond sold is capital that did not go to into the private sector.
This is so braindead.
Your problem is you lack the mental sophistication of a grifter such as Kelton. She's done very well out of MMT style policies, and so have many other wealthy elites, including me, I suppose. As for the working class, well that's been pretty ugly, sure.
Simple thing to remember, if you hear the terms "deficit", "print money", "borrow", "quantitative eas" these are the same things at government level, and it all leads to the same thing: inflation.
No, that is the standard non-MMT boilerplate which is wrong
@@Richest_Person_in_the_World you didn't pay attention to the last 4 years did you?
@@letsgobrandon416 He is not very bright and an inflation denier, so just ignore him.
@@letsgobrandon416What is the current inflation rate in the U.S. and what is the Fed's desired target
@@Richest_Person_in_the_World The price level is 30% higher than 3 years ago. Thanks for asking. If inflation is 50% for 1 year, then everyone is twice as poor. Even if the rate of change _then_ drops to zero, people are still twice as poor, knucklehead.
So if she's right, and the government can do all this "paying for something by printing $", then why do we need to pay taxes????🤔🤔🤔
That way the dollar becomes valuable as a get out of jail free card
@@Richest_Person_in_the_World Still confused, I see.
Under a fiat currency the point of the dollar (or euro etc) is to pay taxes. If the federal government said "We will no longer accept USD for paying taxes, from now on only Mexican Pasos will be accepted" people would stop usong the dollar very quickly, and move to the new currency that they cam use to pay thoer taxes and avoid punishment for failing to do so.
MMT is saying its okay to spend more of these than you are accepting in a given year, because you are collecting enough to maintain a demand in the market for them.
@@neolithictransitrevolution427 No it isn't. That's just a retarded line of Molser scripture. 😅
The point of any currency (whether it's fiat or not is irrelevant) is to efficiently facilitate exchange.
BTW, I can hold my entire net worth in Swiss Francs, and if I was a US citizen, and had some tax to pay, I'd just transfer my Swiss Francs using telegraphic transfer to pay the bill.
This is all sooooooooo stupid. 😂
@@neolithictransitrevolution427 This is all so stupid. I can keep all my currency units in Swiss Franc's and if I'm obligated to pay US taxes, do a telegraphic transfer, in Franc's, to pay that.
Everything MMT "says" is nonsensical, hence irrelevant. Demand for a currency is derived from the fact that dollar denominated debts are loaned and leveraged. There is always more leveraged debt than dollars. This is "OK" until there is an unwind and then a liquidity and/or collateral crisis follows. Printing more dollars does not fix anything, it makes everything worse.
MMT is so full of holes it's hard to believe it's still taken seriously, especially considering the inflation we've seen across the world since that TED talk was given.
Because it's about turning economics into theology. Hence it doesn't need to agree with empirical observations.
MMT simply explains how money is created and used in the economy. ruclips.net/video/1_vNAY2Nrm0/видео.html
So you could have Poked 1 Hole with your comment, why didn't you?
Techincally its not inflation. It's a price shock, triggered by the ukrainian war and the loss of russian gas from the world economy. Inflation happens when the price of everything, including wages goes up in a spiral like in the 70s.
@@alexrenn2479 No it doesn't. MMT doesn't "explain" anything. It's just stupid nonsense. 😂
A corporation, unless it is a commercial bank, does not create money. Is this guy really an economist?
A corporation creates the value that money is a unit of, are you really this stupid? Our current monetary system literally turned US dollars into US stock shares minus the owner rights.
A company can issue bonds for sale, just as the government issues dollar bills for sale. Dollars are iou's to the federal government, same thing.
Money is a liability to the issuer, in the same way corporate bonds are. Do you understand economics?
He’s absolutely correct
All of the interest paid on the National Debt does go to someone as Stephanie Kelton stated. This issue is it is govt. money paid that does not come back into the system in fair taxes or production. For the system to work that has to be the case.
That's just one major hole in her "logic". A lot of that debt is paid to foreigners, such as the Chinese.
The bigger hole in her "logic" is she assumes all government debt balances to assets on the other side of the ledger. It doesn't. Entitlements are expenses, not assets.
@ Entitlements like Social Security don’t add to the National Debt. SS is still in the black so no debt. Incurred. Also, SS recipients spend it back into the system which ends up working for all. Basically put, the money stays at work and causes no debt. Interest paid to China on the other hand is production lost.
@orangeofmars2835 entitlements don't add to the national debt. 😅🤣😂
Consumption = production 😅🤣😍
We should all be on welfare bro. The more we consume the richer we are! 'Cause "the money's at work". The more I max out my credit card the wealthier i become. 🤣
This is the first time I've heard MMT described by a proponent as a matter of perspective treating deficit spending like double entry bookkeeping. And it's still stupid...
Well, the science of it is 100% accurate. The implications of using it is a different question. That's why you should never listen to economist who don't understand money and banking, including this clown economist.
@@curtbalch2321 It could be worse. Imagine you're Murphy and not learning after 10 years
@@Richest_Person_in_the_World Oh look, anonymous nitwit babbling shit on the intertubes pretends to be smarter than a guy who has written whole books on topics he doesn't remotely understand. 😂
@@Richest_Person_in_the_World Imagine an anonymous half wit on the intertubes who doesn't understand what debits and credits are, or who thinks Yugoslavia currently enjoys single digit inflation, who then goes on to cluelessly attack a PhD who has written whole books on topics he doesn't begin to grasp...
So, you never understood Double Entry bookkeeping? Obviously you never worked in accounting then.
Here, I'll just give you a SIMPLE QUESTION THEN, nothing complicated at all:
Let's assume you have $100 in your checking or savings account. Where EXACTLY did that money COME FROM? (with apologies if you have your own printing press)
She should’ve explained why the government cares so much about collecting my taxes if they can just print all the money needed for high speed rail, free housing, and foreign wars.
To give value to USD
@@Richest_Person_in_the_World Bit didn’t those dollars I sent the IRS have value back when they were in my wallet? How does me giving them to the government give them value?
@@theybrokemywatchThe fact that They (dollars) are the thing which saves you from tax punishments. As in "Give us $100 or we'll jail you," you react: "Whew thank god I do have $100 here."
@@Richest_Person_in_the_World 😥
@@theybrokemywatchLike in Monopoly you have a Get Out Of Jail Free card, and you might wanna hold onto it. The dollar is such a card IRL
Creating more money is necessary when your real economy is growing. More cash is needed to complete the increased growth in transactions. But supporters of MMT mistakenly believe this relationship also works the other way around. That if you increase the amount of cash circulating, this automatically increases economic activity. In real life this doesn't work. What happens is that sellers of non-discretionary goods elevate their prices rather than creating more goods and services. There is no growth in real economic activity, just inflated prices.
With respect, i agree completely with the second statement you made, but i disagree with the first. Why must monetary expansion match real growth? Surely, deflation is THE point of an economy? Who cares if my salary is decreasing in the actual figure, if my purchasing power remains the same, because goods are becoming cheaper?
What you're describing in those sellers of non-discretionary goods are monopolies. Break up the monopolies and prices will start to come down as suppliers compete for business.
@@garethbarry3825 I agree with you, but I accept Milton’s approach of “at least don’t inflate the currency” instead of trying to argue Schiff’s position of allow it to deflate.
@@charlesloucks1840 Great idea, except private sector monopolies don't exist, only government ones. I can't shop around to get a driving license renewal for a better price.
@@jsbrads1 It's not clear to me that Schiff's position is wrong and you presented no arguments as to why he is wrong. Pragmatically, deflation is undesirable primarily because it would cause the government to collapse.
Fakest “debate” I’ve ever seen. Congrats
She talks about not being in full employment and that we have the capacity to rebuild the infrastructure. But, so what if we have unemployed people. Do they know how to use a hammer, or build a train track, or lay concrete?
Frankly speaking, in all likelihood yes, they can. Employment in Construction seems to vary most much more than average with recessions. Many recessions are primarily a result of a building collapse, 2007, Savings and Loans Crisis, the Great Depression, etc.
But more to the point, you are correct that not every unemployment individual will end up working in construction. But I do support the concept of a Guaranteed Employment scheme. I would suggest keeping the federal government, which responds slowly and bluntly, largely out of the operation. Instead I would have a federally funded program wherein Municipal governments and Charities can pay people minimum wage for 8 hours a day 5 days a week. I would also open it up to Manufacturing companies to cover up to 6 months of training, although half the cost would have to be repaid if the trainee wasn't employed there a year later. Smaller and generally financially strained entities will react much more quickly and efficiently to the available labour pool. They aren't stealing jobs from the private sector because of the limits on hours available and wage. But it would keep employment up in a recession while getting things done.
or want to? full employment is only possible when you remove welfare (besides disability)
i work in construction management in DC area which have a hiring law called First Source. we have to hire DC residents to fill our jobsites in DC that receive public money. the problem is many people would rather not work and live on public assistance, than sweat on jobsites and earn 20% more. welfare creates generational poverty and rob them of motivation to reach their potential. it is insidious and a tragedy
We have more important issues to solve than covering the earth in beton.
Just givecrhem a money printer and they become rich. No need to work. Everyone prints his own dollars. Milei said ir clearly couple of Years ago
You really picked the toughest jobs to learn in your example, OP.
As for the other comment about DC workers. I feel that's a oversimplifying things. If wages are so low that the difference between not doing anything and back breaking labor at a job site for 40+ hours a a week is 20% pay raise... thats not enough of a drive for people. Increase the pay for the job and people will do it. Oil field workers in texas live in remote areas and do work that will leave many with disability qualifying injuries because they can make 70k starting and 100k after like 3 years.
Yes, people don't wont to work, but people will work for the right price. I dont think forcing the lowest wage possible on people is good. As, walmart is the largest welfare recipient since they don't pay their employees enough to live so welfare isn't just for the unemployed.
I had a discussion with some friends who seemed to want to champion MMT. What they failed to recognize is that inflation is the real killer of MMT, and you can't print your way out of it. The latest round of money printing by the government, where they increased the money supply to the tune of 30%, led to approximately 20% cumulative inflation from the time they started printing the money. Not good at all.
Ask your friends, if you can take MMT to infinity, then why do we need to pay taxes? The government can simply print all the money it needs?
Circular argument. The taxation addresses the inflation.
Hello. Have your friends learn Quantitative Monetary Theory. MV=PY. What MMT is stating is that instead of issuing Treasuries to be purchased by various investors, the Fed can just buy all of them instead of the fraction they do now. This would create an increase in the money supply multiple times over. Once they recognize that and understand the Quantitative Monetary Theory, they will get it. That is unless they like hyperinflation. Assuming friends aren't morons though. Lol
@@imrangul6750 MMT argues that the value of a Fiat currency is derived from the acceptance of the currency in payment of taxes. Consider how long you think the USD would last if the IRS switched to only accepting Pesos. Taxes drive demand for a Fiat currency. They are essential to it's function.
The stance MMT takes is that because of this, it's okay to spend more USD in a given year than it collects in taxes, as people will save some for future tax payments or to buy things from someone who will have to pay taxes. And as the economy grows in size, ideally due to rapid growth but probably due to inflation, the amount expected to be collected in the future grows, and so more overspending can occur as more money will be saved.
@@scottcincinnatikid9804 No, what MMT is arguing is that when you increase M, you get a rise in P and/or Q. And that you should focus spending on sectors that raise Q. This is widely accepted in QMT, banks increase M1 and M2 by issuing loans, and the productivity of those loans increases Q enough to compensate.
But I agree they can't just liquidate all outstanding debt. I would say selling government debt will always be an important anti inflationary tool, in the same way the Fed pays interest on reserve balances. I would like to see public banking with the Fed, so that people can get the same interest rate on savings as commerical banks do. Or likely, lower rates to take more money out of the economy.
She's dishonest. She was telling us that inflation is the worry, and when it got here in 2021/2022 she told us that inflation was transitory. That's an ad hoc excuse because she knows inflation means there should be no more handouts. Having the reserve currency isn't a difference in kind, it's just a difference in the amount of time the U.S. Government has. Guess what happens when you print too much? Well, then you don't have the reserve currency anymore! No duh
Yup. Total inflation shill
The next scary "logical" step is in the last bit of this video, where the TedX'er talks about resource allocation. If we are dispensing with the need to pay for things in a free and accountable market, then an all-powerful communist government that centrally directs employment and use of resources is not far behind.
That is the core assumption, correct. A philosopher-king/central planner, is vastly wiser than the millions of people making individual economic decisions, even though we always see the opposite in practice.
She forgot to mention that we can always invade other countries if it doesnt work
You Russians?
@@Richest_Person_in_the_World You dumb?
@@Richest_Person_in_the_World You stupid? (Rhetorical question.)
😂😂😂😂
Deficit spending is a significant problem because it harbors corruption
3:28 - WHO does the Federal government owe $28 trillion dollars to again? Which bank is going to foreclose on them?
Bond holders, primarily. Foreign sovereigns, pension funds, individual investors, etc.
If they don't honour their debts, the US economy would be destroyed over night. Hence why over 1 trillion is now being funneled into debt servicing, away from schools, hospitals, infrastructure, etc.
Yeah, so the debt load is pretty devastating right now. (To consider how bad it is, the US Federal government only collects 4.5 trillion in taxes. In other words, about 25% of all tax dollars are sent elsewhere, instead of being used productively. And it's rapidly getting even worse.)
Thanks for asking.
@@willnitschkeYou are so clueless lol Supposing 28T is owed to bondholders and another 28 is needed for hospitals. What's to stop Jerome Powell from just printing 56 trillion. So there is no Crowding Out as you claimed
The number (32 trillion actually) is already in the accounts. It's just a scoreboard for how many dollars exist worldwide
@@Richest_Person_in_the_World *You are so clueless lol*
No I'm not, you're the idiot in this exchange.
*Supposing 28T is owed to bondholders and another 28 is needed for hospitals. What's to stop Jerome Powell from just printing 56 trillion.*
Hyper inflation would result, assuming the 56 trillion was pumped into the economy, Professor Sh*t For Brains.
China already pushed back on accepting new US debt, German bonds pay interest lower than the rate of inflation. Interest rates rose on our debt and if we don’t get our spending under control, our government can collapse. Inflation can run out of control and the flow of the economy can break. Retirees won’t be able to pay for medicine, housing, food…
Reality can foreclose the US.
That lady is insane. FREE MONEY YOOOOOOOO
Second that.
Insane or evil?
Insanely evil.
And we are supposed to believe your theory that money printing is only done by inserting gold coins into the printing press
@@charliesmash winning!
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless" -Thomas Jefferson
Fortunately, all inflation comes from the government, which will never allow deflation, so we dodged a bullet there.
In the discussion of full employment, do economists ever take into account the mismatch between the job vacancies employers want filled and the pool of workers who are qualified to perform those jobs? The Army only needs a few tens of thousands of recruits annually. However, 71% of youth do not qualify for military service because of obesity, drugs, physical and mental health problems, misconduct, and aptitude. Given the casual effort of our public education systems, there are probably no categories of employment where corresponding labor resources are readily available.
Right. You don't go from fast-food worker to architect overnight!
@@macsnafu I mean in cuba they train doctors by the tens or hundreds of thousands but sure you can't do if if you want to keep doctors in short supply and medical cost so expensive that it is the leading cause of personal bankruptcy . Not a person in this comment section understand money or economics and that's how you get to the point where you claim not teaching and educating people who can't afford it will lead to a shortage of relevant skills and pretend that's not just a funny commentry on capitalist extraction.
Which is when gov't properly funds one of a dozen job skills training programs that have existed literally for decades. MMT is how it all actually works, and when properly executed, IS how you run the "carburetor" of gov't spending and taxation in a fiat currency to optimize a society.
She's an economist?!?
I went out on the car lot....
There's six cars out there. But when I stand on my head? I can clearly see that now there's STILL 6 Cars there! But they're upside down now.
6 represents something. Turn a 6 upside down, and it's still a Fricken 6.
But she's actually stumbled upon something... Just like so many other areas of daily existence... We've disconnected practice and theory from reality. And it's no wonder that so many people are now starting to say, "I don't trust the experts anymore!" When experts like this spout nonsense.
Sadly this has led to legitimate Science and technology and mathematics being called into question... Because experts have sold out 'Truth' to the highest bidder for so Long that the masses, who recognized their own limited understanding started to realize that their intuitive sense of what is, wasn't lining up with the experts anymore
Maths is a social construct, bro. 😂
The main problem that is not addressed is the fact that managing inflation of a massive system is like trying to dock the Seawise Giant while she’s at full speed! That level of accuracy and control is not easy to attain in a moving economy!!! 😅
Which is why there should be no attempt to 'manage' it, because it can't be done anyway. The free market should price the cost of money. The only reason why the free market is hindered from doing that most of the time, is because half wits control the printing press and introduce distortions all the time.
@@willnitschke But the problem with the free market is it creates excess inequality; which leads to revolutions. How do you suppose the free market can create a stable society under modern expectations of the Democratic population?
@@RadicalModeration The free market doesn't do that, your government does. 😅
Here is an example, the Fed engages in QE. This is a massive asset purchasing program, which causes the price of assets to rise. Who owns most of the assets? Rich people, of course. So the rich get richer. But all in the name of helping the middle class, of course. 😉
*How do you suppose the free market can create a stable society under modern expectations of the Democratic population?*
By having more of it, and less government 'help'.
BTW, I don't see what you follow-on comment (assertion) has to do with your original point about how the government has a hard time managing inflation. It's of course understandable that it would, as it's the primary producer of inflation to begin with.
@@willnitschke I'm saying that your free market solution is not a real solution as it solves one problem while creating another.
I wonder where the data came from to correlate deficit to the surplus. How do we know there wouldn't still be a surplus without the deficit? Considering the government is very inefficient, her graph pretends its a 1:1 correlation. Did she factor in the surplus there would of been if there wasn't inflation from deficits from increasing the money supply?
Wouldn't it occur to the MMT proponents that, if they "only" have to monitor inflation, at the very least, the debt and deficit are metrics you'd use as early indicators of when you're about to enter inflationary levels of spending? IOW, even if you try look at it from their perverse perspective, the debt and deficit should still be very meaningful (and very distressing at current levels).
Then why is FAMA saying their broke an can't help hurricane victims? The GOV. has a blank check then Wright a fat one for all those folks who lost loved ones, homes, their way of life! THEY NEED HELP, AMERICANS NEED HELP NOW!
Because that district doesn't vote Dem.
Politics. They want to get rid of "maga" voters and replace them... especially in swing states... also giving the new imported voters lots of stuff to entice them to be loyal to the party that promises them plenty of benefits.
@@willnitschkeHow are you coping with the Final End of russian power coming November 5?
@@mindlightwaveAs they should. MAGA is KGB treason
@@Richest_Person_in_the_World Why do you keep babbling irrelevant sh*t at me nitwit?
Why does MMT arguments seem to be like accounting tricks? Why does it seem to be some sort of misdirection and sleight of hand?
So, let's imagine YOU are the US Gov't, and you print $100 to buy toilet paper for your bathrooms from me. Do I NOT have the $100 and didn't you spending that money help employ some toilet paper factory workers, paper recyclers, truckers, etc.?
where is the "accounting trick" in that?
When you "take" money from somewhere, doesn't it BY DEFINITION have to "go somewhere"?
These people don't know what they're talking about. Don't watch this video
It hurts when your religion is destroyed, doesn't it?
She needs to see the economic history of argentina
Modern monetary theory is just printing money Weimar style. Change my mind.
Did you know women could vote in the Weimar Republic? Just saying.
Weimar created problems create Weimar solutions
German inflation was tamed since then, so it's not a bogeyman
It's more like Zimbabwe money printing.
And transgenderism was rapidly on the rise, along with most other "diverse" viewpoints
If a government can ‘never run out of money’ then does that mean the government has an infinite amount of money to spend on what it wants?
Of dollars yes. But it would be unwise to offer higher and higher prices every year
A government could in theory buy everything. Society may collapse around it, but the government, if backed by a sufficiently capable military, would not. What's not to like?
@@delusion2987 if inflation begins to exponentially rise then would you curb that with fiscal policy?
@@kayedal-haddad Given that the government caused the inflation, it can also stop it at any time. As we saw recently, in Argentina.
yeah but the citizens will suffer, Weimar
Just print the money to pay is silly. If it does not come with consequences, why not just give everyone $1bn each and no one will be poor? Why $1bn, why not $2bn? Of course argument is inflation. Then the question is, what kind of spending will cause uncontrollable inflation? It is very hard to tame inflation as it is, and we do not know of any effective surgical policies that will keep inflation low and yet allow vast deficit spending.
So, just couldn't be bothered to pay attention at all and hear that you NEVER, EVER trigger inflation? Homeschooled?
Yes, an industrious counterfeiter will never run out of money. But a big enough counterfeiting operation can lower the value of everyone else's money to finance itself. Even if it's spending its funny money on roads and bridges, it is impoverishing citizens by reducing the value of their holdings in money. Am I missing something? If printing money is harmless, why shouldn't everyone do it?
She is saying benefits (more roads, …) outweigh the costs (inflation), not that it is harmless.
Make more money then
The trick is that "the private sector" includes the entire economy minus the government. So of course all government spending goes to the private sector, because that's the only other party to trade in this simplified model. Nevermind the massive wealth transfer from the average person to weapons manufacturers, bankers, government contractors, bureaucrats, politicians' private stock portfolios, welfare recipients, etc. That's all technically part of "the private sector."
@@theBear89451 Yeah except that we spend so much on fomenting and/or prolonging wars that the benefits don't outweigh the costs.
It’s silly to say, “we can’t afford it”. If it needs to be done, and it has a higher priority than something else, money can be printed to finance it.
MMT is the "Chase Check Glitch" of the elites
Our current "economic theory" is dangerous as well...
Because you say so?
Stephanie Kelton said "Just as a 6 becomes a 9 when looked at from a different angle..." THAT is the crux of the problem of MMT. A 6 NEVER becomes a 9, no matter which angle you look at it from.
She's just trying an even simpler version of: "Someone's deficit is someone's surplus"
Even Jimmy Hendrix wrote a song about it!
@@Richest_Person_in_the_World Except that's even dumber than the 6 is 9 claim. 😂
@@willnitschke "She's just trying an even simpler version of: "Someone's deficit is someone's surplus"
"Except that's even dumber than the 6 is 9 claim. 😂"
so, YOU be the US Gov't and PRINT $100 and buy a truckload of toilet paper to put in your bathrooms from me. Don't I HAVE THE $100?
It's not rocket science....
@@brianmi40 Yes it's not rocket science, yet it still confuses people like you, doesn't it? An expense is not an asset, genius. 😅
Oh and whoever supplied the toilet paper didn't get $100. He got his margin, which was maybe $5. Because he has to pay someone for the materials and labour, which let's say was imported from China. So now the government has a $100 debt and the local supplier has a $5 profit.
printing money goes back to Rome if not further... they knew back than too.
They knew then, but it's been forgotten.
@@Richest_Person_in_the_World The Roman Empire collapsed, Professor Sh*t For Brains.
I don't need a budget. I have a printing press in the cellar.
Except when the red ink gets put, not into black ink, but cronies, war and losing enterprise (eg Solyndra,etc).
She’s making a grandiose assumption that “government” makes perfect, unbiased decisions. History and current experience suggest otherwise. Especially the more removed spending is from accountability.
Deficits means the government is diluding the population's spending power and most often also misallocating resources.
No, it means the government has issued more than it taxed. In other words, that you still have leftover dollars as a private citizen
@@Richest_Person_in_the_World No, it means what the above commenter explained. You're just a confused kid.
@@mankisito I believe you're conflating deficits and money creation, but in fairness Stephanie Kelton does as well. But Deficits don't mean a reduction in the populations spending power.
As to how much the government misallocates spending, that's dependent on your version of ideal is and should be taken in perspective of how much is poorly vs well allocated.
@@neolithictransitrevolution427 The treasuries created (deficit) are largely bought with money created by the FED. China bought a trillion of US treasuries, Japan a trillion, Europe let's say 2 trillion, all other nations 2 trillion and individuals at most 5 trillion. If my estimates are correct then 20 trillion was bought by the FED with money they "printed" out of nothing. So deficits do equate to money creation.
@@neolithictransitrevolution427 *But Deficits don't mean a reduction in the populations spending power.*
It does actually, as seen by the correlation in all heavily indebted advanced economies relative to the decline in GDP growth.
*As to how much the government misallocates spending, that's dependent on your version of ideal is and should be taken in perspective of how much is poorly vs well allocated.*
In economics an asset is defined as something that adds productive value to the economy. I.e., adds goods or services to output. Given that the big three: entitlements, the military, and debt servicing, do not meet the criteria of asset creation, then the vast bulk of government expenditures are now 'misallocations.'
These are the people who scare me because they are the ones most likely to seek control over our lives.
This TED talk lady is clearly insane.
Do tell: who EXACTLY does the USA have to "borrow money from" in order to turn on their PRINTING PRESSES? Be specific.
@ shouldn’t be printing money at all.
@@thadoc5186 How would the USA collect taxes without US Currency?
Didn't think it through, did you?
@ What’s that got to do with MMT?
@ What's "what" got to do with MMT? Printing money? Did you watch the video at all?
How does that lady even have a job spewing so much nonsense.
To all the viewers of this video:
The analysis shown here is INCORRECT. Though Modern Money Theory has its limitations, (mainly that it is centered on the United States), the description it has developed on how the monetary and financial systems actually work is spot on. The statement, “there is nothing special about the US government,” is incorrect. The US government creates the money that it spends and that is “a game changer.” Every time the government goes into deficit, it creates fiat money. This is a good thing because that money enters the economy, but it does not represent debt for the private sector. What Kelton is saying in the video is correct: the deficit of the government is the surplus of the private sector. Back in the 70s, English economist Wynne Godley developed the “Sectoral Balances Framework” and reached the same conclusion. If the government runs a balanced budget or runs surpluses it does not create fiat money. This means that the private sector will only have access to credit money (the money created by banks). But this means that the private sector must go into debt. High levels of private debt were the main reason behind the “Great Depression” and the “Great Recession.”
Now, the economist on this video says “how is the government going to pay us back (those $28 trillion)”? The government does not have to pay it back because paying it back means that the treasury bills in the hands of banks, homes and corporations would disappear. Those treasury bills represent a very safe financial asset for the private sector. If that debt is paid back, the government will be in surplus, but the private sector will be in deficit.
Two final things: i) public debt is not the problem, private debt IS the problem; ii) US citizens should not focus on the deficit, they should focus on how public money is spent. It should only be spent on productive projects.
*the description it has developed on how the monetary and financial systems actually work is spot on.*
The MMT description is childishly idiotic and hardly "spot on", even if some anonymous twit makes such an assertion.
*The US government creates the money that it spends and that is a game changer.*
While some governments can print money, the US government cannot. You can't even get the really basic stuff right.
*Every time the government goes into deficit, it creates fiat money.*
No it doesn't. If I buy a government treasury I am handing over existing money from my bank account, nitwit.
*What Kelton is saying in the video is correct: the deficit of the government is the surplus of the private sector.*
No it isn't in most cases. This is to confuse assets with expenses.
Everything in your comment was basically confused nonsense, sorry.
@willnitschke Why the insult? Can't you have a conversation like a normal person? The government spends by creating money. It destroys that money when it taxes. If a government spends more than it taxes, fiat money has been created. That is money in the bank accounts of the private sector. By law, bonds have to be issued equal to the deficit. A safe financial asset has been created for households, banks, firms. That's the way the monetary system works, whether you like it or not.
@@carlosenriquecalderon7409 Sorry, I made a mistake. I wrote that there was _almost_ nothing correct in your comment. I read your comment again. There is nothing you wrote that was actually correct.
@willnitschke Yeah... that's the most appropriate response when you don't have the slightest idea on how to refute an argument...
Best reply so far.
We are being colonized by Global corporations who only think about maximizing profits. We will be taxed into poverty to pay for the
infrastructure and services for these millions of new consumers. They will get UBi to buy clothes and iPhones. We pay for the healthcare and daycare of the low wage employees of Costco and McDonalds. We subsidize the profits of Global corporations. The goal is to make us all poor through inflation so that we have to sell our homes at a discount. Then we will own nothing.
We will have no economic leverage against
Global corporations who own Western governments. We will all be ens/aved. Mass immigration is the path to neo-feudalism. When we live from paycheck to paycheck, we have no way to resists against corporations sending our kids to fight their imperial wars.
Corporations are people my friend
Yet half the economy is small businesses...
Debt is Wealth. Slavery is Freedom. War is Peace.
Some Orwellian dystopian shizzle.
Just hearing this lady speak is anger-inducing. Nobody who is well educated can pretend stupidity or ignorance, what she's saying is just abject evil.
Is there a limiting principle? Ask yourself: Would it then be fine to run $100 trillion deficit every year? How about a quadrillion? If it really is a perpetual motion machine, it’s all benefit at no cost.
If they are so okay with deficits with no limit, why owe any taxes that offset the deficits?
Not a perpertual motion machine, but more moneyprinting is needed
@@AB-qt4djBecause if taxes stopped being collected, the dollar would go to zero. "That is not true!" you exclaim, while pretending to hate the dollar.
@@Richest_Person_in_the_World Except it wouldn't. That's just brainless MMT theology.
@@VeniVidiVid no one is arguing there are no limits. Banks borrow and use that to leverage investments, and increase the money supply while doing so by making loans. But because they make productive investments, this is not inflationary.
The point is only that the government can create money to make an investment or fund a program, and the economic growth will expand the tax base enough to collect the created money. That doesn't mean there is an infinite number of productive spending activities. It doesn't mean that the returns will fully cover the program. It just means that if economic activity and the tax base expand because of the spending, the increased demand for dollars can balance out the money creation. Again, as banks do when making loans.
The dialogue around MMT is mainly to push the idea that we should focus more on the productivity of our spending programs rather than looking at the deficit or surplus in a tax and spending plan.
She already lost me right at the beginning, a six is still a six and a nine remains a nine no matter what angle you look at it. Just because you look at a six upside down, does not make it a nine, that is not how maths works, it the same way that having a 80085 on your calculator does not suddenly give you boobs. A trick of the mind does not suddenly represent reality.
Try is with actual real things, try looking at 6 cows at a different angle and see if you magically get 9, if you claim that people would call you crazy yet some people think MMT is sane.
The story is two people come on a number at the same time from different directions. Which person is right?
@@theBear89451 The person who actually spells out the right number, whatever the number is, a six CAN NOT be a 9 at the same time, that is a contradiction. It can either be a 6 or a 9, not matter what angle you look at it from, but not both.
The angle you view it from is completely irrelevant to whether a 6 is a 6 or a 9
If one is stating otherwise, they are at best performing voodo or at worst they are grifting, but they are NOT speaking truth.
If type a 6 on your laptop, and then turn the display around so it now looks like a 9, does that make it a 9? Of course not, its still a 6, you just have the display upside down. The computer will still interpret it as a 6, if you ad 1 to it you will get 7 and NOT 11 !!!
And the truth is, MMT is BS! They are just Grifters trying to confuse people with a economic sleight of hand (i.e. they are pretending that a 6 is a upside down 9, when it never was), its just designed to confuse people.
Abraham Lincoln once posed the question: 'If you call a dog's tail a leg, how many legs does it have? ' and then answered his own query: 'Four, because calling a tail a leg doesn't make it one,'
lolwut, teach me about the boob calculator trick
@@emperorpicard4901No, they are trying to explain a concept to people, but some are proving Dense
It’s tragic how stuck these three are in how they understand what the economy actually is. They’re in a mental Chinese finger trap!
keynesian economics is trash...approaching almost 100 years of this bs.
And yet there has been no Muh Hyperinflation as you crowd predicted
Yes, and it's destroying western civilization
Even her analogy was stupid. A 6 doesn't become a 9 in an accounting ledger. It was a 6, you just read it wrong.
But you got to love how MMTers tell you that MMT is just double-entry bookkeeping, then go on to demonstrate they have no understanding of how a ledger actually works.
It's simply an invitation to see the debt as someone's asset. Not a claim that 6 equals 9 in math
@@Richest_Person_in_the_World Keep trying to defend all the stupid things MMT proponents say, bro. Given how stupid you are yourself, can't see that working, though.
How to become Argentina in a few easy steps.
6 vs 9 might be the most ridiculous argument I’ve ever heard.
She was trying to dumb it down after 10 years of not getting your eureka moment
@@Richest_Person_in_the_World Actually she was trying to dumb it up.
Stephanie Kelton's explanation of how government spending could be inflationary was wrong. Inflation is caused by devaluing the currency, which is done by printing more money. Or, as Milton Friedman put it, inflation is caused by too much money chasing too few goods. How do we get 'too much money'? By government spending that is unconstrained by society's inability to lend or be taxed to cover that spending.
So, why do you want the government to furnish you with a Sound Money. Isn't that similar to everyone else wanting a government subsidy
The idea that spending results in a symmetrical value in the real world is an outrageous assumption. It is always possible to waste resources on useless projects-and all while devaluing the currency for everyone. Who is to say that Government won't squander its resources? Government is always insulated from free market accountability ordinarily ensuring that it will be the least efficient way of accomplishing anything-if it accomplishes anything at all.
It's simply that the dollars spent by gov end up in your account
@@Richest_Person_in_the_World If government debt is equivalent to income producing private assets, why does government debt constantly rise in proportion to GDP? Why aren't they in equilibrium as MMT asserts?
@@willnitschkeBy private assets, we mean nothing but Dollars. We count them as a financial asset. Just as you would reject someone's claim of being poor if he had $1 trillion in the bank. You would insist: "That is plenty of assets you've got, 1 trillion dollars." So Kelton is explaining that dollars handed out by government are Assets to the public. Specifically to those within the public that received them.
@@Richest_Person_in_the_World Professor Sh*t For Brains, currency units are used to price assets, they are not assets in themselves. If they were, the Venezuelan government could just "print" a quadzillion Bolivars and everyone in the country would be an instant billionare....
Half your comments assert that currency units are assets and the other half deny that they are.
You're an imbecille mate.
Where does he think the $100 dollars came from for the robber to steal? Somebody had to print it didn't they? If the Gov didn't print money, he wouldn't have his $100 in the first place.
Zimbabwe and Venezuela can never run out of money either, correct? Since they issue fiat currencies. So why are they not prosperous?
MMT "thinkers" like to pretend these places don't exist.
MMT does not whatsoever say that printing money creates new real wealth
@@Richest_Person_in_the_World Of course it does, Professor Sh*t For Brains. That's EXACTLY your claim you've made in the comments sections dozens if not hundreds of times.
The thing about nonsensical ideology, is the nitwit will tell you what it isn't, but will never do the opposite, because it obviously makes no sense.
@@willnitschkeMMT says that moneyprinting creates Nominal Savings not real wealth. That is where you get stuck with your Room Temp IQ (in centigrade at that)
@@Richest_Person_in_the_World Savings are form of wealth, Professor Sh*t For Brains. Thanks for blowing yourself up. Again.
Definitely a serious argument out there that it was still transitory, just lasted longer than they thought. In other words, it was supply issues, more than too much cash, that drove inflation, and it took time to get all those fixed.
I have viewed many of Murphy's criticisms of MMT. They are all presented in a manner that one would believe that we are still under the Gold Standard. He offers no good explanations because he reverts right to that era, where Fiat currency did not exist and we still had commodity backed money which is no longer true. He can't seem to accept the fact that our currency has value because our government mandates it and that is good enough for almost all of us. Under our fiat system we have to accept this because nothing else has been proven to be better certainly not commodity backed money. If we were the only country with fiat money and the rest of the world still backed their currency with a commodity like gold, Murphy's argument might have more value. But the fact is that the rest of the world is on the same fiat system we use here. Listen to him and count the number of times he compares government finance to our personal finance or the finances of corporations. None of those arguments are legitimate under our current fiat system.
And he uses patently wrong examples. "Oh it's the same with my debit card when I buy spinach. If my account is empty, according to Mosler I can just take it." Facepalms galore
Your attempts at criticism are laughably ignorant, sorry. Murphy has written books on money mechanics. People like you wouldn't even get past chapter 1. 😂
@@Richest_Person_in_the_World The examples are not "wrong" because a confused child is too thick to understand them.
@@willnitschkeAnd his great mind has led him to... wait for it... Bitcoin 😅 Fool's gold as peter schiff says
@@Richest_Person_in_the_World More trolling and stupid comments from you, because let's face it, what else can a confused child do but sulk?
FOR ANYONE WITH A FUNCTIONING BRAIN, A 6 IS ALWAYS A SIX REGARDLESS OF HOW YOU LOOK AT IT
It's just a figure of speech, but it backfired. Y'all are literally coming back with "Wait, a 9 is not a 6."
@@Richest_Person_in_the_World It's not a "figure of speech". It's a perfect illustration of how idiotic your ideology actually is.
Whether the Austrian school approach, Keynesian, or MMT, all are more alike than different in that they all depend heavily n a strong economy and economic growth in order to maintain the desired level of public sector, and/or maintain fiscal balance. Think how long we’ve had with there existing this large and looming deficit, continually growing too. But have we collapsed? Have we, those future generations who were told will have to pay for this out of control spending had to? No, we keep experiencing tax breaks more than hikes. The US economy continues to be strong enough to pay on its debt, and the US dollar is still the world’s preferred default currency. Under the Austrian school, maintain a lean public sector, strictly financed by taxation and rely on supply side economics to foster as strong and booming economy as possible, knowing of the business cycle, thus lowering interest rates when the down turn starts to occur. Of course this doesn’t work like a charm, the central banks aren’t that precise in knowing when to change interest rates, and with no greater public sector this model allows for, social costs become so great they’re unbearable. With the Keynesian model, the fiscal deficit spending need go for objectives that either create great savings for private businesses, or foster additional new and sustained growth in the private sector, or both, known as the “multiplier effect,” which, increases the tax base which the government brings in to more than compensate for the deficit spending that occurred. With MMT, whether borrowing by issuing treasury bonds, or just creating additional money for fiscal spending, such has to go for additional expansion of the economy balanced by how much/many resources exist to do so and keep operational. Then again, the increased tax base this creates pulls back the surplus dollars out of circulation where it could cause inflation. But, inflation isn’t likely when this surplus is used to create additional wealth generating businesses in the economy, where the people working within it, creating the additional wealth will have need for more dollars. The only real reason more money needs to be created is when the population grows beyond what supply of money exists thus can’t accommodate the demand for it to conduct exchange. This, or the degree of static population grows in affluence and spends more, thus has need for more dollars to use, with that lifestyle change. Never forget, at its base purpose, money is simply an exchange tool for conducting trade that eliminates the need for directly having to barter.
*But [when we use MMT to print money], inflation isn’t likely when this surplus is used to create additional wealth generating businesses in the economy*
Except politicians are morons and they always spend the money on boondoggles for re-election purposes or to pay off the people who got them into power. So that's a fantasy, sorry.
I should also add that the consensus of economic research on government spending is that once it exceeds 100-120% of GDP, every dollar of stimulus offers a negative return over time. This is why we likely see a decline in rate of growth of GDP, with the consequence that debt as a proportion of GDP continues to grow. If your claim made the slightest bit of sense, we would see the opposite.
If you pun 6 and 9 together you get 69 and that still costs real money 🤑
We need to put the 99 percent into the 1 percent, as Ali G said
@@Richest_Person_in_the_World Well Ali G made a lot more sense than Mosler, anyway.
By Stephanie Kelton's logic, the government should tax its citizens above 100% of their income. My god how the money rolls in.
No, MMT argues we are grossly overtaxed
I tried to tell my bank that if they looked at things differently all the 6s in my account could be turned into 9s and I could spend them.
That didn't go over well.
I see her metaphor was not dumbed down enough
Peter Schiff is not a MMT advocate or did I hear him incorrectly?
Schiff 100% anti MMT.
They were saying Schiff was warning of the inflation that was coming and it wasn't transitory
Schiff's weird because he gets and doesn't get MMT at the same time. He for example ackowledges: "I need dollars to pay taxes."
Schiff definitely does not support MMT and doesn't acknowledge anything good about it. Is why lije many others who have staked out positions in the past and resist anything new that might be better.
@@tonysu8860Yeah he opposes it, but also Gets the part where USD is a tax credit. So it is actually bizarre that Schiff as a Dollar Hater actually thinks there "more to it" than what MMT says
So by the way, where did that $36T go?
In your pocket. It's the amount of money people hold added up
Weimar. Also Hungary after WWII etc.
Also Zimbabwe, and Venezuela, and Argentina pre-Milei.
"Jungary!" Wow just wow
I hope that was just your H key being close to the J key
Don't you think L. Randall Wray has thought of that, he is a Ph.D. in economics
@@Richest_Person_in_the_World Economics isn't a science, it is a finance scam. Great if you are on the right side of the grift ;-)
@@williambranch4283 Economics is the fundamental science, hoss. With it, you can buy and sell every physicist
$500.00 for half a shopping cart of food at Walmart in Canada. That's what going off the gold standard and fiat currency have done...
Color me skeptical. It would be $50 here in Europe
@@Richest_Person_in_the_World 🐎 🏒.. its just as bad there. Lying just makes it worse.
@@Richest_Person_in_the_World of course it would 🙄
@@aquious953This summer a cab driver charged me 120 or 130 euros which I felt was too steep, but he was like "No no it's normal." But then I went to the Carrefour supermarket and got some ice cream, fruit etc. and the tab was like 2 euros. It was then I knew he had robbed me blind. Anyway the supermarket bill was not 500 euros as you claimed and used taqiyyah.
@@Richest_Person_in_the_World *Color me skeptical. It would be $50 here in Europe*
That's because your mum does most of your shopping for you. You're just accounting for the cost of candy.
When the interest on the deficit is as much as the the yearly budget than things will go bad
No because they can simply print the interest. Typing $1 and 1T (meaning one trillion) is equal work
@@Richest_Person_in_the_World Which would cause inflation to explode and destroy the US. Thank you for your stupid comment, Professor Sh*t For Brains.
@@willnitschkeAnd yet inflation is muted this year, after you've gone gray announcing a hyperinflation. 😅
@@Richest_Person_in_the_World Professor Sh*t For Brains, that's like saying because the government stole 90% the money in your bank account, it's OK, because they're only stealing a smaller amount this year. 😅
well hell.. let me print out some hundreds at home.. why even pay taxes, if all we have to do is keep hitting Print on repeat..
That will not work, the original point of the exercise is to provision the government
@Richest_Person_in_the_World Wow, no downside, no concern for insurmountable debt, no chance for runaway inflation.
@@Whowhatwherewhen5Yeah there is no such thing as runaway inflation, it's a discreet phenomenon. It won't run, unless you constantly make your own move each time. And the move is to pay higher prices each year for the same thing.
@@Richest_Person_in_the_World Sh*5t for brains, these are the countries that recently experienced run-away inflation which you say doesn't exist -
- Germany (Weimar Republic)
- Zimbabwe
- Hungry
- Yugoslavia
- Venezuela
- Bolivia (1985)
- Argentina (1989-1990)
- Peru (1990)
- Greece (1944)
- China (1949)
@@willnitschkeAnd today Yugoslavian inflation is in the single digits. So professor doctor Mosler wins again
Recessions are part of the economic cycle, all you can do is make sure you're prepared and plan accordingly. I graduated into a recession (2009). My 1st job after college was aerial acrobat on cruise ships. Today I'm a VP at a global company, own 3 rental properties, invest in stocks and biz, built my own business, and have my net worth increase by $500k in the last 4 years.Read more
Let's face it... buying more stocks & index funds during stock market corrections and bear markets is scary. Which makes it really hard to do for most people like me. I have 260k i want to transfer into an s&p but it’s hard to bite the bullet and do it.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.Read more
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.Read more
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I actually subscribed for a few trading courses but it didn't help much, been getting suggestions to use a proper financial advisor, how did you go about touching base with your coach?
Modern Monetary Theory = Girl math meets economics
It's a bit more sinister than that, but you get the maths part of it correct.
Argentina comes to mind when governments overspend. It doesn’t work to spend recklessly. Inflation is the hole in her argument.
There is no inflation in the U.S. and you've been screaming about the sky falling for 15 years
How can there be no inflation? If you put ten dollars under your mattress in 1980 that ten dollars will not buy you the same goods and services in 2024. The sky falls for countries that print their way out of financial troubles. The US has inflation it’s just not 1000% and crippling society.
@@E2680-l5yThe government aims to have 2% inflation and in reality they have 3%. Big whoopty doo. Can't you make an additional 3% annually?
@@Richest_Person_in_the_World 3% after 50%+... Perhaps you don't understand how compounding works... the effective rate since 2020 is way higher. Just because it went up 50 and then only 3% more of that...
It’s not about what is happening today it is about what could be if governments are irresponsible. Thats the entire argument, she said governments should spend without concern for consequences. There are consequences and examples are countries like Argentina. This isn’t about getting an extra percent return in personal finance, that is narrow minded thinking. This is about policy and the impacts it has on society.
Any video of her debating or getting pushback/friction on her theories?
I would love to put her and Peter Schiff in a faceoff. She would get shredded.
Schiff realizes that USD is a tax credit, but hasn't put 2 and 2 together that that is where 100% of its value comes from
@@Richest_Person_in_the_World Unfortunately for you, Schiff understands that 2 + 2 doesn't equal 64 billion, unlike you.
@@johndelia9408 Not her, but Warren Mosler (arguably the founder of MMT) has a debate on RUclips against Bob Murphy. It's very good and a much better discussion around the merits and flaws.
The general public now accepts all other forms of taxation as legitimate means of operating government. I’m sure the general public will accept direct inflationary money printing as a legitimate government operation in the near future as well.
I don't know if MMT is correct or not but your guest Bob Murphy immediately discredits himself with his initial analogy of Google issuing bonds. One of the fundamental parts of MMT is that when the government issues bonds it issues bonds in its own currency. The government also controls the currency so it can also print money to cover its debts. By printing money the government could cause inflation. That's why there's an emphasis on controlling inflation in MMT. In MMT you control inflation by raising taxes and raising interest rates.
The closest comparison for a corporation is probably Google issuing more stock. Google controls its stock so it can always issue more stock, but by issuing that stock it devalues the stock of the existing stockholders.
So either your guest just doesn't know what he's talking about or he's being intentionally misleading. I find in a lot of these conversations about MMT, the people who are trying to discredit it don't really take it seriously enough to actually study it so they can refute it.
Yes I was surprised that Bob Murphy is this intellectually inept
*That's why there's an emphasis on controlling inflation in MMT. In MMT you control inflation by raising taxes and raising interest rates.*
No there isn't... So the "fix" for the inflation that has crushed poor people in the US in recent years was to raise their taxes? Do they even pay taxes?
Or is the fix to raise taxes on the productive segments of the economy and cause a depression?
MMT theology is completely moronic... 😅🤣😂
@@willnitschke we don't have an administration that is practicing MMT right now. So the poor and middle class are just suffering under the current system.
If you really want to understand MMT then I suggest you read Stephanie kelton's the deficit myth.
Like I mentioned before, I don't know if the theory holds up. I think there are a lot of questions around if the government would actually respond if inflation got out of control under MMT.
But what I see is a lot of lazy responses to why MMT wouldn't work. Especially with so much dissatisfaction with the current system.
@@klf9161 I've looked at. It's nonsense. I have better uses of my time. This stuff is ideology. I'd ask you to ask yourself, why are you taking seriously the incoherent writings of a self published crank (Mosler) and grifters like Stephanie Kelton who is primarily out there promoting this stuff to achieve power and prestige. Now Kelton is no fool, but she's been serially wrong about the economic consequences of her ideas. What's happened in 2021-24 essentially refutes her.
She was a Bernie sanders supporter. Nuff said
If the government can find all this money and it isn’t a problem why are the roads and infrastructure falling apart?
Lack of roadbuilders. Though color me skeptical that U.S. roads are bad
An MMT fruit-cake would reply, because the government hasn't printed enough dollars yet! 😅
Wow, so much strawmaning here, both in the interview as well as in the comments.
Wow so much arse pain from you. 😂
It's shocking. MMT is not that complicated, though it does uproot a lot of concepts we grew up with. Everyone first encountered paper currency at age 3
@@willnitschke good luck learning about anything worth learning from a TED talk video, much less from a commentary video. As a description of the current macroeconomic system we live in, MMT is spot on. Anyone who says otherwise is referring to a system that is a century old, like the guy in beard is, or just referring to a fantasy island economy.
Absolutely absurd. Does the budget balance itself too? This lady is pure propaganda being used to gaslight us.
If the budget was always balanced, you would own $0 right now
@Richest_Person_in_the_World How's that? Not even a vague explanation.
@@Whowhatwherewhen5Because that $1 would have no way to make it into circulation. It would have been taxed away to cover the deficit.
@@Richest_Person_in_the_World No you wouldn't, you're an idiot, mate.
@@Whowhatwherewhen5 The only reason you have Dollars in your pocket is, because someone else is willing to take a loan. (The central bank for high powered money, others for other money). If nobody is willing to take a loan, you wouldn't have any money.
None of these people understand MMT at all
They do, you don't. That's why you're confused.
If Modern Monetary Theory worked, Venezuela would be the richest country in the world. Didn't Zimbabwe try MMT under its dictator, Robert Mugabe? The result: history's greatest hyperinflation.
Nobody said printing money produced real wealth.
However that equation works backwards too: real wealth is not a constraint on printing dollars,
therefore stop saying stuff like "We've run out of dollars."
@@Richest_Person_in_the_World You're clearly unfamiliar with the use of semi-colons with adjunctive adverbs.
@@ngana8755Not sure what you mean, but you certainly dodged the point. If moneyprinting is disconnected from real wealth creation, that only proves the U.S. can pay its bills.
@@Richest_Person_in_the_World Your brain fart makes zero sense. 😂
There is so much straw manning in this conversation from Bob Murphy. You should really get Stephanie Kelton on. That would be a great episode. A remember watching a debate years ago between Bob Murphy and a MMT proponent and Bob Murphy lost badly. It's like his neural pathways are so hardwired to see the world in a certain way that he doesn't have the mental agility to entertain any other perspective. It just doesn't compute for him.
I remember when I came across MMT for the first time after I had been wrestling to make sense of quantitative easing after the 2008 financial crisis. Using an MMT lens suddenly everything makes sense once you properly understand it, and you can't understand it listening to a second hand critique. Of course MMT economists can be wrong. They can make misjudgements like anyone else. But they do have the right framework for understanding how modern money works and not having that understanding can lead to big mistakes in policy making.
Yup!
Yes but back then Dr. Murphy could be excused because MMT was new. Now 10 years later he just looks unintelligent
Totally agree, but with respect to this video and countless others on the internet. The world would be such a better place - and people better informed - if there was more healthy debate, rather than one side poo pooing the other and vice versa. So I vote for inviting Stephanie onto the show.
Hello. I have to say that you are making a big mistake if you think they the proponents of MMT have a good understanding of the framework of modern money. Refer to my comment made in main chat. In essence they ignore the second side of the creation on money on the banks' Balance Sheet. Thanks
@@scottcincinnatikid9804 Have answered on your main comment