One of the most important points in her thesis is the line item in the Federal budget dealing with "interest expenditures". It is simply a subsidy for bond holders and is of zero benefit to anyone else.
She’s absolutely right if you trust everyone in government to act in the peoples interest 100% of the time while having 0 accountability for irresponsible any spending habits…what could go wrong? Inflation benefits the people with money to invest.
Excellent insights! I resonate with your views completely! I am surprized why most economists haven't thought of these perspectives in so many decades?!!
"The Government is not like a household. A government is like a bank. And a government running a balanced budget is like a bank that simply lends back as much as it gets in repayments, therefore the money supply never grows and without that, you don't have a growing economy. It's one of two ways to create money, and if you don't let government create money by spending more than they take back in taxation (fiscal policy), you have to rely on the private banking system to create the money in the form of credit (monetary policy) and you therefore get private debt bubbles." ~ Prof. Steve Keen
Check your "money mechanics." The Federal Government does not issue currency. Banks, by the authority of the federal government, issue currency. But, either way it's legalized counterfeiting. It transfers resources from one individual to another.
There are many changes in law that are needed to create a more honest system of money creation. At the top of my list are the following: (a) End the power of the Federal Reserve System to issue Federal Reserve Notes as the nations' legal lender, shifting this power to the U.S. Treasury; (b) Amend that portion of the banking laws that allows banks to create new money by making loans. Banks lending should be limited to the cash the bank takes in as customer deposits, cash borrowed from others, or cash obtained by the sale of shares of stock or other assets; and (c) Encourage each state to establish a public bank modeled after the Bank of North Dakota.
That is Not a more honest system you have put forward. It is a more dishonest system that enables easier manipulation of the money creation. That is why the existing system although imperfect is in place . - To divide the power of the money creation minimizing the power of politicians from easier abuse of money creation.
@@Rob-fx2dw I can only recommend that you read the history behind the creation of the Federal Reserve System. Professor Carroll Quigley covered this territory thoroughly back in the 1960s. It was J.P. Morgan who did his best to make sure the banks remained in control of money creation. The measures I have proposed are designed to prevent the abuses you allude to. Of course, there will need to be specific controls on the U.S. Treasury's powers to create and spend money into circulation.
@@nthperson Perhaps you should look at the facts including the fact that people are driven by the need to and the desire to earn money to improve or keep up their lifestyle so they have conflicting interests. There is no super honest group of politicians who you want to place control of the money directly under .
Anyone (a person, a company, a government) can issue as much as they want of whatever IOU (bond or currency) it's just a matter of finding someone else willing to accept what you're issuing it's a big game of trust. Once Trust is lost, you can't force it back by printing some out of the blue.
A government can demand a tax in that currency that you distrust, and you must find a way to earn that currency or suffer the consequences. Make the discussion about the world reserve currency and you've added an additional layer of necessity. Want to see a train wreck in the making, look the euro and how it is turning importer nations (i.e. the u.s.) into ghettos. Be grateful that we have the ability to expand the monetary supply when so few hoard so much untaxed wealth, or we'd be greece within a decade.
So Jim lol might explain why some EU countries have done well and some have cratered. They are on the same currency. Can we admit that having a sovereign currency is a different circumstance? Who puts the number on your dollar bill? When you get two bills with the same number you know at least one is counterfeit. Try that with Bitcoin!!
@@c.k.roberts3221 1) EU countries that are largely exporters are doing well. Those that do less exporting generally are not. (Consider that though ALL states in the US use the same currency, their economies are markedly different in each state. Same currency different wealth, health outcomes, education, etc. How can that be?) 2) EU CB requires austerity (e.g. reduce employment, reduce government benefits) from EU countries that borrow Euros. The worse the economy the higher the borrowing interest rate. Vicious spiral downwards. That's why Greece left. if Greece had remained on the Drachma, they would have done better. Now they have their own currency. Borrowing isn't necessary. "Fiscal austerity or a euro exit is the alternative to accepting differentiated government bond yields within the Euro Area. If Greece remains in the euro while accepting higher bond yields, reflecting its high government deficit, then high interest rates would dampen demand, raise savings and slow the economy." en.wikipedia.org/wiki/Greek_withdrawal_from_the_eurozone
A great talk and, broadly speaking, correct, particularly in 'exorbitant privilege' America's case, but it should also be pointed out that all currencies can be (and historically have been) effectively devalued by the expedience of their venal issuers without the sufficiently productive, vibrant, rigorously taxable economic activity that ultimately serves to underwrite their value.
@@allroadsleadtobitcoin You are correct - MMters constantly misrepresent the situation by missing out the facts. Deficits means Treasury bonds must be sold to pay for the shortfall of taxes. Those bonds eventually mature and the taxpayers fund their payouts to whoever bought them be they locals or foreigners. Government do not fund the payouts becasue their income is either tax payments or more borrowing through the bond sales.
@@Rob-fx2dw Equally important, all of this borrowing exposes those who save to a continuous loss of purchasing power. Thanks to Federal Reserve policies that pull down interest rates on savings to below the rate of inflation, a large segment of the population has suffered heavy losses in income. Those with a cushion have moved their financial assets into equities, with the result that stock prices have climbed far above what earnings and dividends justifies.
She had better take a look at over 50 hyperinflations just in 20th century when the same economists and politicians thought that deficits do not matter.
Of course - just because Kelton is saying that MMT is an accurate description of how a Sovereign Fiat Currency works (depending a bit on which one), does not mean that knowing the Truth about money, suddenly means it is impossible to mis-manage a currency or use it to serve elites rather than society. BUT there is far, far less excuse for the economy serving the elites, when the question "How are we going to pay for it?" is revealed to be based on false pretences, and instead should be something like "How are we going to RESOURCE it?" and "Will the currency still be stable?" According to MMT description, Govt Spending ALWAYS still is limited by: (1) Inflation/Deflation. Obviously your proposal could be a problem here. Prof Stephanie Kelton says these two all the time (& prob did in the video). (2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes. (3) Employment & business issues. (4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us? MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible.
@@CheeseInc if Canada is the sole issuer of Canadian dollars, then the system is the same. Prof Kelton's presentation applies to any country that is a sovereign currency issuer.
If taxes don't fund the National Government, Why are we paying taxes? The Government will not run out of money? If our country is worth $1000 The Government can print $1000 in money. If they print $2000 then the dollar has only 50 of its previous dollar thereby devaluing the dollar and making us less able to buy things made outside the U.S.
Stephanie speaks about the U S A Presumably the same go`s for all Countries .so all Countries can print as much money as they like or does MMT only relate to the U S A .
Can loose value?? Are you for real? Look at the the value of dollar since 1913 or just since 1971 since going off the gold standard. Dollar lost already 99% of its value. There you go, just printing money.
She knows about inflation. MMT economists are very concerned with inflation but the point is that is the question to have. The question is about how will what we do impact inflation, and a big part of that is how do fiscal policies impact GDP. The real debate to have is whether or not something pays off. Imagine you're a business owner and are thinking about two different investments. One pays 1.5x your input over 10 years and the other pays only 0.5x but costs 1/10th the amount. As long as something creates a positive expected value you should do it. An individual or a business might be capital constrained, but a government never is. If things are sound investments i.e. they grow the economy by more than what they cost to create, we should always go for them. The fact that the economy got bigger means it paid for itself.
I think item 10 is kind of the answer in a nutshell to 'how will you pay for it'. All those workers, whether the guys who build the infrastructure or the people who build the machinery or the people who make the steel or mine the steel or who grow the food that all those people who are 'building' will eat.....will all pay taxes that will go back into the pot to continue the building and care for the people.
No, that's the opposite of what Kelton's saying. Tax revenue *never* funds any government spending. What it does is 1) drive adoption of the state currency, 2) release real resources from the private sector such that government spending on those resources does not excessively bid up prices, and 3) moderate aggregate demand by removing purchasing power from the non-government sector such that, in a similar fashion to point 2, resource prices can not be bit up excessively by the non-goverment.
It's definitely going to take a few more of these videos for me to catch on and begin to put these details together. But 'they' are going to have to come up with something because AI is going to force some kind of improvement or change to the current system as we all stare down the coming job losses that are forecasted in the future. Billions of starving people will have a thing or two to say about their situation.@@JGS2295
Number 7. Fiscal policy is a no-win situation. Conservatives and Right Wingers like to label themselves as fiscally responsible. But everytime they're in government debt and deficits go up while they continue with their budget cutbacks. However, as shown, when Bill Clinton balanced the budget and created surpluses, Democrats are blamed for balancing the books on the backs of the people. The same thing happened in Canada when the Liberal government under Chretien and Martin achieved surplus budgets. The Conservatives blamed them for putting the burden on ordinary Canadians. So we've got to move on to something else, that works.
Indeed, we do need to move on to something else that works, but how many citizens in the US or Canada or UK or Australia, for example, actually understand monetary operations or MMT? How many understand that the federal government spends first, taxes second and cannot run out of money, they don't have to raise taxes to fund programs, but they should raise taxes on the super rich because that level of inequality is unhealthy. I thin a tiny fraction of those populations know it. Because if they DID know it they would go: "Why don't we have Universal Healthcare? (in the States) Why don't we have free college? Daycare for all who need it? Paid vacation, paid sick leave, parental leave and housing for all? Why not a federal jobs guarantee and a UBI and a robust transformation towards renewable energy and climate change mitigation? Those are all essential for human health and basic decency, would quickly eliminate poverty, food insecurity and homelessness, it would be enormously better for society. Why isn't that funded!?" The answer would be, they can fund it, we should expect it, but those governments are full of puppet politicians who rather lie by omission to the public than tell them the truth and improve their society rapidly. And they are influenced by big corporations and media to keep their mouths shut on monetary operations so the people don't rise up and demand human rights policies.
Well yes - any of they with a Soveign Fiat Currency - Australia, UK, Japan, but NOT EU countries. Currency isn't created/spent or deleted/taxed by printing & burning notes. They are only numbers in accounts on computers, in software.
According to MMT description, Govt Spending not limited by funding (how can you run out of digits to put into an account, if you are solely in charge of that??) Rather, it is still and ALWAYS still is limited by: (1) Inflation/Deflation. Obviously your proposal could be a problem here. Prof Stephanie Kelton says these two all the time (& prob did in the video). (2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes. (3) Employment & business issues. (4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us? MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible.
Of Course but you would have to be a self deluded fool to think it would all turn out good. - Just look at which countries kept their government spending far higher than taxes and see how their money system collapsed and heavily damaged ruined their economies .
Minimum wage act enforced correctly locally is relief for inflation and creates transitory inflation if established. The minimum wage linked to local housing cost and cost of living as written not a transient wage. This has not been required by business.
In terms of physical resources though- we are running out, aren't we? So is the current system a pyramid scheme where a vanishingly small minority makes the majority of the financial wealth to have access to the 'best' goods in a dwindling resource planet? And does that explain why the richest are in a space race?
It's hard to know exactly how many physical natural resources we actually have. Since there are so many big, private corporations who control a lot of the industries that use natural resources like wood, iron ore, lithium, and of course the dirty resources like oil, coal, natural gas - that data is largely kept private so we, the public, don't know exactly how much is left. However, I did just find a report about sand, as it is one of the most used resources - often for construction - it is definitely running out. Just by logic, almost all buildings are built with some part of sand and concrete, and so much development is occurring, it's going to run out if we don't make better systems to manage resources more efficiently and optimally. Yes, the system now is basically a pyramid scheme, oligarchy where the rich own and control most of the resources and the influence in their governments policies, while the majority of the citizens are in the dark as to how modern money operations works and what policies they could demand to help. Unfortunately, people get scared when politicians say "We can't afford that! We will be billions in debt and your children will pay for it! And that's a waste of your taxpayer dollars!" All those are lies, at the federal level. It is NOT your taxpayer dollars paying for federal government programs or funding. I do believe much of the super rich are aware that the system of capitalism is unjust and unsustainable and they are looking to 'escape' essentially with their rockets and, while on Earth, gated communities and private islands. They are cowards not willing to use their platform to inform the people how modern money works. It's kind of disgusting really. Elon Musk and other billionaires have publicly stated that they do think something like a Universal Basic Income will be necessary, due largely to technological unemployment, but Musk won't then also use that platform to say to the people: "And your federal government could enact that policy right now, fully pay for it, and it will not mean your taxes have to go up to pay for it, the debt and deficit do not matter, the government will not run out of money, they spend first, tax second and I should also be taxed a lot higher because billionaires should not exist." Haha, he never said that and never would.
We've been on a decline towards serfdom since they killed the unions in the 70-80s. Many Americans have already fully transitioned into serfdom. They are called gig workers now though.
The way I see it, when the government borrows via issuing bonds, it is moving money that has been swilling around the financial sector and putting it in the goods and services economy through its spending decisions. If there is spare capacity in terms of people not working, unused business capacity or a bottomless pit of cheap goods available that can be imported from China, it won’t cause inflation. MMT turns this idea on its head and says that in the same scenario, what if the government instead created new money free of any interest obligations to bond holders and spent that - would it cause inflation? Logically no. I’ve even heard some economists describe bonds as near money - interestingly in 1930s Germany, the notorious MEFO bonds were used as a form of currency by big businesses involved in arms production to facilitate trade amongst themselves. You have to realise that the money a government receives for selling bonds has been created already, and was tied up in the financial sector to finance trades in shares and other financial instruments. It turns out that as money is not tied to a gold standard anymore, all of it has all been created out of thin at some point, mainly by private banks lending it into existence through their magic money tree. The trick for governments in all of this, is to not exceed economic capacity when it makes its spending decisions. In the opposite direction, governments sometimes create money to buy back bonds from the financial sector. This is known as quantitative easing. Did you know that this process creates inflation in the financial sector? But of course, nobody minds shares prices going up do they! Private banks have also been responsible for creating inflation in the housing sector through mortgage money creation (bank credit) - nobody minds that either, especially if they’re lucky enough to be property owners already.
No, the Chinese are reorienteering away from selling tonthe US, and toward selling to India and Russia. Why? Their currencies are perceived as having less pressure to print.
Often *federal government spending* can be very profitable for the majority of people who have not won the lottery... *Buy low:* Idle land, unemployed workers, vacant buildings, uninvested savings, hungry-apathetic children, unused machines *Sell high:* developed land, reskilled workers, affordable homes, capital gains, children with a future, utilized capacity *Timing:* When capitalists are fearful, banks won't lend, repeated company failures, no one is doing the necessary work, workers are forced to strike for better conditions, companies leave the country and close plants here.
Why are there only 6k views? This is some really good content. Short & detailed video that can be absorbed. Last i heard, you're Bernie Sanders' economic advisor for a second presidential campaign. Yet he won't speak your language on macroeconomics. Why? I don't get it.
There are only 6K views because any sane person understands that printing money devalues currency and puts a country onto the road to perdition - you have examples like Venezuela, Zimbabwe, WEimar republic. Printing unbacked money does not work.
@@the_real_economics so subsidiaries and socialism for the rich is fine. Is that what you're saying? We are not the same as those three countries and our economies are a lot different.
@@oaktownlaker No, you are just trying to put into my mouth something I did not say. Socialism for anybody is bad, let alone for the rich. Moreover, socialism only takes some elses money by force and redistributes it. But you need someone to actually create wealth in the first place, that is the capitalism, not socialism. But it is the government that allows this to happen (socialism for the rich). US economy is doomed, real wages doomed. In the old days, the worker with the lowest wage in the USA was quite well-off when he took his savings abroad. People used to migrate to the USA not because it was a welfare state, but because it was a hard-core capitalist country, where you could find job with real value, make money and take this money back to your home country, because dollar was something. Now this is not the case, you have devastated dollar value, trade deficits, government deficits, simply the US economy is in a disaster. I am from a former communist/socialistic country. I do not remember any Americans going to my country when we had socialism, but I remember a lot of people fleeing away to the USA, because the USA offered them better living standard. Even though they did not have college jobs, they still managed to make far a lot more money than in my country back them. Nowadays, I would never in the wildest dream trade away my country for the USA, I would be much worse off. I believe I acutally "live in America", not you. I feel sorry for anybody in the USA right now, because its economy is doomed.
@@the_real_economics Sigh. Those countries did not have monetary sovereignty. We do. Nixon took us off the gold standard in 1971, which was a godsend; after that we could grow as much as we needed, if we spent the money on fundamental goods and services, not $100 million bridges to nowhere. With MMT, inflation is the real worry, which can be controlled with taxes, if necessary; but Japan has huge debt and deficits, but low inflation. Japan, too, has money sovereignty. Please Dr. Kelton's "The Deficit Myth."
@@jimmuncy5636 Are you fokin serious, smoked or just stupid? The Deficit Myth? For Christ Sake. Even in the 20th century someone can believe an idiot like Kelton with her MMT nonsense.
Despite the claims of MMT economists who incidentally can't explain the mathematics of money lending the government does NOT 'issue' the currency or money. Most money in the economy is created by private banks when they lend and the remainder by the Reserve bank when it lends. That is the nature of how money is created and operates in the economies in what we call the modern world. It contrasts with the old gold standard that preceded it. Those two banks or government do NOT issue currency but merely lend it and it all has to be paid back like any loan because money in each economy today is purely fiat credit money created by a process of lending and borrowing. Government is by far the largest user of money in the economy. They spend more than any other institution or person.
Sorry, Rob. The correct way to say this is that currency issuance is borrowing. It says so on the dollars. They are Federal Reserve Notes--"note" is the legal term for IOU. The Fed owes its noteholders, not the other way around. What does the Fed owe those holding dollars (besides another dollar)? Answer: a dollar's worth of relief from an inevitable liability--taxes. Taxes make the money valuable. They do not fund federal programs.
The reality is taxes do nothing to create any value in the money. That is irrefutable because it proven by historical facts of money becoming worthless despite taxes. Taxes and worthless money together.
@@dempseys3 your argument is faulted because value is not added by creating more money which is a pure financial asset since financial assets are worthless without someone else holding a debt obligation. You should have learned that lesson in the GFC where certain financial assets lost their value due to their debtors failing to pay their liability.
I know these are just sound bites, but she never mentions value when speaking about surplus or deficit. The number of dollars is irrelevant unless you take into consideration how easy/difficult it is to obtain those dollars.
When we're talking about spending, we're talking about government (Federal) spending, not household budget spending. What's important is how difficult it is to SPEND those dollars. That's what she's talking about when she says that raw materials are our only real constraints. To the government, the supply of dollars is basically infinite.
@@the_real_economics Tell that to Congress, and the Fed. Each and every single time our country passes spending bills, that is new money created. In fact that is where all new money comes from. So you're not reducing spending power, you're increasing it. It is extremely important that you finally understand this.
No. Not correct. The only money that is burned or shredded is paper money (currency) that has reached the end of it's useful life because of wear. The reality is it is the designated money of countries today is all fiat credit money created in conjunction with an equivalent amount of debt. Most of the officially designated money today is in digital form - about 98%.
But what does it mean to buy something from another country if you print your own money? Like what happened in Germany in the 30's? Hyperinflation? I don't understand fully.
All of what is said my MS. Kelton does not apply to countries that do not issue their own currency (e.g., Greece) or that tie their currency to a commodity (e.g., gold) or have a fixed exchange rate vis another currency. In short, it only applies to monetary sovereigns who issue fiat currency.
Hyperinflation was due to war reparations. Read the history on this . Stephanie has covered it well. Zimbabwe hyperinflation, completely failure of agriculture products because land appropriation caused white farmers leaving and the black farmers didn’t have the skills, experience or technological know how to carry on farming. Read on this too.
MMT is socialism with a fresh coat of paint. Irony? Stephanie is one of the richest Economist from United States. According to our analysis, Wikipedia, Forbes & Business Insider, Stephanie Kelton's net worth $5 Million. (Last Update: January 13, 2024) Ms. Kelton has pockets loaded with capitalist dollars while she champions socialism for profit. Socialism is a political and economic system wherein property and resources are owned in common or by the state.
not sure what she is really saying...but it seems like she is saying the govt can throw shed loads of money out to the people, for infrastructure, and growth, and should keep doing this until it affects inflation....only when inflation begins to move does the govt need to start reigning this in....and that basically you can ignore all these defiicit and spending figures....teh only thing to focus on is inflation.
Well, I can still see a lot of poor despite money supply expansion. What we're doing is chrematistics instead of economics. I'd like to hear more about the latter.
Did you actually watch the video, and if so, how can you understand that to be about word games? She literally says that the common understanding of where money comes from is false, and State Currency Operations work very differently. Of economics: According to MMT description, Govt Spending not limited by funding (how can you run out of digits to put into an account, if you are solely in charge of that??) Rather, it is still and ALWAYS still is limited by: (1) Inflation/Deflation. Obviously your proposal could be a problem here. Prof Stephanie Kelton says these two all the time (& prob did in the video). (2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes. (3) Employment & business issues. (4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us? MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible. There are more things about how money works, but I don't want to write too much if it isn't welcome (esp to someone who doesn't have an open mind as well as discernment on an issue)
Adding more to the money supply, in general, doesn't address poverty, it's beating around the bush, not directly addressing the issue. If you really wanted to end poverty, desperation and give people a ground floor to stand on so they can contribute to society without the pressure and stress of a day-to-day struggle to exist, you could enact a federal program like Universal Basic Income that gives every adult $1 000 straight into their bank account. They can use it to get food and other things they need to be healthy. You could package that with Universal Healthcare (for the USA), a Housing for All program that includes social workers for those in need, Guaranteed daycare and free college, and a Federal Jobs Guarantee. If that happened, because the federal government funded those programs, as they totally can do, poverty could be eradicated in the US in months and the improvements to the health of society would be off the charts.
There are a shocking number of people commenting about this who clearly have no ability for independent thought and must have serious difficulty walking upright or finding their way home each night (probably get a taxi, I guess). There are two important things you need to know about Modern Monetary Theory. 1. It's not Modern. 2. It's not a Theory. What money actually is has been a problem since forever and in the 17th and 18th centuries a number of landmark efforts were made to build the kind of economic infrastructure that we have today but with varying success. Adam Smith crystalised many ideas about trade but he never really addressed what money is. Only in the 1880s was it thoroughly put down on paper, but extremely obscurely, and it took further work in 1913/4 to express it in terms that even those with a moulded-in capitalist mentality should be able to understand. After centuries of being dragged down by silver standards, gold standards and copper standards, a way was now defined to build economies worthy of humanities technical ingenuity. We know it wasn't the first time because Abraham Lincoln was an MMTer. Bretton-Wood still straight-jackets the economic thinking of the age even though it was dead half a century ago. Let it lie in its grave guys. What has been christened MMT is simply a description, not a theory. What Kelton describes is simply an opportunity to bring economic management into line with reality ALL THE TIME as opposed to only when there is a war.
From what you say it seems you also don't know the nature of money today. MMT is just rubbish based on false observations and an is almost childish belief. The economists who support rt this idea make claims that are blatantly false and contradict the correct explanations of the institutions (Reserve Banks) that actually create the new money lent to government to pay their deficits and the private banks who create most of the new money in the economy.
@@jimf671 You are a typical MMT follower. - Trying to silence others to stop them from presenting facts that show your beliefs to be false and misleading.
Recently Kelton has been putting up more videos with no comments allowed. Why - because the MMT economics does even Not stand up to scrutiny from members of the public and others who really have a better understanding of the situation and she can't address questions that are posed.
@@dannywindham3295 You are again a typical abusive MMTers who can't handle rational thinking and can't therefore determine between fallacies and facts.
@@DavidBreece MMT claims taxes do not fund government spending. Yet they can't explain why the historical facts of 200 years of history as shown in the Whiethouse records demonstrate that taxes fund almost all of government spending. See table 1.1 of www.whitehouse.gov/omb/historical-tables/ MMTers claim new money funds taxes but can't explain why the records of US budgets shows budget surpluses and that could not have happened if taxes did not fund government spending since a budget surplus is where taxes exceed government spending. MMTers claim taxes put value into money despite the fact that taxes put NO value at all into the money in economies where inflation led to the money being worthless.
@@thepolticalone961 ... but then and there you run into political obstacles: Increasing taxes is a huge enterprise in playing lobbyists against each other; so it takes much time; and reducing spending, often according to the same lobbyists, is also difficult. So while keeping inflation in check might be simple in theory, it is not, in practice - for reasons completely outside macro-economics. But this alone might make it not as useful as some believe.
Gov't just injected nearly a trillion dollars into the banking sector, they like to refer to it as QE. In reality they simply pressed a button and magicked the money into existence. I didn't notice the inflation, did you? As long as you have unused resources it isn't a problem, when you have competition for scarce resources it is. That's when you used taxation to remove the excess money (governments create money taxation destroys it). To begin to grasp the issue think spend and tax not tax and spend. Taxation does not fund public/federal expenditure. You don't have to be a pothead, just apply some critical thinking.
I do hope MMT stands up to scrutiny over time because conventional economic theory is totally incapable of dealing with the savage effects of covid-19 along with the need to address climate change.
No economic theory is capable of dealing with any crisis. Economics is based on made up theories and borrowed formulas about a perfectly imagined world of...economics. There is nothing scientific about economics. Astrology might be a better predictor of life's challenges as it at least is based on the science of astronomy and they know with precision where all the planets are from ages of scientific observation. The results of consulting an economist/financial adviser and consulting an astrologer are about equal.
What do you meant 'stands up to scrutiny over time'? It's a current fact and it is how monetary operations works in federal governments with currency sovereignty like USA, Canada, UK and Australia. Mosler (the originator of the publication on MMT) said himself that what he published in the early 1990s about 'soft money' or MMT hasn't had one word refuted. It's 100% accurate to say that the federal government spends first, taxes second, they cannot run out of money, cannot go broke, they don't have to raise taxes to fund any program, and the debt is not a problem that will burden future generations. That's how it works. Nobody can factually refute this. If they are politically charged or have corporate interests that conflict with people knowing about MMT, they might muddy the waters to say it isn't true or scare people to say inflation will skyrocket, but that's not refuting the facts of modern monetary operations. The KEY thing is, as I see it, is literally that not enough people even know about it. Most people went through all of their schooling never ONCE being taught how the monetary operations works. So, unless they've done their own research to find out about it, they are in the dark. But, once they come to the light, it could be a tremendously positive power of the people to have this knowledge because they could demand something for their vote. They could protest and build a movement that pressures elected officials and any hopeful elected officials to install human rights policies like Universal Basic Income, Universal Healthcare, Free College, Green New Deal and many others that are desperately needed if we hope to have any sort of livable future. The Establishment is counting on not enough citizens to know about MMT, know what they can demand for their vote from that knowledge and use it to crush capitalism out of existence and replace it with something sustainable and healthy.
@@h.m.muller9307 Recessions generally result in a general price deflation. This time around, the bail out of the financial sector and the steep reduction in mortgage interest rates allowed the nation's property markets to quickly jump back up to and then surpass the 2007 highs. The stage is set for a more severe crash in the not too distant future as the mountain of private debt climbs much faster than household incomes.
An MMT understanding could be used to serve Conservative Policy goals & stuff everyone likes to, as well e.g. lower taxes; funding Veterans; Charter Schools; cheaper healthcare; etc. MMT is only intended as an accurate description based on real state currency Operations. Common Sense proposals do flow from that though.
Rio that depends. If you have a fiat reserve currency, then yes. In real terms, this applies to the US, UK, Japan and the EU but the EU is in the grip of German inflation fears. The Japanese run deficits 200% of GDP with no inflation.
@tecnisparta Monetarily sovereign states only go bankrupt if they choose to go bankrupt, their sovereignty is violated, or for reasons tied to political instability (breach of "full faith and credit."). No amount of "debt," fearmongering, or economic miseducation will change that FACT.
at 3:00 i think she got a bit mixed up ....she means the govt borrowed money for the economy , and it sold bonds to get that money from large financial institutions.... the debt is the bonds that are held by financial institutions that have not yet been realised.... she says the govt spent the money in the economy ..which implies the money is gone...and then she goes on to state that the govt then traded the cash for bonds....how on earth they can do that, AFTER THEY HAVE SPENT THE MONEY BACK INTO THE ECONOMY ...gets me.. so it is like i said ...NOT LIKE SHE SAID. i am not sure she knows what she is talking about ...forget her title she got it wrong. THE WAY she says it, is like the govt actually bought bonds...as the govt is the issuer of bonds...who did the govt buy bonds from then.
She is factually incorrect, watch Merrill Jenkins on RUclips. It does matter who creates the wealth and exchanges it freely without fractional reserve banking.
I agree and there is in some countries no reserve requirement at all. Australia has had no reserve requirement for over 40 years.. . Additionally which ever was you look at it the reality is all fiat money and is purely financial asset which makes it worthless unless it is backed by debt held by someone. That someone is the private sector who in indebted with the amount of money created through the Federal reserve bank operations when they gain an asset being treasury securities. Those securities mature and the public taxes are taken to fund the payout.
"The government can't run out of money, in the same way, a carpenter can't run out of inches." I'm speechless :-D Why don't you just print 1millioen dollars for every American, and everyone would be happy?
Hello Stefan; That's a good question, but not an accurate reflection on what MMT or Kelton is saying (I'm quite familiar with both, for years). The short answer to your question "why not give everyone $1m" is because even though you are correct that the FUNDING $1m for everyone is easy & no problem to provide by the Govt; according to MMT description, Govt Spending ALWAYS still is limited by: (1) Inflation/Deflation. Obviously your proposal could be a problem here. Prof Stephanie Kelton says these two all the time (& prob did in the video). (2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes. (3) Employment & business issues. (4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us? MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible.
@@pebblepod30 Thank you for the reply. I'm on deep water here, as I'm not financially educated. ;-) But the statement "The government can't run out of money, in the same way, a carpenter can't run out of inches." I'm sorry, but that does not make any sense. I found Kelton on TED talk daily, and I was intrigued by what she said and also confused.
@@djgstefan Hello again stefan, thanks for your reply & focus on the topic. Now I see what you mean. How about if I explain it as "The government can't run out of money, in the same way, an Accountant can't run out of numbers to type."? Or the score-keeper of a baseball game, can't run out of numbers to keep score with? Does that make sense? Basically, the point is that the Fed just types numbers into the Govt account, that is literally how currency is created. (unless your talking about bank credit creation, which is not really delt with much in MMT, as i mentioned already & gave a link). In my country (Australia), the Central Bank Governor literally admitted this when questioned by a Senator in an inquiry.
@@djgstefan Did that makes sense? Maybe you still feel unsure or don't agree for whatever reason, no problem. Just wanted to clear it up. I care about this because I believe if the Public knows about money creation & deletion, it changes everything in a good way. The question becomes "Do we have the resources?" rather than "How can we pay for it?" And like Georgist Tax replacing Income Tax, I reckon it would have very broad support.
@@pebblepod30 Hi. I agree with that to some extent. 1 dollar can be called 1 trillion, or any other number. But, my problem with that, is that money has some agreed value internationally. So, some countries have gone bankrupt, and they have gone out of money. And of course, they can still print money, but, the money they print has no value. And for me, that is going out of money. I'm not native English, but, I hope you understand my point. Thanks
When government run bigger deficits the private sector gets a bill to pay for them because taxes are the only way that the debt created by the deficits are paid off when the Treasury securities (bonds) that were sold at the time of the deficit to fund it actually mature. All of the bonds mature in time as they historically have all done.
@@JGS2295 You and Kelton can't explain how a monetarily sovereign government works. The explanation MMt gives is not supported by the facts and Kelton cannot support it with her version the mathematics of the situation because MMT is rubbish that defies the reality of what happens. That is why she never appears in debates with others except for puppet presenters she selects herself and who don't ask relevant questions that test her logic. Take for instance her MMT belief that taxes create demand for and put value into the currency but the reality is taxes do not put any value into the currency which is proven by the fact that countries which suffered from massive inflation ended up with worthless money despite taxes. Can you explain that ? Of course not without denying the incorrect MMT claims about how money gets value and acceptance from taxes. I suppose you as believer in what it means to be a "monetarily sovereign government " you can explain why MMT's view is correct and why it contradicts the explanations of the institutions who actually create new money such as that of the Bank of Canada or bank of England or others whose information is on line for you to see. I doubt you can.
We are so indebted to prof Kelton for explaining this most important economic item of knowledge to the public as the fear mongering continue to create hysteria of debt financing. We have achieved good financial progress as a country and as a society. But politicians have created the hysteria for their idiotic followers! If China or the rest of the world is buying our government papers to finance our expenses. Excellent discussions. Regards
This is a dangerous academic proposal. The government has printed fiat currency for many decades, and I see no improvement. The fallacies of MMT include that government employees or elected bureaucrats know how to efficiently deploy capital. They do not. They are some of the most corrupt people on the planet. Only the marketplace with hundreds of millions of decision-makers effectively allocates capital. Another fallacy is that we rely on the confidence in the dollar as a stable value for trade (what happens when the world moves to other currencies or doesn't accept the dollar). The problem with inflation (too much money pursuing the same goods and services) was discussed and is a huge problem. Presently, the US economy is running at full employment. In theory, all government procurement programs would need to shut down for as long as full employment occurred during these periods. From an implementation perspective, it assumes that the government can buy what it needs domestically. However, a quick look at the trade deficit shows that's not the case. The argument for globalization and comparative advantages moved manufacturing offshore. What happens when foreign companies decide that US fiat dollars are worthless because you have changed policy to print wild amounts of currency? What happens if US citizens decide US fiat dollars are worthless and start using Bitcoin, precious metals, rare elements, or other currencies? This is another academic telling us to reimagine the world to achieve Utopia. These people are dangerous for presenting half-baked ideas. No, thank you, I have enough Wesson oil.
@@gmc5618 Currency Yes, another reason Germany stopped backing its Mark with Gold at the end of WWI that contributed to the Hyper inflation. Once again an outcome of League of Nations penalties.
Didn’t you listen? She didn’t say uncontrollably, some National debt is inevitable and it boosts the economy. In Canada when they had budget surplus, households and private firms suffered. Just think if the government turned off the water supply!
Should one exhaust one’s caloric resources to carry our money to market to do commerce (eg Germany post ww1 or ww2 disarmament)? Should we then eat the paper money for the requisite energy in order to consummate our now (lesser?increased?) funds? Frankly this sounds most like a toilet paper.
This lady terrifies me. I had an economics professor from UCI that use to sell this drivel. That one dollar taxed give out a 1.20 in benefits. Also just like Kelton, Prof Kaun was a big supporter of union mafia. Stephanie feels strongly about giving unions as much money as possible and making sure unions have the power pass laws to suit them and be the deciding factor in all elections. Run like hell from anybody who tells you that the best thing for America is to print money as fast as you can. Let the speed of the printers determine the money supply. This is the most deviant way to come to power. Convince people that democrats or republicans can be all things to all people. Ya that's realistic. That IS Stephanie massage that we can have everything we want, nobody has to work for it. And we can increase the defense budget a 100 times over.
Kelton fails to differentiate between the effects of gov't deficits financed by borrowing from private investors or foreign nations, and deficits financed by the central bank (our Fed Res bank) from new money created out of thin air in amounts out of proportion to the level of GDP. Th former effects are benign, the latter are simply a de facto tax on people's savings, by eroding the purchasing power of the previously issued money.
Government deficits cannot be "funded" from any entity other than the government spend. The bonds sold to investors of any stripe are essentially the same as a CD savings for the investor. The reason is that bonds are only purchased with US dollars; which were sourced, as all US Dollars are, from a federal spend.
@@bradsandler6256 Evidently you've never heard of the Federal Reserve Bank. Currently (the "stimulus" $) are ALL coming from the Fed. I'm guessing you are over your head in this.
@@bradsandler6256 What causes you to think I did not understand that the FEDERAL Res bank is not a gov't entity. Although the term is not exclusive, that's what "FEDERAL" means in this context, is it not?
If she’s right then no one should have to pay taxes since the government can just print more at no consequence apparently.... I’m shocked this woman has a degree.
No, because taxes are needed in this system to take some money out of the economy and to create demand for the currency for people to work. The simple analogy would be if I gave you 1 business card every time you did a task I wanted done like mow the grass or take out the garbage or build a planter box for gardening - well, in a month, you probably wouldn't do any of those things because there is no reason for you to work for them, those bookmarks don't mean anything. But if I then say, I need 10 of those business cards at the end of the month, if you don't have that then you can't watch TV, go out to eat at a restaurant or go fishing. Now, there is demand for that 'currency' and reason to work, you probably want to work up much more than 10 business cards so that next month you have more breathing room to pay the tax and still do the things you want to do. What she is getting at is that the federal government can fully fund programs for the greater good and human rights, like healthcare, education, housing and green energy transformations without running out of money, and your taxes don't go up to pay for those funds, that's after the spending happens taxes take some of that money back in.
@@lucsolberg8466 well, are you talking at the municipal level or the federal level? On the municipal level, it's different, the city does get much of their income from the tax base of the properties, businesses and residents and they might decide to raise taxes if they really want to fund a project like a new bridge. On the federal level it works differently because the federal government issues the currency to all. They are like The Bank in the game Monopoly, they give out the currency and they can never run out of it. On the federal level your taxes don't fund any projects, programs or policies, the taxes are subtracted from the economy at the end of the year. Fed spends first, taxes second. Let's say they give you $100, they put $100 in your account, then at the end of the year they tax 30% so they take $30 and you are left with $100. The tax didn't come from anywhere, it was just taken back from the funding you got originally. And taxes are there to create demand for the currency and for work, as well as try to mitigate huge income inequality (ideally).
@@coolioso808 I agree that these things work in the ideal scenarios, but these systems always end up being abused and cause more harm than good over time.
Intriguing... I just hit Like and saw that my Like was number six hundred and forty three. I remember that number is somehow important in Gematria.... Jewish though regarding symbolism in numbers?????
"It's simple, we pay for it the same way the CONGRESS paid for the $700-billion defense authorization program, congress VOTED that economic policy/funds into existence and WITHOUT raising a single dime in new federal taxes." ANSWER = DEFICIT SPENDING. HELLO?
But how did you come to the conclusion it is deficit spending? Where did you learnt that, ho do you know that is true? For me, it is only because that is what i read in newspapers, not because I learnt about State Currency operations (e.g. how the Fed works).
And if what we were told before is true, then why doesn't your Congress look for someone to borrow from or Tax before they decide on spending $3.5 trillion? That is so big, surely they would need to ask first? But they don't do they? Stephanie Kelton actually works in that field. They don't first spend a month begging China or the World Bank to loan them those US Dollars. And where does the imaginary lender get the US dollars from? If what you were taught is true, then why would they spend without checking with their supposed lenders if they had such ridiculous amounts of money? And where does the supposed lender get it from? So how do you know what you think you know about currency operations? I can answer that question too, I've thought & read about it, looking for evidence & logical explanations rather than ideology or unfounded assumptions.
Since Reagan presidency America makes rich great again. Costs of living like education, healfcare has been increasing fast. Salaries risen a little bit over inflation despide of growing productivity in economy. Most profits from rising productity are going to top percentile.
She makes many very simple assumptions about US debt and growth in private sector without taking into account the actual complexity of the overall financial situation. She makes good points about taxes being used to flatten income disparity, but then she wonder off into la-la land. She has a too simple model about cause and effect. I will continue to listen to what she has to say as she make some good point. She is not ready to advise all of us how to vote on economic issues.
There is enormous complexity behind this simple presentation. Look up Bill Mitchell, the Australia economist who co-developed MMT. He will give you all the complexity you need.
Indeed. This nonsense is so pervasive, that it's led to the crisis at hand. Even Keynes never envisioned a permanence in liberal fiscal policy. If all this nonsense was true, there would be a lot more pyramids on the planet.
But our money, since 1971 when Nixon took us off the gold standard, is fiat currency, numbers on a page or in a computer. We can always just put in the numbers. No money or gold will be printed or shipped over there. China can then purchase things with those computer numbers, probably buying things from us. It's just an accounting procedure; unlike our personal bank accounts, we can't print our own money and have it universally accepted. I know MMT is mind-blowing, but so was the Corpernican theory that the Earth moved around the Sun and not vice-versa. To understand it requires a paradigm shift. Even major economists don't get it, because they were taught otherwise. MMT is now, in places, being used by the U.S. and the U.K. It looks very promising. Read Dr. Kelton's "The Deficit Myth."
@@jimmuncy5636 ''China can then purchase things with those computer numbers, probably buying things from us.'' Like what? People in the USA barely even buy things made in the USA.
Kelton repeats one of the most absurd analogies in all of history at 7:35 in this video. It demonstrates the absurdity of judgment that MMTers display. You would have to be a complete goose head to believe it is any way representative of what happens in a contest or game. The analogy of the score keeper in a game and the Federal government in money creation. You just have to ask what part a scorekeeper plays in a ball game or any game?. Answer :- None at all in the playing of the game !! What part does the government play in the economy spending new money and taxing it - PLENTY -and more than any other company or person they spend new money first and then spend it again when it collects taxes and re spends it. The government is the first player in the economy game and the biggest. It's the biggest team playing in the whole economy. Not some mere recorder of results. But a score keeper is Not any way a player in a game and is purely a recorder after the fact when someone scores. Just as many people looking on in the spectator stands are recorders but play no part in the game.
"You just have to ask what part a scorekeeper plays in a ball game or any game?. Answer :- None at all in the playing of the game !!" So if there is nobody there to keep score, who determines the winner? Dumbass!!
This video contains some of the most misleading and deceptive information on macro economics that has ever been presented. What it proves is any fool can present a half of a story that only tells part of the truth. Just look at the illustration at the 2.0 minute section: -Private Sectoral Financial balance and General Government Budget balance. . It shows sectoral balance without correctly explaining what it is and with omission of the relevant facts of the real story. . The reality is that the sectoral balance presented here only shows part of the flow of financials that occur in the macro economy between the government sector and the private sector.. Namely the financial spending of government without the financial obligation it puts on the private sector (you and me). This is because increases in the flow of money from that government spending places a corresponding financial obligation that private people are forced to pay for through taxes when the bonds that are used to create the increased spending mature and require taxes to pay them out.
I read some of your other comments that you made at other places: I would agree with your point of view that the amount of deficit spending by the state is lower when the money taxed out the economy is higher (all else equal). But this is only due to the regulations that the government has to back up its spending by gov. bonds. In the U.K., the English Central Bank has directly bought gov. bonds, as can be seen here BBC Finance March 4 2021 ruclips.net/video/G6EWcZvLivY/видео.html Now, if you consider that the central bank is just another branch of government, and this is where the debt papers are, the state owes the money .... to itself (which is essentially what is being said in the BBC video and which may beg the question why one should issue debt papers to oneself). There is a former FED chair who expressed thoughts very similar to proponents of MMT today (see below). en.wikipedia.org/wiki/Beardsley_Ruml "He also served as a director of the New York Federal Reserve Bank (1937-1947), and was its chairman from 1941 until 1946; (...) In 1945, Ruml made a famous speech to the ABA, asserting that since the end of the(...) gold standard, "Taxes for Revenue are Obsolete". The real purposes of taxes, he asserted, were: to "stabilize the purchasing power of the dollar", to "express public policy in the distribution of wealth and of income", "in subsidizing or in penalizing various industries and economic groups" and to "isolate and assess directly the costs of certain national benefits, such as highways and social security". This is seen as a forerunner of functional finance or chartalism." www.huffpost.com/entry/taxes-for-revenue-are-obs_b_542134?guccounter=1 ..[with an] inconvertible currency, a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue… It follows that our Federal Government has final freedom from the money market in meeting its financial requirements… All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.” Beardsley Ruml, 1946 PDF: Facsimile of the original article of the speech by BeardsleyRuml in Newspaper "American Affairs", Jan 1946 web.archive.org/web/20200414003001/www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf And yes, I would add the taxes my be "obsolete for revenue", but they are of utmost importance to make a currency work. Any government that stops collecting taxes will ruin the currency very quickly. This has been experienced e.g. by the government during the American revolution with the 'Continental' Currency.
@@markusstrunz446 I am addessing your points singularl . Firstly the idea that taxes are of the utmost importance to to make any currency work. This is not true and easily disproved by factual evidence rather that taxes did Nothing to get acceptance or keep the money in any working order. Even their own governments dumped it in all of the countries over the past 80 years where infaltion resulted in the failure of the currency. That is undeniable historical fact rather than someone's opinion. The other present reality is crypto currencies work without any taxes at all. So currencies don't even need taxes to work. .
@@markusstrunz446 You say "Now, if you consider that the central bank is just another branch of government, and this is where the debt papers are, the state owes the money .... to itself (which is essentially what is being said in the BBC video and which may beg the question why one should issue debt papers to oneself). ". The reality is that you cannot just notionally say the central bank is the government because the reality is the central bank is Not the government in the US or in the UK or in nearly all other advanced countries. It is just as you cannot say taxes are destroyed because it is Not the case and the evidence shows that just as the historical facts show that it was not so. If the central bank just marked up numbers on the computer to produce more money without recording it as a debt the situation would be exactly like it was in other countries which operated that was and sent their currency went broke because it was not representative of real goods or services at all. Also if you were of that opinion why would you not let the private banks who create most of the money today do the same thing instead of insisting people pay back money they borrowed?
@@Rob-fx2dw Well, actually, private banks can only create create money because they are given the privilege to do so by the government. So the rules for banks are actually made by the government /the state, and these rules state that the borrower has to pay back the credit that he/she took from the bank. You could also complain, why can the government print bank notes, while I as a citizen can not do so, this is so unfair! Actually this is the case because the government made laws that say "the state can, and you, the citizen, can not do so" (or you will be sent to jail). You should have a look at his post. www.pbs.org/newshour/nation/the-good-you-do-for-the-dollar-when-you-pay-your-taxes "... Bitcoin can buy you plenty else, you cannot send crypto-currency to the government. (The IRS recently announced it will treat Bitcoin as property, not currency.) (...) Have you ever wondered why the U.S. dollar has value? It is not because of the gold in Fort Knox. There used to be gold behind the dollar, but not now. President Richard Nixon cut the last ties in 1971, effectively ending the foundation of the Bretton Woods international monetary system. Rather, the ultimate reason that the U.S. dollar has value, at least in the opinion of some economists, and in my own, is that no one likes being in jail. And dollars are a get-out-of-jail-free card."
@@markusstrunz446 So you understand that private banks actually create new money. In fact they create Most of the money in the system and don't need government to do that. Some countries don't even have fractional reserve requirements having done away with them last century - many years ago. So you don't need money government created to pay taxes which destroys Mosler's claims about need in government to issue new money to pay taxes. You can pay them from borrowed money as most people do. Putting people in jail does Not put value into money which is simply understood if you realize "value" relates to what goods or services money can buy and nothing else. It's sheer idiocy to believe that something can make itself more valuable - as someone once explained it is believing like you can pull yourself up by standing in a bucket and pulling the handle.
Ok, one more time I am going to write what Stephanie Kelton is basically saying: Because the Federal Reserve has the legal ability to print an unlimited number of dollars, we should stop worrying about how the government will “pay for” the various spending programs the public desires. If they print too much money we will experience high inflation, but Uncle Sam doesn’t need to worry about “finding the money” the same way a household or business does.
Lies that MMT spreads. " One of us issues the currency - they do" and "you and I are merely using the US dollar". Wrong from the start. First User of the US dollar is the US government itself which spends newly created dollars to gain real goods and services before anyone else in the private sector of the economy has the opportunity to do so. It competes with the Private sector which is you and me for goods and services. The representation of Government sector deficits being Private sector saving is just a ploy. Wrong and deceiving use of language combined with misused concepts. That is because Savings in the private sector can Only come from spending less than one earns no matter what the federal government has spent. You will note that in the chart showing the sector spending Kelton does not claim that private sector or debt causes government sector savings which it would if she had a realistic chart. It should be so if it is a real balance since in all balances there is a flow each way. She only claims a one way flow - No balance there at all. Again misuse of the concepts by a biased view of omitting reality. What happens in reality is the flow of goods and services To the government sector which is the true balance she claims to flow from only government to private sector.
pimliconz - It seems from your comment "Air-head" that abuse is the only thing you can offer as a comment. Not constructive at all. That being so then you need to see someone like a psychologist who can help you with your childish response to a verbal challenge that challenged you to actually think. Of course the bright side for others on this forum is to now have a demonstration that you are that way inclined rather than intellectually capable.
The first point (re consumption of real resources) is a cornerstone of MMT i.e. govt should only create the dollars when there's spare capacity. No counterargument there. The second confuses debt between entities *within* the private sector (households, firms etc) with the aggregated debt of the private sector as a whole - where the sectoral balances thing is necessarily true as a matter of accounting identities.
Rolfus. The aggregated debt is not something that is meaningful in terms of proving that a debt created by one sector is a surplus of fiat money in another sector since that so called surplus has to be paid for by the people in the private sector because they are the sector where production of goods and services occurs. That surplus of fiat money is not increased wealth. All it represents is control over existing goods and services taken from the private sector and placed into the hands of politicians so they can spend it according to their own politically motivated schemes. The whole point of accounting is to have a balance not a surplus since surpluses in a macro economic sense are not profits. The point about capacity is so doubtful as to be irrelevant since it cannot be assumed and the detection or belief in under capacity makes so many assumptions that it is just in the realm of fantasy. One only has to ask at what price is under capacity in any industry assumed and because capacity is related always to price and for that price to be established for whatever is produced. It is the price demand supply equation on the input and output side of any business that determines an industry's capacity and that fact negates any accurate estimate of supply capacity. Nothing without a correct accurate but almost always unattainable knowledge of true under capacity should be used to ascertain anything related to economics.
@@Rob-fx2dw Insofar as I can tell what you're on about, this just seems to be the old "crowding out" argument, ie. that govt spending diverts real resources rather than deploys unused ones. If/when that happens you will see inflation and govt (in an MMT world) would cut spending. Simple as.
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One of the most important points in her thesis is the line item in the Federal budget dealing with "interest expenditures". It is simply a subsidy for bond holders and is of zero benefit to anyone else.
The solution, perhaps? Direct issuance of currency by the U.S. Treasury to replace Federal Reserve Notes issued to "purchase" government securities.
She’s absolutely right if you trust everyone in government to act in the peoples interest 100% of the time while having 0 accountability for irresponsible any spending habits…what could go wrong?
Inflation benefits the people with money to invest.
Excellent insights! I resonate with your views completely!
I am surprized why most economists haven't thought of these perspectives in so many decades?!!
"The Government is not like a household. A government is like a bank. And a government running a balanced budget is like a bank that simply lends back as much as it gets in repayments, therefore the money supply never grows and without that, you don't have a growing economy.
It's one of two ways to create money, and if you don't let government create money by spending more than they take back in taxation (fiscal policy), you have to rely on the private banking system to create the money in the form of credit (monetary policy) and you therefore get private debt bubbles." ~ Prof. Steve Keen
Is she lying or does she not know this?
@tim mellis
She knows her shit. It’s hard to understand at first, try looking up some more of her talks. She has a book on this too.
@@timmellis5038 She is lying. She won't debate the MMT so called facts because she will be exposed.
@@timmellis5038 Probably both.
@@timmellis5038 absolutely 😂. Professor steve keen is stuck in the bubble
You never give me your money.
You only give me your funny paper.
I love this woman. Her lectures should be required in every high school in America.
You’re better off just giving credit card applications to high school kids.
Yah, that would be great!
You are an idiot.
Check your "money mechanics." The Federal Government does not issue currency. Banks, by the authority of the federal government, issue currency. But, either way it's legalized counterfeiting. It transfers resources from one individual to another.
There are many changes in law that are needed to create a more honest system of money creation. At the top of my list are the following: (a) End the power of the Federal Reserve System to issue Federal Reserve Notes as the nations' legal lender, shifting this power to the U.S. Treasury; (b) Amend that portion of the banking laws that allows banks to create new money by making loans. Banks lending should be limited to the cash the bank takes in as customer deposits, cash borrowed from others, or cash obtained by the sale of shares of stock or other assets; and (c) Encourage each state to establish a public bank modeled after the Bank of North Dakota.
That is Not a more honest system you have put forward. It is a more dishonest system that enables easier manipulation of the money creation.
That is why the existing system although imperfect is in place . - To divide the power of the money creation minimizing the power of politicians from easier abuse of money creation.
@@Rob-fx2dw I can only recommend that you read the history behind the creation of the Federal Reserve System. Professor Carroll Quigley covered this territory thoroughly back in the 1960s. It was J.P. Morgan who did his best to make sure the banks remained in control of money creation. The measures I have proposed are designed to prevent the abuses you allude to. Of course, there will need to be specific controls on the U.S. Treasury's powers to create and spend money into circulation.
@@nthperson Perhaps you should look at the facts including the fact that people are driven by the need to and the desire to earn money to improve or keep up their lifestyle so they have conflicting interests. There is no super honest group of politicians who you want to place control of the money directly under .
Anyone (a person, a company, a government) can issue as much as they want of whatever IOU (bond or currency)
it's just a matter of finding someone else willing to accept what you're issuing
it's a big game of trust. Once Trust is lost, you can't force it back by printing some out of the blue.
A government can demand a tax in that currency that you distrust, and you must find a way to earn that currency or suffer the consequences.
Make the discussion about the world reserve currency and you've added an additional layer of necessity.
Want to see a train wreck in the making, look the euro and how it is turning importer nations (i.e. the u.s.) into ghettos. Be grateful that we have the ability to expand the monetary supply when so few hoard so much untaxed wealth, or we'd be greece within a decade.
So Jim lol might explain why some EU countries have done well and some have cratered. They are on the same currency. Can we admit that having a sovereign currency is a different circumstance? Who puts the number on your dollar bill? When you get two bills with the same number you know at least one is counterfeit. Try that with Bitcoin!!
Anyone who understands MMT does not shy away from the idea that there needs to be demand for the currecny. That is a central tenet of the thinking
@@c.k.roberts3221
1) EU countries that are largely exporters are doing well. Those that do less exporting generally are not. (Consider that though ALL states in the US use the same currency, their economies are markedly different in each state. Same currency different wealth, health outcomes, education, etc. How can that be?)
2) EU CB requires austerity (e.g. reduce employment, reduce government benefits) from EU countries that borrow Euros. The worse the economy the higher the borrowing interest rate. Vicious spiral downwards. That's why Greece left. if Greece had remained on the Drachma, they would have done better. Now they have their own currency. Borrowing isn't necessary.
"Fiscal austerity or a euro exit is the alternative to accepting differentiated government bond yields within the Euro Area. If Greece remains in the euro while accepting higher bond yields, reflecting its high government deficit, then high interest rates would dampen demand, raise savings and slow the economy." en.wikipedia.org/wiki/Greek_withdrawal_from_the_eurozone
And Trust is lost already !
A great talk and, broadly speaking, correct, particularly in 'exorbitant privilege' America's case, but it should also be pointed out that all currencies can be (and historically have been) effectively devalued by the expedience of their venal issuers without the sufficiently productive, vibrant, rigorously taxable economic activity that ultimately serves to underwrite their value.
Nope. This is all garbage. Deficits matter.
@@allroadsleadtobitcoin You are correct - MMters constantly misrepresent the situation by missing out the facts. Deficits means Treasury bonds must be sold to pay for the shortfall of taxes. Those bonds eventually mature and the taxpayers fund their payouts to whoever bought them be they locals or foreigners. Government do not fund the payouts becasue their income is either tax payments or more borrowing through the bond sales.
@@Rob-fx2dw Equally important, all of this borrowing exposes those who save to a continuous loss of purchasing power. Thanks to Federal Reserve policies that pull down interest rates on savings to below the rate of inflation, a large segment of the population has suffered heavy losses in income. Those with a cushion have moved their financial assets into equities, with the result that stock prices have climbed far above what earnings and dividends justifies.
She had better take a look at over 50 hyperinflations just in 20th century when the same economists and politicians thought that deficits do not matter.
Of course - just because Kelton is saying that MMT is an accurate description of how a Sovereign Fiat Currency works (depending a bit on which one), does not mean that knowing the Truth about money, suddenly means it is impossible to mis-manage a currency or use it to serve elites rather than society.
BUT there is far, far less excuse for the economy serving the elites, when the question "How are we going to pay for it?" is revealed to be based on false pretences, and instead should be something like "How are we going to RESOURCE it?" and "Will the currency still be stable?"
According to MMT description, Govt Spending ALWAYS still is limited by:
(1) Inflation/Deflation. Obviously your proposal could be a problem here.
Prof Stephanie Kelton says these two all the time (& prob did in the video).
(2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes.
(3) Employment & business issues.
(4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us?
MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible.
@CheeseInc. should teach you a few things about the economy and how money works.
woah very useful much thanks
We are canadian
@@CheeseInc if Canada is the sole issuer of Canadian dollars, then the system is the same. Prof Kelton's presentation applies to any country that is a sovereign currency issuer.
If taxes don't fund the National Government, Why are we paying taxes? The Government will not run out of money? If our country is worth $1000 The Government can print $1000 in money. If they print $2000 then the dollar has only 50 of its previous dollar thereby devaluing the dollar and making us less able to buy things made outside the U.S.
Excellent!!
How is this any different from Keynes?
Stephanie speaks about the U S A Presumably the same go`s for all Countries .so all Countries can print as much money as they like or does MMT only relate to the U S A .
A good talk. Well the dollar can loose it's value. That's a risk too.
Stefan Johansson That is what in flatiron is.
That's inflation, but is easily dealt with setting up automatic markers for inflation in the key sectors of the economy.
@@darylgreco2965 And dealt with by use of taxation to remove some of the money from the economy.
Can loose value?? Are you for real? Look at the the value of dollar since 1913 or just since 1971 since going off the gold standard. Dollar lost already 99% of its value. There you go, just printing money.
She knows about inflation. MMT economists are very concerned with inflation but the point is that is the question to have. The question is about how will what we do impact inflation, and a big part of that is how do fiscal policies impact GDP. The real debate to have is whether or not something pays off. Imagine you're a business owner and are thinking about two different investments. One pays 1.5x your input over 10 years and the other pays only 0.5x but costs 1/10th the amount. As long as something creates a positive expected value you should do it. An individual or a business might be capital constrained, but a government never is. If things are sound investments i.e. they grow the economy by more than what they cost to create, we should always go for them. The fact that the economy got bigger means it paid for itself.
I think item 10 is kind of the answer in a nutshell to 'how will you pay for it'. All those workers, whether the guys who build the infrastructure or the people who build the machinery or the people who make the steel or mine the steel or who grow the food that all those people who are 'building' will eat.....will all pay taxes that will go back into the pot to continue the building and care for the people.
No, that's the opposite of what Kelton's saying. Tax revenue *never* funds any government spending. What it does is 1) drive adoption of the state currency, 2) release real resources from the private sector such that government spending on those resources does not excessively bid up prices, and 3) moderate aggregate demand by removing purchasing power from the non-government sector such that, in a similar fashion to point 2, resource prices can not be bit up excessively by the non-goverment.
It's definitely going to take a few more of these videos for me to catch on and begin to put these details together. But 'they' are going to have to come up with something because AI is going to force some kind of improvement or change to the current system as we all stare down the coming job losses that are forecasted in the future. Billions of starving people will have a thing or two to say about their situation.@@JGS2295
Sem legendas fica difícil
Number 7. Fiscal policy is a no-win situation. Conservatives and Right Wingers like to label themselves as fiscally responsible. But everytime they're in government debt and deficits go up while they continue with their budget cutbacks. However, as shown, when Bill Clinton balanced the budget and created surpluses, Democrats are blamed for balancing the books on the backs of the people. The same thing happened in Canada when the Liberal government under Chretien and Martin achieved surplus budgets. The Conservatives blamed them for putting the burden on ordinary Canadians.
So we've got to move on to something else, that works.
Indeed, we do need to move on to something else that works, but how many citizens in the US or Canada or UK or Australia, for example, actually understand monetary operations or MMT? How many understand that the federal government spends first, taxes second and cannot run out of money, they don't have to raise taxes to fund programs, but they should raise taxes on the super rich because that level of inequality is unhealthy. I thin a tiny fraction of those populations know it. Because if they DID know it they would go: "Why don't we have Universal Healthcare? (in the States) Why don't we have free college? Daycare for all who need it? Paid vacation, paid sick leave, parental leave and housing for all? Why not a federal jobs guarantee and a UBI and a robust transformation towards renewable energy and climate change mitigation? Those are all essential for human health and basic decency, would quickly eliminate poverty, food insecurity and homelessness, it would be enormously better for society. Why isn't that funded!?"
The answer would be, they can fund it, we should expect it, but those governments are full of puppet politicians who rather lie by omission to the public than tell them the truth and improve their society rapidly. And they are influenced by big corporations and media to keep their mouths shut on monetary operations so the people don't rise up and demand human rights policies.
Does any country other than USA can be able to remove taxes and do government spending with paper money printing as much as she can???
Well yes - any of they with a Soveign Fiat Currency - Australia, UK, Japan, but NOT EU countries.
Currency isn't created/spent or deleted/taxed by printing & burning notes. They are only numbers in accounts on computers, in software.
According to MMT description, Govt Spending not limited by funding (how can you run out of digits to put into an account, if you are solely in charge of that??)
Rather, it is still and ALWAYS still is limited by:
(1) Inflation/Deflation. Obviously your proposal could be a problem here.
Prof Stephanie Kelton says these two all the time (& prob did in the video).
(2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes.
(3) Employment & business issues.
(4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us?
MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible.
Did that answer your question?
If not, please read what I said carefully & feel free to be more specific if you want to.
Of Course but you would have to be a self deluded fool to think it would all turn out good. - Just look at which countries kept their government spending far higher than taxes and see how their money system collapsed and heavily damaged ruined their economies .
Minimum wage act enforced correctly locally is relief for inflation and creates transitory inflation if established. The minimum wage linked to local housing cost and cost of living as written not a transient wage. This has not been required by business.
In terms of physical resources though- we are running out, aren't we? So is the current system a pyramid scheme where a vanishingly small minority makes the majority of the financial wealth to have access to the 'best' goods in a dwindling resource planet? And does that explain why the richest are in a space race?
It's hard to know exactly how many physical natural resources we actually have. Since there are so many big, private corporations who control a lot of the industries that use natural resources like wood, iron ore, lithium, and of course the dirty resources like oil, coal, natural gas - that data is largely kept private so we, the public, don't know exactly how much is left. However, I did just find a report about sand, as it is one of the most used resources - often for construction - it is definitely running out. Just by logic, almost all buildings are built with some part of sand and concrete, and so much development is occurring, it's going to run out if we don't make better systems to manage resources more efficiently and optimally.
Yes, the system now is basically a pyramid scheme, oligarchy where the rich own and control most of the resources and the influence in their governments policies, while the majority of the citizens are in the dark as to how modern money operations works and what policies they could demand to help. Unfortunately, people get scared when politicians say "We can't afford that! We will be billions in debt and your children will pay for it! And that's a waste of your taxpayer dollars!" All those are lies, at the federal level. It is NOT your taxpayer dollars paying for federal government programs or funding.
I do believe much of the super rich are aware that the system of capitalism is unjust and unsustainable and they are looking to 'escape' essentially with their rockets and, while on Earth, gated communities and private islands. They are cowards not willing to use their platform to inform the people how modern money works.
It's kind of disgusting really. Elon Musk and other billionaires have publicly stated that they do think something like a Universal Basic Income will be necessary, due largely to technological unemployment, but Musk won't then also use that platform to say to the people: "And your federal government could enact that policy right now, fully pay for it, and it will not mean your taxes have to go up to pay for it, the debt and deficit do not matter, the government will not run out of money, they spend first, tax second and I should also be taxed a lot higher because billionaires should not exist." Haha, he never said that and never would.
The road to serfdom.
We've been on a decline towards serfdom since they killed the unions in the 70-80s. Many Americans have already fully transitioned into serfdom. They are called gig workers now though.
The way I see it, when the government borrows via issuing bonds, it is moving money that has been swilling around the financial sector and putting it in the goods and services economy through its spending decisions. If there is spare capacity in terms of people not working, unused business capacity or a bottomless pit of cheap goods available that can be imported from China, it won’t cause inflation.
MMT turns this idea on its head and says that in the same scenario, what if the government instead created new money free of any interest obligations to bond holders and spent that - would it cause inflation? Logically no. I’ve even heard some economists describe bonds as near money - interestingly in 1930s Germany, the notorious MEFO bonds were used as a form of currency by big businesses involved in arms production to facilitate trade amongst themselves. You have to realise that the money a government receives for selling bonds has been created already, and was tied up in the financial sector to finance trades in shares and other financial instruments. It turns out that as money is not tied to a gold standard anymore, all of it has all been created out of thin at some point, mainly by private banks lending it into existence through their magic money tree. The trick for governments in all of this, is to not exceed economic capacity when it makes its spending decisions.
In the opposite direction, governments sometimes create money to buy back bonds from the financial sector. This is known as quantitative easing. Did you know that this process creates inflation in the financial sector? But of course, nobody minds shares prices going up do they! Private banks have also been responsible for creating inflation in the housing sector through mortgage money creation (bank credit) - nobody minds that either, especially if they’re lucky enough to be property owners already.
Kesini gegara bossman 😀
No, the Chinese are reorienteering away from selling tonthe US, and toward selling to India and Russia. Why? Their currencies are perceived as having less pressure to print.
Had to watch your opinion were very highly spoken of had to watch see what you had to say
Often *federal government spending* can be very profitable for the majority of people who have not won the lottery...
*Buy low:* Idle land, unemployed workers, vacant buildings, uninvested savings, hungry-apathetic children, unused machines
*Sell high:* developed land, reskilled workers, affordable homes, capital gains, children with a future, utilized capacity
*Timing:* When capitalists are fearful, banks won't lend, repeated company failures, no one is doing the necessary work, workers are forced to strike for better conditions, companies leave the country and close plants here.
Why are there only 6k views? This is some really good content. Short & detailed video that can be absorbed. Last i heard, you're Bernie Sanders' economic advisor for a second presidential campaign. Yet he won't speak your language on macroeconomics. Why? I don't get it.
There are only 6K views because any sane person understands that printing money devalues currency and puts a country onto the road to perdition - you have examples like Venezuela, Zimbabwe, WEimar republic. Printing unbacked money does not work.
@@the_real_economics so subsidiaries and socialism for the rich is fine. Is that what you're saying? We are not the same as those three countries and our economies are a lot different.
@@oaktownlaker No, you are just trying to put into my mouth something I did not say. Socialism for anybody is bad, let alone for the rich. Moreover, socialism only takes some elses money by force and redistributes it. But you need someone to actually create wealth in the first place, that is the capitalism, not socialism. But it is the government that allows this to happen (socialism for the rich). US economy is doomed, real wages doomed. In the old days, the worker with the lowest wage in the USA was quite well-off when he took his savings abroad. People used to migrate to the USA not because it was a welfare state, but because it was a hard-core capitalist country, where you could find job with real value, make money and take this money back to your home country, because dollar was something. Now this is not the case, you have devastated dollar value, trade deficits, government deficits, simply the US economy is in a disaster. I am from a former communist/socialistic country. I do not remember any Americans going to my country when we had socialism, but I remember a lot of people fleeing away to the USA, because the USA offered them better living standard. Even though they did not have college jobs, they still managed to make far a lot more money than in my country back them. Nowadays, I would never in the wildest dream trade away my country for the USA, I would be much worse off. I believe I acutally "live in America", not you. I feel sorry for anybody in the USA right now, because its economy is doomed.
@@the_real_economics
Sigh. Those countries did not have monetary sovereignty. We do. Nixon took us off the gold standard in 1971, which was a godsend; after that we could grow as much as we needed, if we spent the money on fundamental goods and services, not $100 million bridges to nowhere. With MMT, inflation is the real worry, which can be controlled with taxes, if necessary; but Japan has huge debt and deficits, but low inflation. Japan, too, has money sovereignty. Please Dr. Kelton's "The Deficit Myth."
@@jimmuncy5636 Are you fokin serious, smoked or just stupid? The Deficit Myth? For Christ Sake. Even in the 20th century someone can believe an idiot like Kelton with her MMT nonsense.
Despite the claims of MMT economists who incidentally can't explain the mathematics of money lending the government does NOT 'issue' the currency or money.
Most money in the economy is created by private banks when they lend and the remainder by the Reserve bank when it lends. That is the nature of how money is created and operates in the economies in what we call the modern world. It contrasts with the old gold standard that preceded it. Those two banks or government do NOT issue currency but merely lend it and it all has to be paid back like any loan because money in each economy today is purely fiat credit money created by a process of lending and borrowing.
Government is by far the largest user of money in the economy. They spend more than any other institution or person.
Sorry, Rob. The correct way to say this is that currency issuance is borrowing. It says so on the dollars. They are Federal Reserve Notes--"note" is the legal term for IOU. The Fed owes its noteholders, not the other way around. What does the Fed owe those holding dollars (besides another dollar)? Answer: a dollar's worth of relief from an inevitable liability--taxes. Taxes make the money valuable. They do not fund federal programs.
The reality is taxes do nothing to create any value in the money. That is irrefutable because it proven by historical facts of money becoming worthless despite taxes. Taxes and worthless money together.
@@dempseys3 your argument is faulted because value is not added by creating more money which is a pure financial asset since financial assets are worthless without someone else holding a debt obligation. You should have learned that lesson in the GFC where certain financial assets lost their value due to their debtors failing to pay their liability.
Love her
I know these are just sound bites, but she never mentions value when speaking about surplus or deficit. The number of dollars is irrelevant unless you take into consideration how easy/difficult it is to obtain those dollars.
When we're talking about spending, we're talking about government (Federal) spending, not household budget spending. What's important is how difficult it is to SPEND those dollars. That's what she's talking about when she says that raw materials are our only real constraints. To the government, the supply of dollars is basically infinite.
@@RuinDweller By printing money you are S T E A L I N G purchasing power from everybody else.
@@the_real_economics Tell that to Congress, and the Fed. Each and every single time our country passes spending bills, that is new money created. In fact that is where all new money comes from. So you're not reducing spending power, you're increasing it. It is extremely important that you finally understand this.
So listen to a complete lecture then.
@@Anti-NED_ProBRICS link?
Well money is printed and loaned at prime rate to banks to operate and when repaid this cash money is burned.
No. Not correct. The only money that is burned or shredded is paper money (currency) that has reached the end of it's useful life because of wear. The reality is it is the designated money of countries today is all fiat credit money created in conjunction with an equivalent amount of debt. Most of the officially designated money today is in digital form - about 98%.
But what does it mean to buy something from another country if you print your own money? Like what happened in Germany in the 30's? Hyperinflation? I don't understand fully.
Germany at the time did not have a sovereign bank that's the key That's why Greece went belly up,it had the euros has its currency
All of what is said my MS. Kelton does not apply to countries that do not issue their own currency (e.g., Greece) or that tie their currency to a commodity (e.g., gold) or have a fixed exchange rate vis another currency. In short, it only applies to monetary sovereigns who issue fiat currency.
Hyperinflation was due to war reparations. Read the history on this . Stephanie has covered it well. Zimbabwe hyperinflation, completely failure of agriculture products because land appropriation caused white farmers leaving and the black farmers didn’t have the skills, experience or technological know how to carry on farming. Read on this too.
@@lawrenceheasman2211 also Germany had to pay war reparations.
MMT is socialism with a fresh coat of paint. Irony? Stephanie is one of the richest Economist from United States. According to our analysis, Wikipedia, Forbes & Business Insider, Stephanie Kelton's net worth $5 Million. (Last Update: January 13, 2024) Ms. Kelton has pockets loaded with capitalist dollars while she champions socialism for profit. Socialism is a political and economic system wherein property and resources are owned in common or by the state.
not sure what she is really saying...but it seems like she is saying the govt can throw shed loads of money out to the people, for infrastructure, and growth, and should keep doing this until it affects inflation....only when inflation begins to move does the govt need to start reigning this in....and that basically you can ignore all these defiicit and spending figures....teh only thing to focus on is inflation.
One thing she doesn’t tell you. None of her work is published bc it’d fail if she tried to
Well, I can still see a lot of poor despite money supply expansion. What we're doing is chrematistics instead of economics. I'd like to hear more about the latter.
Did you actually watch the video, and if so, how can you understand that to be about word games? She literally says that the common understanding of where money comes from is false, and State Currency Operations work very differently.
Of economics:
According to MMT description, Govt Spending not limited by funding (how can you run out of digits to put into an account, if you are solely in charge of that??)
Rather, it is still and ALWAYS still is limited by:
(1) Inflation/Deflation. Obviously your proposal could be a problem here.
Prof Stephanie Kelton says these two all the time (& prob did in the video).
(2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes.
(3) Employment & business issues.
(4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us?
MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible.
There are more things about how money works, but I don't want to write too much if it isn't welcome (esp to someone who doesn't have an open mind as well as discernment on an issue)
Adding more to the money supply, in general, doesn't address poverty, it's beating around the bush, not directly addressing the issue. If you really wanted to end poverty, desperation and give people a ground floor to stand on so they can contribute to society without the pressure and stress of a day-to-day struggle to exist, you could enact a federal program like Universal Basic Income that gives every adult $1 000 straight into their bank account. They can use it to get food and other things they need to be healthy. You could package that with Universal Healthcare (for the USA), a Housing for All program that includes social workers for those in need, Guaranteed daycare and free college, and a Federal Jobs Guarantee. If that happened, because the federal government funded those programs, as they totally can do, poverty could be eradicated in the US in months and the improvements to the health of society would be off the charts.
There are a shocking number of people commenting about this who clearly have no ability for independent thought and must have serious difficulty walking upright or finding their way home each night (probably get a taxi, I guess).
There are two important things you need to know about Modern Monetary Theory.
1. It's not Modern.
2. It's not a Theory.
What money actually is has been a problem since forever and in the 17th and 18th centuries a number of landmark efforts were made to build the kind of economic infrastructure that we have today but with varying success. Adam Smith crystalised many ideas about trade but he never really addressed what money is. Only in the 1880s was it thoroughly put down on paper, but extremely obscurely, and it took further work in 1913/4 to express it in terms that even those with a moulded-in capitalist mentality should be able to understand. After centuries of being dragged down by silver standards, gold standards and copper standards, a way was now defined to build economies worthy of humanities technical ingenuity. We know it wasn't the first time because Abraham Lincoln was an MMTer. Bretton-Wood still straight-jackets the economic thinking of the age even though it was dead half a century ago. Let it lie in its grave guys. What has been christened MMT is simply a description, not a theory. What Kelton describes is simply an opportunity to bring economic management into line with reality ALL THE TIME as opposed to only when there is a war.
From what you say it seems you also don't know the nature of money today. MMT is just rubbish based on false observations and an is almost childish belief. The economists who support rt this idea make claims that are blatantly false and contradict the correct explanations of the institutions (Reserve Banks) that actually create the new money lent to government to pay their deficits and the private banks who create most of the new money in the economy.
@@Rob-fx2dw "new money lent to government"? Now I know your assertions are based on the usual fantasies.
@@jimf671 How do you know what you are asserting or defending is fact? Is there an explanation by the manufacturers or did you just concoct it.
@@Rob-fx2dw Go away auto-troll.
@@jimf671 You are a typical MMT follower. - Trying to silence others to stop them from presenting facts that show your beliefs to be false and misleading.
Recently Kelton has been putting up more videos with no comments allowed. Why - because the MMT economics does even Not stand up to scrutiny from members of the public and others who really have a better understanding of the situation and she can't address questions that are posed.
Robbie my boy still out of her kid spreading your lies and b*******. You are one pathetic individual you f****** turd
And yet you offer no scrutiny of any kind. "MMT bad" is going to need a little expanding upon.
@@dannywindham3295 You are again a typical abusive MMTers who can't handle rational thinking and can't therefore determine between fallacies and facts.
@@DavidBreece MMT claims taxes do not fund government spending. Yet they can't explain why the historical facts of 200 years of history as shown in the Whiethouse records demonstrate that taxes fund almost all of government spending. See table 1.1 of www.whitehouse.gov/omb/historical-tables/
MMTers claim new money funds taxes but can't explain why the records of US budgets shows budget surpluses and that could not have happened if taxes did not fund government spending since a budget surplus is where taxes exceed government spending.
MMTers claim taxes put value into money despite the fact that taxes put NO value at all into the money in economies where inflation led to the money being worthless.
May the Biden ream choose Stephanie in their economic advisor team and not wallstreet 1% cats
It might not run out of dollars, but those dollars might become worthless. When I was a teenager and a pothead this might have sounded good to me.
That's why taxes exist to take money out of the economy. Plus you can reduce spending if inflation is an issue
@@thepolticalone961 ... but then and there you run into political obstacles: Increasing taxes is a huge enterprise in playing lobbyists against each other; so it takes much time; and reducing spending, often according to the same lobbyists, is also difficult. So while keeping inflation in check might be simple in theory, it is not, in practice - for reasons completely outside macro-economics. But this alone might make it not as useful as some believe.
Gov't just injected nearly a trillion dollars into the banking sector, they like to refer to it as QE. In reality they simply pressed a button and magicked the money into existence. I didn't notice the inflation, did you?
As long as you have unused resources it isn't a problem, when you have competition for scarce resources it is. That's when you used taxation to remove the excess money (governments create money taxation destroys it). To begin to grasp the issue think spend and tax not tax and spend. Taxation does not fund public/federal expenditure.
You don't have to be a pothead, just apply some critical thinking.
@@neill392 Did not age well.
@@wouldbegood Except the current inflationary pressures come from a shortage of supply not a surplus of demand.
I do hope MMT stands up to scrutiny over time because conventional economic theory is totally incapable of dealing with the savage effects of covid-19 along with the need to address climate change.
No economic theory is capable of dealing with any crisis. Economics is based on made up theories and borrowed formulas about a perfectly imagined world of...economics. There is nothing scientific about economics. Astrology might be a better predictor of life's challenges as it at least is based on the science of astronomy and they know with precision where all the planets are from ages of scientific observation. The results of consulting an economist/financial adviser and consulting an astrologer are about equal.
Nope - It won't. Why? - because it's garbage.
What do you meant 'stands up to scrutiny over time'? It's a current fact and it is how monetary operations works in federal governments with currency sovereignty like USA, Canada, UK and Australia. Mosler (the originator of the publication on MMT) said himself that what he published in the early 1990s about 'soft money' or MMT hasn't had one word refuted. It's 100% accurate to say that the federal government spends first, taxes second, they cannot run out of money, cannot go broke, they don't have to raise taxes to fund any program, and the debt is not a problem that will burden future generations. That's how it works. Nobody can factually refute this. If they are politically charged or have corporate interests that conflict with people knowing about MMT, they might muddy the waters to say it isn't true or scare people to say inflation will skyrocket, but that's not refuting the facts of modern monetary operations.
The KEY thing is, as I see it, is literally that not enough people even know about it. Most people went through all of their schooling never ONCE being taught how the monetary operations works. So, unless they've done their own research to find out about it, they are in the dark.
But, once they come to the light, it could be a tremendously positive power of the people to have this knowledge because they could demand something for their vote. They could protest and build a movement that pressures elected officials and any hopeful elected officials to install human rights policies like Universal Basic Income, Universal Healthcare, Free College, Green New Deal and many others that are desperately needed if we hope to have any sort of livable future.
The Establishment is counting on not enough citizens to know about MMT, know what they can demand for their vote from that knowledge and use it to crush capitalism out of existence and replace it with something sustainable and healthy.
OK somebody make the case that MMT is wrong. This needs to be Democratic Party orthodoxy.
It is not so much wrong as (alas) often oversimplifying in talks like this one - then, where necessary, backtracking to some common-sense point.
@@h.m.muller9307 Recessions generally result in a general price deflation. This time around, the bail out of the financial sector and the steep reduction in mortgage interest rates allowed the nation's property markets to quickly jump back up to and then surpass the 2007 highs. The stage is set for a more severe crash in the not too distant future as the mountain of private debt climbs much faster than household incomes.
An MMT understanding could be used to serve Conservative Policy goals & stuff everyone likes to, as well e.g. lower taxes; funding Veterans; Charter Schools; cheaper healthcare; etc.
MMT is only intended as an accurate description based on real state currency Operations. Common Sense proposals do flow from that though.
does this apply to my 3rd world country? im too dumb to understand anything
Rio that depends. If you have a fiat reserve currency, then yes. In real terms, this applies to the US, UK, Japan and the EU but the EU is in the grip of German inflation fears. The Japanese run deficits 200% of GDP with no inflation.
im gonna have to check out everything this woman has said...she seems to really be on to something here.
@tecnisparta
Monetarily sovereign states only go bankrupt if they choose to go bankrupt, their sovereignty is violated, or for reasons tied to political instability (breach of "full faith and credit."). No amount of "debt," fearmongering, or economic miseducation will change that FACT.
@tecnisparta She's not wrong
at 3:00 i think she got a bit mixed up ....she means the govt borrowed money for the economy , and it sold bonds to get that money from large financial institutions.... the debt is the bonds that are held by financial institutions that have not yet been realised....
she says the govt spent the money in the economy ..which implies the money is gone...and then she goes on to state that the govt then traded the cash for bonds....how on earth they can do that, AFTER THEY HAVE SPENT THE MONEY BACK INTO THE ECONOMY ...gets me.. so it is like i said ...NOT LIKE SHE SAID.
i am not sure she knows what she is talking about ...forget her title she got it wrong.
THE WAY she says it, is like the govt actually bought bonds...as the govt is the issuer of bonds...who did the govt buy bonds from then.
Thank you Prof. Kelton.
Great economic theory. MMT.
Lol
She is factually incorrect, watch Merrill Jenkins on RUclips.
It does matter who creates the wealth and exchanges it freely without fractional reserve banking.
I agree and there is in some countries no reserve requirement at all. Australia has had no reserve requirement for over 40 years..
. Additionally which ever was you look at it the reality is all fiat money and is purely financial asset which makes it worthless unless it is backed by debt held by someone. That someone is the private sector who in indebted with the amount of money created through the Federal reserve bank operations when they gain an asset being treasury securities. Those securities mature and the public taxes are taken to fund the payout.
"The government can't run out of money, in the same way, a carpenter can't run out of inches." I'm speechless :-D
Why don't you just print 1millioen dollars for every American, and everyone would be happy?
Hello Stefan;
That's a good question, but not an accurate reflection on what MMT or Kelton is saying (I'm quite familiar with both, for years).
The short answer to your question "why not give everyone $1m" is because even though you are correct that the FUNDING $1m for everyone is easy & no problem to provide by the Govt; according to MMT description, Govt Spending ALWAYS still is limited by:
(1) Inflation/Deflation. Obviously your proposal could be a problem here.
Prof Stephanie Kelton says these two all the time (& prob did in the video).
(2) Are the human, material & tech resources for sale in our Sovereign Currency? (or otherwise, issues of buying other currency). That isn't relevant to your question unless you mean printing physical notes.
(3) Employment & business issues.
(4) Is the proposal actually good for society, Bossiness & the individual - or is just virtue signaling or would bring out the worst in us?
MMT is only aiming at an accurate description of how a Sovereign Fiat Currency (e.g. the US dollar) works. It means that the economy can serve US, rather than serve the Some common sense proposals flow from that e.g. lower taxes most of the time; decent pensions, etc are feasible.
@@pebblepod30 Thank you for the reply. I'm on deep water here, as I'm not financially educated. ;-)
But the statement "The government can't run out of money, in the same way, a carpenter can't run out of inches." I'm sorry, but that does not make any sense.
I found Kelton on TED talk daily, and I was intrigued by what she said and also confused.
@@djgstefan
Hello again stefan, thanks for your reply & focus on the topic.
Now I see what you mean. How about if I explain it as "The government can't run out of money, in the same way, an Accountant can't run out of numbers to type."?
Or the score-keeper of a baseball game, can't run out of numbers to keep score with?
Does that make sense?
Basically, the point is that the Fed just types numbers into the Govt account, that is literally how currency is created.
(unless your talking about bank credit creation, which is not really delt with much in MMT, as i mentioned already & gave a link).
In my country (Australia), the Central Bank Governor literally admitted this when questioned by a Senator in an inquiry.
@@djgstefan
Did that makes sense? Maybe you still feel unsure or don't agree for whatever reason, no problem. Just wanted to clear it up.
I care about this because I believe if the Public knows about money creation & deletion, it changes everything in a good way. The question becomes "Do we have the resources?" rather than "How can we pay for it?"
And like Georgist Tax replacing Income Tax, I reckon it would have very broad support.
@@pebblepod30 Hi. I agree with that to some extent. 1 dollar can be called 1 trillion, or any other number. But, my problem with that, is that money has some agreed value internationally. So, some countries have gone bankrupt, and they have gone out of money. And of course, they can still print money, but, the money they print has no value. And for me, that is going out of money.
I'm not native English, but, I hope you understand my point.
Thanks
When government run bigger deficits the private sector gets a bill to pay for them because taxes are the only way that the debt created by the deficits are paid off when the Treasury securities (bonds) that were sold at the time of the deficit to fund it actually mature. All of the bonds mature in time as they historically have all done.
Net spending now has no impact on future taxation levels. It's a myth derived from a misunderstanding of how a monetarily soveriegn government works.
@@JGS2295 You and Kelton can't explain how a monetarily sovereign government works. The explanation MMt gives is not supported by the facts and Kelton cannot support it with her version the mathematics of the situation because MMT is rubbish that defies the reality of what happens.
That is why she never appears in debates with others except for puppet presenters she selects herself and who don't ask relevant questions that test her logic.
Take for instance her MMT belief that taxes create demand for and put value into the currency but the reality is taxes do not put any value into the currency which is proven by the fact that countries which suffered from massive inflation ended up with worthless money despite taxes.
Can you explain that ? Of course not without denying the incorrect MMT claims about how money gets value and acceptance from taxes.
I suppose you as believer in what it means to be a "monetarily sovereign government " you can explain why MMT's view is correct and why it contradicts the explanations of the institutions who actually create new money such as that of the Bank of Canada or bank of England or others whose information is on line for you to see.
I doubt you can.
We are so indebted to prof Kelton for explaining this most important economic item of knowledge to the public as the fear mongering continue to create hysteria of debt financing.
We have achieved good financial progress as a country and as a society.
But politicians have created the hysteria for their idiotic followers!
If China or the rest of the world is buying our government papers to finance our expenses. Excellent discussions. Regards
This is a dangerous academic proposal.
The government has printed fiat currency for many decades, and I see no improvement. The fallacies of MMT include that government employees or elected bureaucrats know how to efficiently deploy capital. They do not. They are some of the most corrupt people on the planet. Only the marketplace with hundreds of millions of decision-makers effectively allocates capital.
Another fallacy is that we rely on the confidence in the dollar as a stable value for trade (what happens when the world moves to other currencies or doesn't accept the dollar).
The problem with inflation (too much money pursuing the same goods and services) was discussed and is a huge problem. Presently, the US economy is running at full employment. In theory, all government procurement programs would need to shut down for as long as full employment occurred during these periods.
From an implementation perspective, it assumes that the government can buy what it needs domestically. However, a quick look at the trade deficit shows that's not the case. The argument for globalization and comparative advantages moved manufacturing offshore. What happens when foreign companies decide that US fiat dollars are worthless because you have changed policy to print wild amounts of currency? What happens if US citizens decide US fiat dollars are worthless and start using Bitcoin, precious metals, rare elements, or other currencies?
This is another academic telling us to reimagine the world to achieve Utopia. These people are dangerous for presenting half-baked ideas. No, thank you, I have enough Wesson oil.
Germans Weimar Republic had plenty of Government money by the wheel barrel loads.
You do know hyperinflation occurred in Germany because of embargos from other countries which limited trade
@@gmc5618 And reparations/penalties paid to other countries, decided at the league of nations (today's UN). It help Hitler rise to power.
@@callisto32 those reparations had to be paid in gold, not German currency.
@@gmc5618 Currency Yes, another reason Germany stopped backing its Mark with Gold at the end of WWI that contributed to the Hyper inflation. Once again an outcome of League of Nations penalties.
So.....the skyrocketing national debt is a good thing????
its good until it causes inflation. theres a bit of room until it causes inflation.
Essentially, yes (even though you might have been brainwashed otherwise, like many of us). Just keep the inflation in check, "somewhat".
Have you seen Japan's "debt" ?
Didn’t you listen? She didn’t say uncontrollably, some National debt is inevitable and it boosts the economy. In Canada when they had budget surplus, households and private firms suffered. Just think if the government turned off the water supply!
@@Anti-NED_ProBRICS yes you right Japanese do not panic about it . We are brainwashed to think about inflation, not employment or wellbeing
Should one exhaust one’s caloric resources to carry our money to market to do commerce (eg Germany post ww1 or ww2 disarmament)?
Should we then eat the paper money for the requisite energy in order to consummate our now (lesser?increased?) funds?
Frankly this sounds most like a toilet paper.
This lecture is a definition of the statement; "economists were created to give astrologers more credibility"
The carrot on a string is made of plastic, keep plowing!
her last suggestion is what the communist party of china does
haha
This lady terrifies me. I had an economics professor from UCI that use to sell this drivel. That one dollar taxed give out a 1.20 in benefits. Also just like Kelton, Prof Kaun was a big supporter of union mafia. Stephanie feels strongly about giving unions as much money as possible and making sure unions have the power pass laws to suit them and be the deciding factor in all elections. Run like hell from anybody who tells you that the best thing for America is to print money as fast as you can. Let the speed of the printers determine the money supply.
This is the most deviant way to come to power. Convince people that democrats or republicans can be all things to all people. Ya that's realistic. That IS Stephanie massage that we can have everything we want, nobody has to work for it. And we can increase the defense budget a 100 times over.
ok, try printing 50 trillions and say you are going to hire a shit load of workers, and buying steel. sounds great. hit me up and tell me how it went
Kelton fails to differentiate between the effects of gov't deficits financed by borrowing from private investors or foreign nations, and deficits financed by the central bank (our Fed Res bank) from new money created out of thin air in amounts out of proportion to the level of GDP. Th former effects are benign, the latter are simply a de facto tax on people's savings, by eroding the purchasing power of the previously issued money.
Government deficits cannot be "funded" from any entity other than the government spend. The bonds sold to investors of any stripe are essentially the same as a CD savings for the investor. The reason is that bonds are only purchased with US dollars; which were sourced, as all US Dollars are, from a federal spend.
@@bradsandler6256 Evidently you've never heard of the Federal Reserve Bank. Currently (the "stimulus" $) are ALL coming from the Fed. I'm guessing you are over your head in this.
@@clarestucki5151 The Fed is authorized by Congress. If you didn't know that then you are way over your head.
@@bradsandler6256 What causes you to think I did not understand that the FEDERAL Res bank is not a gov't entity. Although the term is not exclusive, that's what "FEDERAL" means in this context, is it not?
If she’s right then no one should have to pay taxes since the government can just print more at no consequence apparently....
I’m shocked this woman has a degree.
It's a degree in stupidity !! that's the explanation.
No, because taxes are needed in this system to take some money out of the economy and to create demand for the currency for people to work. The simple analogy would be if I gave you 1 business card every time you did a task I wanted done like mow the grass or take out the garbage or build a planter box for gardening - well, in a month, you probably wouldn't do any of those things because there is no reason for you to work for them, those bookmarks don't mean anything. But if I then say, I need 10 of those business cards at the end of the month, if you don't have that then you can't watch TV, go out to eat at a restaurant or go fishing. Now, there is demand for that 'currency' and reason to work, you probably want to work up much more than 10 business cards so that next month you have more breathing room to pay the tax and still do the things you want to do.
What she is getting at is that the federal government can fully fund programs for the greater good and human rights, like healthcare, education, housing and green energy transformations without running out of money, and your taxes don't go up to pay for those funds, that's after the spending happens taxes take some of that money back in.
@@coolioso808 if my taxes don’t go up then where does the tax money come from?
@@lucsolberg8466 well, are you talking at the municipal level or the federal level? On the municipal level, it's different, the city does get much of their income from the tax base of the properties, businesses and residents and they might decide to raise taxes if they really want to fund a project like a new bridge.
On the federal level it works differently because the federal government issues the currency to all. They are like The Bank in the game Monopoly, they give out the currency and they can never run out of it.
On the federal level your taxes don't fund any projects, programs or policies, the taxes are subtracted from the economy at the end of the year. Fed spends first, taxes second. Let's say they give you $100, they put $100 in your account, then at the end of the year they tax 30% so they take $30 and you are left with $100. The tax didn't come from anywhere, it was just taken back from the funding you got originally. And taxes are there to create demand for the currency and for work, as well as try to mitigate huge income inequality (ideally).
@@coolioso808 I agree that these things work in the ideal scenarios, but these systems always end up being abused and cause more harm than good over time.
Intriguing... I just hit Like and saw that my Like was number six hundred and forty three. I remember that number is somehow important in Gematria.... Jewish though regarding symbolism in numbers?????
Wtf are you talking about
"It's simple, we pay for it the same way the CONGRESS paid for the $700-billion defense authorization program,
congress VOTED that economic policy/funds into existence and WITHOUT raising a single dime in new federal taxes." ANSWER = DEFICIT SPENDING. HELLO?
But how did you come to the conclusion it is deficit spending? Where did you learnt that, ho do you know that is true? For me, it is only because that is what i read in newspapers, not because I learnt about State Currency operations (e.g. how the Fed works).
And if what we were told before is true, then why doesn't your Congress look for someone to borrow from or Tax before they decide on spending $3.5 trillion?
That is so big, surely they would need to ask first?
But they don't do they? Stephanie Kelton actually works in that field. They don't first spend a month begging China or the World Bank to loan them those US Dollars.
And where does the imaginary lender get the US dollars from?
If what you were taught is true, then why would they spend without checking with their supposed lenders if they had such ridiculous amounts of money? And where does the supposed lender get it from?
So how do you know what you think you know about currency operations? I can answer that question too, I've thought & read about it, looking for evidence & logical explanations rather than ideology or unfounded assumptions.
Lol What a ridiculous thing to say out loud.
she is brilliant
Can MMT explain why 2 parents now have to work ever since going off the gold standard? Nope!
Spot-on. No she cannot. Money-printing supporters do not realize that we cannot just print houses, food, cars etc. out of thin air.
Since Reagan presidency America makes rich great again. Costs of living like education, healfcare has been increasing fast. Salaries risen a little bit over inflation despide of growing productivity in economy. Most profits from rising productity are going to top percentile.
@@M43782 The key year is 1971, Nixon, not Reagan. wtfhappenedin1971.com
Yes. Because wages aren't tied to inflation.
You're ignorant person, raising a Q and answering it without reasoning.
Because labour has become undervalued?
She makes many very simple assumptions about US debt and growth in private sector without taking into account the actual complexity of the overall financial situation. She makes good points about taxes being used to flatten income disparity, but then she wonder off into la-la land. She has a too simple model about cause and effect. I will continue to listen to what she has to say as she make some good point. She is not ready to advise all of us how to vote on economic issues.
It is not meant to be complex, you can't explain complex economic ideas and models to people who do not know anything about economics.
There is enormous complexity behind this simple presentation. Look up Bill Mitchell, the Australia economist who co-developed MMT. He will give you all the complexity you need.
The most nonsensical , deluded pitch the Money Masters ever made. They are at a dead end and trying desperately to cover it up.
Indeed. This nonsense is so pervasive, that it's led to the crisis at hand. Even Keynes never envisioned a permanence in liberal fiscal policy. If all this nonsense was true, there would be a lot more pyramids on the planet.
she says we only owe china a bank statement..in reality all bonds mature...so they actually owe china real money.
But our money, since 1971 when Nixon took us off the gold standard, is fiat currency, numbers on a page or in a computer. We can always just put in the numbers. No money or gold will be printed or shipped over there. China can then purchase things with those computer numbers, probably buying things from us. It's just an accounting procedure; unlike our personal bank accounts, we can't print our own money and have it universally accepted.
I know MMT is mind-blowing, but so was the Corpernican theory that the Earth moved around the Sun and not vice-versa. To understand it requires a paradigm shift. Even major economists don't get it, because they were taught otherwise. MMT is now, in places, being used by the U.S. and the U.K. It looks very promising. Read Dr. Kelton's "The Deficit Myth."
@@jimmuncy5636 ''China can then purchase things with those computer numbers, probably buying things from us.''
Like what? People in the USA barely even buy things made in the USA.
“Modern Monetary Theory”- Translation: ‘this time is different’. That’s manic
Kelton repeats one of the most absurd analogies in all of history at 7:35 in this video. It demonstrates the absurdity of judgment that MMTers display.
You would have to be a complete goose head to believe it is any way representative of what happens in a contest or game.
The analogy of the score keeper in a game and the Federal government in money creation.
You just have to ask what part a scorekeeper plays in a ball game or any game?. Answer :- None at all in the playing of the game !!
What part does the government play in the economy spending new money and taxing it - PLENTY -and more than any other company or person they spend new money first and then spend it again when it collects taxes and re spends it.
The government is the first player in the economy game and the biggest. It's the biggest team playing in the whole economy. Not some mere recorder of results.
But a score keeper is Not any way a player in a game and is purely a recorder after the fact when someone scores. Just as many people looking on in the spectator stands are recorders but play no part in the game.
"You just have to ask what part a scorekeeper plays in a ball game or any game?. Answer :- None at all in the playing of the game !!"
So if there is nobody there to keep score, who determines the winner?
Dumbass!!
Stony Brook University absolutely sucks.
bunch of nonsense
If Magical Monetary Theory worked, Zimbabwe would be the most prosperous nation on Earth. It is among the least prosperous. Case closed.
Nonsense... This is the way to become Greece...
Yes because Greece was totally the issuer of the world’s reserve currency.
Greece doesn't issue its own currency.
Popping P’s make this intolerable.
This video contains some of the most misleading and deceptive information on macro economics that has ever been presented.
What it proves is any fool can present a half of a story that only tells part of the truth.
Just look at the illustration at the 2.0 minute section: -Private Sectoral Financial balance and General Government Budget balance. .
It shows sectoral balance without correctly explaining what it is and with omission of the relevant facts of the real story. .
The reality is that the sectoral balance presented here only shows part of the flow of financials that occur in the macro economy between the government sector and the private sector.. Namely the financial spending of government without the financial obligation it puts on the private sector (you and me).
This is because increases in the flow of money from that government spending places a corresponding financial obligation that private people are forced to pay for through taxes when the bonds that are used to create the increased spending mature and require taxes to pay them out.
I read some of your other comments that you made at other places:
I would agree with your point of view that the amount of deficit spending by the state is lower when the money taxed out the economy is higher (all else equal). But this is only due to the regulations that the government has to back up its spending by gov. bonds. In the U.K., the English Central Bank has directly bought gov. bonds, as can be seen here
BBC Finance March 4 2021
ruclips.net/video/G6EWcZvLivY/видео.html
Now, if you consider that the central bank is just another branch of government, and this is where the debt papers are, the state owes the money .... to itself (which is essentially what is being said in the BBC video and which may beg the question why one should issue debt papers to oneself).
There is a former FED chair who expressed thoughts very similar to proponents of MMT today (see below).
en.wikipedia.org/wiki/Beardsley_Ruml
"He also served as a director of the New York Federal Reserve Bank (1937-1947), and was its chairman from 1941 until 1946;
(...)
In 1945, Ruml made a famous speech to the ABA, asserting that since the end of the(...) gold standard, "Taxes for Revenue are Obsolete". The real purposes of taxes, he asserted, were: to "stabilize the purchasing power of the dollar", to "express public policy in the distribution of wealth and of income", "in subsidizing or in penalizing various industries and economic groups" and to "isolate and assess directly the costs of certain national benefits, such as highways and social security". This is seen as a forerunner of functional finance or chartalism."
www.huffpost.com/entry/taxes-for-revenue-are-obs_b_542134?guccounter=1
..[with an] inconvertible currency, a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue… It follows that our Federal Government has final freedom from the money market in meeting its financial requirements… All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.”
Beardsley Ruml, 1946
PDF: Facsimile of the original article of the speech by BeardsleyRuml in Newspaper "American Affairs", Jan 1946
web.archive.org/web/20200414003001/www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf
And yes, I would add the taxes my be "obsolete for revenue", but they are of utmost importance to make a currency work. Any government that stops collecting taxes will ruin the currency very quickly. This has been experienced e.g. by the government during the American revolution with the 'Continental' Currency.
@@markusstrunz446 I am addessing your points singularl . Firstly the idea that taxes are of the utmost importance to to make any currency work. This is not true and easily disproved by factual evidence rather that taxes did Nothing to get acceptance or keep the money in any working order. Even their own governments dumped it in all of the countries over the past 80 years where infaltion resulted in the failure of the currency. That is undeniable historical fact rather than someone's opinion. The other present reality is crypto currencies work without any taxes at all. So currencies don't even need taxes to work. .
@@markusstrunz446 You say "Now, if you consider that the central bank is just another branch of government, and this is where the debt papers are, the state owes the money .... to itself (which is essentially what is being said in the BBC video and which may beg the question why one should issue debt papers to oneself). ".
The reality is that you cannot just notionally say the central bank is the government because the reality is the central bank is Not the government in the US or in the UK or in nearly all other advanced countries.
It is just as you cannot say taxes are destroyed because it is Not the case and the evidence shows that just as the historical facts show that it was not so.
If the central bank just marked up numbers on the computer to produce more money without recording it as a debt the situation would be exactly like it was in other countries which operated that was and sent their currency went broke because it was not representative of real goods or services at all.
Also if you were of that opinion why would you not let the private banks who create most of the money today do the same thing instead of insisting people pay back money they borrowed?
@@Rob-fx2dw
Well, actually, private banks can only create create money because they are given the privilege to do so by the government. So the rules for banks are actually made by the government /the state, and these rules state that the borrower has to pay back the credit that he/she took from the bank. You could also complain, why can the government print bank notes, while I as a citizen can not do so, this is so unfair! Actually this is the case because the government made laws that say "the state can, and you, the citizen, can not do so" (or you will be sent to jail).
You should have a look at his post.
www.pbs.org/newshour/nation/the-good-you-do-for-the-dollar-when-you-pay-your-taxes
"... Bitcoin can buy you plenty else, you cannot send crypto-currency to the government. (The IRS recently announced it will treat Bitcoin as property, not currency.)
(...)
Have you ever wondered why the U.S. dollar has value? It is not because of the gold in Fort Knox. There used to be gold behind the dollar, but not now. President Richard Nixon cut the last ties in 1971, effectively ending the foundation of the Bretton Woods international monetary system. Rather, the ultimate reason that the U.S. dollar has value, at least in the opinion of some economists, and in my own, is that no one likes being in jail. And dollars are a get-out-of-jail-free card."
@@markusstrunz446 So you understand that private banks actually create new money. In fact they create Most of the money in the system and don't need government to do that.
Some countries don't even have fractional reserve requirements having done away with them last century - many years ago. So you don't need money government created to pay taxes which destroys Mosler's claims about need in government to issue new money to pay taxes. You can pay them from borrowed money as most people do.
Putting people in jail does Not put value into money which is simply understood if you realize "value" relates to what goods or services money can buy and nothing else.
It's sheer idiocy to believe that something can make itself more valuable - as someone once explained it is believing like you can pull yourself up by standing in a bucket and pulling the handle.
LIE
Ok, one more time I am going to write what Stephanie Kelton is basically saying: Because the Federal Reserve has the legal ability to print an unlimited number of dollars, we should stop worrying about how the government will “pay for” the various spending programs the public desires. If they print too much money we will experience high inflation, but Uncle Sam doesn’t need to worry about “finding the money” the same way a household or business does.
Ok, on more time. No.
Oh sheesh, this garbage again. I thought we killed this off in the late 1980s.
What a bunch of nonsense.
Lies that MMT spreads. " One of us issues the currency - they do" and "you and I are merely using the US dollar". Wrong from the start.
First User of the US dollar is the US government itself which spends newly created dollars to gain real goods and services before anyone else in the private sector of the economy has the opportunity to do so. It competes with the Private sector which is you and me for goods and services.
The representation of Government sector deficits being Private sector saving is just a ploy. Wrong and deceiving use of language combined with misused concepts.
That is because Savings in the private sector can Only come from spending less than one earns no matter what the federal government has spent.
You will note that in the chart showing the sector spending Kelton does not claim that private sector or debt causes government sector savings which it would if she had a realistic chart.
It should be so if it is a real balance since in all balances there is a flow each way. She only claims a one way flow - No balance there at all. Again misuse of the concepts by a biased view of omitting reality.
What happens in reality is the flow of goods and services To the government sector which is the true balance she claims to flow from only government to private sector.
pimliconz - It seems from your comment "Air-head" that abuse is the only thing you can offer as a comment. Not constructive at all.
That being so then you need to see someone like a psychologist who can help you with your childish response to a verbal challenge that challenged you to actually think.
Of course the bright side for others on this forum is to now have a demonstration that you are that way inclined rather than intellectually capable.
The first point (re consumption of real resources) is a cornerstone of MMT i.e. govt should only create the dollars when there's spare capacity. No counterargument there.
The second confuses debt between entities *within* the private sector (households, firms etc) with the aggregated debt of the private sector as a whole - where the sectoral balances thing is necessarily true as a matter of accounting identities.
Rolfus. The aggregated debt is not something that is meaningful in terms of proving that a debt created by one sector is a surplus of fiat money in another sector since that so called surplus has to be paid for by the people in the private sector because they are the sector where production of goods and services occurs. That surplus of fiat money is not increased wealth. All it represents is control over existing goods and services taken from the private sector and placed into the hands of politicians so they can spend it according to their own politically motivated schemes.
The whole point of accounting is to have a balance not a surplus since surpluses in a macro economic sense are not profits.
The point about capacity is so doubtful as to be irrelevant since it cannot be assumed and the detection or belief in under capacity makes so many assumptions that it is just in the realm of fantasy.
One only has to ask at what price is under capacity in any industry assumed and because capacity is related always to price and for that price to be established for whatever is produced. It is the price demand supply equation on the input and output side of any business that determines an industry's capacity and that fact negates any accurate estimate of supply capacity. Nothing without a correct accurate but almost always unattainable knowledge of true under capacity should be used to ascertain anything related to economics.
@@Rob-fx2dw Insofar as I can tell what you're on about, this just seems to be the old "crowding out" argument, ie. that govt spending diverts real resources rather than deploys unused ones. If/when that happens you will see inflation and govt (in an MMT world) would cut spending. Simple as.
Fuck off, Rob. Just....fuck off.