The MMT Debate With Dean Baker & Randall Wray
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- Опубликовано: 12 май 2019
- We continue our series of discussions about Modern Money Theory and funding the Green New Deal with host Paul Jay
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Please bring on William Black, Steve Keen and Stephanie Kelton also. Great debate.
sure, but wray and mosler are best of the best.
Kelton describes MMT economy like a bathtub where the water line is like desired GDP level.
Drainage is:
savings-taxes-imports
Water Faucet is:
investment-gov't spending-exports
Bruce Behrhorst the problem I always have is that resources are rarely ever mentioned. I work in construction and if their isn’t lumber, tools and trucks, nothing is getting done no matter how much money you have.
Banks and businesses already expand the monetary base with credit, which is the supposed problem with MMT and government spending in general. The difference is priorities. The government spares no expense for endless wars to control oil, but they underfund, mismanage and privatize infrastructure and public services.
banks and businesses do not operate without profit. but of course mmt understand priorities, no one is denying that. neoclassicals deny that govt is currency monopolist. that is the biggest difference. private sector cannot muster resources without profit, govt can through taxation.
martynas aukst money isn’t resources though.
Both has their positives and negative. Yes can can argue the war was a waste of resources or not a good use of resources. But government also spend on non profitable things that help the economy, like research, infrastructure, police... Private sector would not invest in areas that are non profitable. Private sector are also good and bad at allocating money. Housing bubble, stock market but they also provide capital for business that people need that make a profit. It shouldn't be one or the other, but with government people have a choice of who they elect, they don't get that choice in the private sector.
Hey, Dean Baker, in my youth I worked construction. Back then you went where there work was, you didn't wait for it to come to you. Oil field workers in the Dakotas are not just the locals, the lead workers are all imported to the site. You conflate the paradigm of the worker with your own largely stationary existence. Building infrastructure through remote places is very different from commuting to the office every day.
Totally agreed, I think Baker doesn't understand the crossover in skills that many of these jobs have. And if the workers don't have the skills, that's what training is for. I would assume that if a worker was hired to work on the Green New Deal, then like the same government job I got, they would be paid and have employee benefits right from the start, even thru training.
Baker is useless. Listening to him on other clips he never seems to get what's going on.
I think in coal country many men and women have DIY skills (rual area). They also have the work ethics of an adult. In Germany and Austria the apprenticeships last 3 - 4 years. But that is for hormonal 15 - 16 year old teenagers, and the saying goes, the first year they cost you, in year 2 your break even, in year 3 you profit from them.
Costs: include: 5 weeks vacation, the 40 days for public trade school, the free paid holidays, the sick leave, and last but not least the compensation they get for their work (less than minimum wage but still), and wage related payments for healthcare, retirement - it all adds up.
A mature adult does not need 3 years to become a qualified electrician or plumber or carpenter.
You take persons with DIY skills or determination that take easy to learning of theory and are good with practical work and train them 6 months intensely and they know their stuff.
Moreover they can show up in pairs for the installations. One experienced person and one trainee. Noting like a motivated person a committed teacher and on the job learning.
@@xyzsame4081 True, that's how medical training works, too. A significant problem with urban and suburban kids is the schools no longer require the industrial arts. Subdivision life instead of farm life. When I grew up a shop class was required every semester through junior high (3 years then) and still available in high school as electives. I learned woodwork, metal work, printing, auto mechanics, and electrical work the same way I learned in chemistry, biology and physics. In the lab. Today they don't want you to learn, just read and recognize enough to pass a multiple choice test so you can be moved on. It's sad.
Xyz Same in my opinion, you have it backwards. I think a teenager picks up skills much faster than an adult does. I teach at a tradeschool and I can tell you that it’s very obvious when someone just isn’t going to “get it”. It’s one thing to learn the theory in a class but experience is the most important thing when you have to apply those skills in the real world. I think half of the students that graduate from trade school will never truly succeed in their trade. That isn’t to say the won’t get hired but too many people just bounce around because their work never cuts it.
Yes, both agree that in 2010, MMT could have been implemented to repair the environment, but instead we did what was best for our financial and political masters, the bankers' and wall street's greed.
Dude get it right its the "Banksters"
@@HuevoDuro702 I was going to say swindler, fleecer, bilker, and con man.
Dude get it right.
It's not the bankers.
It's the system of debt-based money.
MMT does nothing to change that.
Nothing.
Just shows it through a different lens.
LOL.
@@joebhed1 You can never get away from the debt-based system, unless all labor is free, then the economical result is that everything will then be free. MMT is attempting to make the rules fairer away from the tilted advantages for a limited section of the population.
I have no idea what Wall Street greed and political masters means. You just said nothing. The reality is the Obama administration passed Dodd-Frank and discouraged lending at the worst possible time. Lending should have been counter cyclical and dramatically increased after a fall in asset prices. Your take is the kind of glue sniffer, know-nothing take that scares the hell of people with functioning brains. If you ever blame greed for anything, you've lost the argument.
If there is no green new deal,we need the infrastructure of this country repaired in a bad way to start with.
Great piece Paul, thanks for the debaters for such a nice and informative discussion, in my opinion Dean is assuming too much on future outcomes without presenting anything to support those arguments. My question is about changes to the banking system that would help with bringing MMT policies to fruition. Warren Mosler is a great speaker for MMT and has some very clever policy proposals.
How are you going to pay for it? I really don't think that's the question to be asking with a proposed 750 billion dollar national security budget.
You got a problem with the Budget, Daniel ?
Read Treasury's Annual Report.
It's all in there.
The $700+ Billion in spending, and $ Trillion + in new debt income proceeds.
So, what is the question ?
You don't believe the Treasury(?), or the Gov Accountability Office that audits Treasury's Financials ??
For OUR Public Money System Commons.
Wray: This is what MMT is.
Baker: I agree with all of it.
Great debate.
Yes- It is about as lame as the MMT theory itself. Totally lame idiotic beliefs based on poor observations and even poorer reasoning which has al failed before..
😆
There is a difference between something being sound logically and it being applicable or practical.
I don't see how the resources in the switch over would be all that different. I've worked in the petro chemical industry and in solar power industry as an electrician and there's very little difference qua skills. Also there's not much discussion about hydrogen power in the green new deal, when 20 yrs ago there was talk about transitioning to a hydrogen economy. Hydrogen is a gas, and therefore transported through pipelines. The same infrastructure as natural gas or oil. So if its basically the same infrastructure, how are the skillsets of people going to be so different? We'll still need pipefitters, mechanics, welders, electricians, instrumentation technicians etc..Also I can't seem to remember the controversy when we switched from coal to natural gas. Nobody seemed to care too much about costs then! There the infrastructure changed dramatically.
It's become very political. If the left proposes it, the right have to be against it. Once that happens misinformation gets shot all over the place.
Now, this represents a real 'grown up' discussion about taxes. The bullshit that passes for debate in the MSM is at the playground level of 'he-said-she-said', or, 'is to - is not'. The public continues to be woefully disserved by those clowns.
When it comes to funding banks or the military industrial complex, there is no debate here. Why is it that the use of MMT becomes a debate only when it is suggested we use it to fund things for actual US citizens rather than corporate interests?
This is it exactly! Instead of having to raise taxes to free up resources, why not try defunding all these regime change wars. Why not change the tax laws so that multi billion dollar corporation is like Netflix and Amazon can’t get out of paying taxes in the US? Why not stop spending money on nuclear weapons we’ll never use (if we do, nothing matters anyway)? Why not raise taxes on the top 10% who currently have a plethora of loopholes to get out of paying taxes? Why does the burden always have to fall on us, the working class?
Being in favor of all your social spending requires our military protecting America's exorbitant privilege. U cannot separate the 2. U are defacto pro-war.
@@robe_p3857 - That's a load of garbage. You either know this and are selling it or you have been fooled. At any rate, whatever helps you sleep.
@@georgejohnson7265 U are just focused on your free stuff. Your free stuff is paid the same way war is payed. With printed money. How do we maintain our ablity to print the world reserve currency? Mull it over
@@robe_p3857 - You have no idea what you are talking about and are a waste of time.
Thanks for your time and effort. Just what is the role of interest rates in MMT?
None of these debators discuss the fact that COMMERCIAL BANKS CREATE OVER 90% OF THE MONEY WE USE BY CONVERTING IOU'S INTO CASH
Thank you!!! #MonetaryReform #NotMMT We will be spending MORE on interest payments in the next 3 years than we spend on our bloated military!! This is an issue- and MMTers ignore that fact that central banks (the FED) ISSUES our currency with interest!!! The amount of we owe will always be more than we have in circulation- this is a DEBT-BASED SYSTEM THAT SERVES THE BANKS!!! It's a system of EXTRACTION!!! We need debt-free sovereign money!!! Backed by renewable energy production instead of the petrodollar!!! That's how the Green New Deal would work- otherwise they are setting us up to fail!!!
Nope. This notion is fraud perpetrated by cranks.
Banks are licensed to create *credit* denominated in the sovereign money unit.
But it is net Gov Gov spending which provides the unencumbered net savings in the economy.
Netting out what Gov owes to itself from the $20 trillion headline figure, those net savings amount to roughly $14 Trillion at present. Approx. the same amount as outstanding banks' created credit. But note again, Gov issuance is *issuance*, unencumbered by any liability to repay, in contrast to bank created credit 'money'.
@@tabithaenriquez1330 I am glad you take an interest in monetary theory but there are a lot of misinformation out there. Learn to read data and specially the money aggregates.
Most of the money we use, over 90% of it comes from Commercial Banks like BANK OF AMERICA. What they do is to take a sign promissory note from someone looking to get credit and use it as if it cash. They deposit the signed promissory note (cash) and converted it to an expendable check which is then handed to customer looking for credit. The commercial bank did not put any of their money in. What they do, then, with the profits is to buy treasury bonds, controlling interest in most major corporations.
You are correct to say it is a debt based economy, but it can still function because, although they only create the principle the interest can be paid with the velocity of money. However if the loans are too fast and extensive the VELOCITY OF MONEY becomes ineffective and the economy comes tumbling down. Then bankers knew of that phenomena back in the 1830s
@@real1t1ychek Thank you!
@@tabithaenriquez1330
Thanks so much.
As our song goes ..............
" then, join the Alliance For Just Money."
www.monetaryalliance.org
Learn the song.
joeB
A unit of currency represents trust and integrity in the checks and balances of a country. Big macro-sized problems emerge when a government defrauds this metricized index of accountability. Which they do by injecting extra dollars into the pool with zero accountability for how they got there. It usurps the checks and balances. Which are fundamental principles upon which the prosperity of a country depends upon. And that relationship is always kept to a highly precise point of pain. _Bad things always happen_ when any agency--governmental or otherwise--seeks to bilk this cyclical trade of trust tokens with full impunity.
As with the WW2 response, the nation must be fully committed to the cause of decisively 'winning' the AGW war.
Losing through 'half hearted measures' is not an option - for it means extinction of most life, perhaps within a few centuries.
Therefore, if inflation presents a problem during 'mobilisation' of resources rationing of scarce/polluting resources; 'eco-bonds' may need to be issued (as per war bonds) to sequester spending money from the economy until after the climate is stabilised. Government requisition of essential industrial plants and firm redirection of manufacturing into clean energy development must also be applied.
We simply cannot afford to lose this climate war - a loss is certain extinction.
How long the solar panels and their batteries last ?????I heard it was about 10 years . Then how do we recycle them ?????
Last ten years - Maybe but recycling them is not a financially viable option presently. they are just more pollution.
IMO, the key question is does the spending create jobs and, therefore, additional revenue in return? I've read such spending can generate up to $6 in taxes for each $1 spent. That makes such a program worth the money.
When deficit spending is actually investment, it makes perfect sense. And business does this all the time!
Looking at the state of aquifers in the USA those pipelines are going to be needed to transport desalinated water to restore food production......Tulsi 2020.....
I don't know why there would be any worry about full employment and inflation. There are millions of people in South America that would love to work and live here.
Everything discussed here makes perfect sense but as long as the GOP, whose main function is to make the rich richer, remains in power it will go nowhere. If this country finally wants to move forward again it has to get rid off of the GOP and its Democrat corporatists.
That’s the problem, both parties work for their corporate constituents, not the people. Anything that benefits the people will never get any traction in our political system. Only those things that help the rich get richer are of interest to our politicians because it’s the rich who buy them their seat in office through campaign funding and other benefits. We can’t do that so we have no voice
Dean Baker, in 1942 we (my parent's generation) did do these things virtually over night. 1940 GDP was $103 B monetary base (mb)= $43 B. 1941-1945 WWII cost $300 B = ~300% GDP / 4 years. By1945 GDP was $228 B mb= $260 B. For ~300% of GDP over 4 years we > doubled GDP, build the 20th century American industrial base, and won WWII. Today: 2018 GPD $22 T mb= $22 T. GND cost $16 T / 10 yrs = $1.6T per yr or ± 6.5% of GDP for the next 10 years to build a new 21st century American energy and physical infrastructure, and a modernized industrial base. But instead of 50% of GDP per year to save our asses, the GND will require only about 6.5%. Cheap at many times the price!
What are your speculations on the employment situation of the average worker post-automation and in a renewable energy economy?
Question: Given that raising taxes is politically unpopular, would it be better if Congress set up a "skeleton" of progressive taxation brackets (with each additional dollar of marginal income being taxed at an increasingly higher rate); and then, when it appeared that rising inflation was becoming a risk, the Federal Reserve (or an independent fiscal authority) would not raise interest rates but would instead bump up the value of a mathematical *scaling parameter* to increases taxes according to the progressive taxation framework that had been pre-specified by Congress? Is there some other way the Fed can discourage the private sector from using loans to expanding the supply of broad money, besides raising interest rates?
Another question: How can we target inflation that arises in a certain sector of the economy? Currently, the tools we use to control inflation will hit the entire economy with a sledge hammer, even when the source of the inflation was from a bottleneck in a single sector.
Third question: I know that giving money to poor or middle class people is more likely to stimulate demand, because poor and middle class people are less likely to save (and hence more likely to spend) any additional income. Conversely, if the government wants to reduce demand to control inflation, then taxing, say, $1000 from a rich person would be less effective than taxing the $1000 from a poor person (because $1K would probably just come from the savings of the rich person, whereas the poor person would have spent the $1K)? So to effect an equivalent reduction in aggregate demand, a tax on a rich person must be larger than a tax on a poor person, generally?
How do you "only" save 3.3% on Medicare for all? That assumes that prices with hospitals, doctors and so on won't be renegotiated. The UK only pays 7% of GDP on healthcare. I know that Dean Baker is a huge critic of doctors' salaries, so if most of the country can't afford healthcare anyway, we should cut it a lot more than just 3.3%.
The problem MMT proposes to solve is rooted in an economic system that strongly gravitates towards extreme income inequality, but I haven't seen anything from MMT proponents discussing this particular topic. Can you explain if/how MMT can be used to solve inequality?
Sure, I'm not a MMT expert by any means, but what I understand is that MMT essentially is a tool that takes away the question of "How will we pay for it?". So, if we take that question away (which is usually the biggest hurdle to any social program that helps people, used by politicians from both parties) then there's no real reason why we can't fund actual programs that combat inequality like Medicare for All, the Green New Deal, the Job Guarantee, tuition free college, etc.
Dude,
MMT is just a lens.
If you look through that lense, a lot of this inequality concern evaporates.
MMT wants MORE financial assets from government debt - with the Millions taxpayers paying interest to the one percent bankers.
MMT. The "What? Me worry? about inequality" of modern political economy.
MMT is a fog-shrouded confidence trick dreamed up by banker Mosler.
Coming to end around the next bend.
Why does Real News consistently invite Dean Baker after he's been sniffing glue all day.
the framework for MMT is one that doesn’t really consider the internationalists nature of modern economies and it works from a model where the debt is at zero.
I never hear MMT proponents talk about foreign holdings of currency or bonds, nor do they really discuss the massive debts that already exist ever being paid off.
Putting up solar panels is much easier to transition to than learning to code. The next move is to manufacture quality solar panels in this country and protect the jobs of American workers just like our leaders protect intellectual property and copyrights of upper class people.
That is important - a country CAN create new money - if they ALSO CREATE more goods and services IN the zone where the currency is used. After all money is used to exchange goods and services. If you take the creation to the next level it is legitimate to inject more money into the economy to have the NECESSARY money volume to facilitate the exchanges.
(people get jobs because of the investments that puts money in their pockets to have those economic exchanges).
Either banks give out loans and create the money - it is called "Fiat" money - the Latin expression for "so be it". Banks are the gatekeepers: for consumers spending on large expenditures, or homes or for companies investing.
OR the government creates money directly with help of the central bank (as they did with QE for the banks. The banksters however do not want the public to understand either method of money creation, and they certainly do not want the government to create the money. No interest for them and no revenue for them either. that only happened in times of crisis, like war - or before big finance was invented - in Britain in 1200 with the Tally Sticks, or in the American colonies with colonial scrip).
Then government injects it into the economy it by spending it (on infrastructure, research, education, ....) Then the people that are thus employed and get wages f spend their wages. _Prefereably also a lot on things created IN the country._
If you inflate the money volume and purchase good created outside the country (and that can happen in the 2nd round when the wages of the Green New Deal workers purchase a lot of Chines and German goods) than it dilutes the value of the dollar.
As long as the Saudis purchase U.S. bonds or hold those they already purchased. But that gives them undue political power on the foreign policy of the U.S. . And when the U.S. Europe Japan fade out of fossil fuels they lose a lot of revenue.
so the USD that now has the undeserved status as world reserve currency would fare like any other currency where more money is "printed" (not really it is digitally created) than is justified by the goods and services that economy creates.
An economy can of course import plenty (every economy does) as long as they export about the same. that of course means something must be created IN the country that is attractive for the citizens and companies of other countries (operating under other currencies).
You do have to think about different sectors & localised inflation - thats an important part of #MMT as I understand it - for example they pumped how much into wall street? a lot more than $500 billion & inflation went nowhere. To me #MMT means having a detailed look at inflation overall but also sector by sector.
Noss Cern this is what I keep saying as well. MMTers rarely talk about resources and it drives me crazy.
U can print but u can't add purchasing power
Sorry, Thomas.
Of course, anything budgeted creates a spending demand for the money, which imparts dollar-for-dollar purchasing power.
Like the rest of the money.
No inflation concern at all.
MMT is correct about that.
They get wrong - how to pay for it.
For the Money System Common.
@@joebhed1 inflation is an increase in base money supply. MMT will he awesome until the rest of the world stops exchanging finished product for fiat debt job notes. This is the greatest Ponzi scheme ever! Thats why dollar has lost 98 percent purchasing power. Because of the ability to print paper with nothing backing it. Consumers are going to lose confidence , especially when cash falls from helicopters. All digital illusions of wealth and Fiat Ponzi scheme will come to an end! Gold and silver are money everything else is debt. MMT sounds great .like the whole world sitting around mining CRYPTOS and nobody actually working and producing anything.its another banker pipe dream.I pray daily for humanity to freed from these lies and delusional theories and all central banks slavery and usury comes to end!
the dollar has not lost 98% purchasing power , nor has the yen, if you've heard or read that some where I'd like to know where, maybe i'm missing something
@@davelind3177 brother u can Google it anywhere. Since 1913 when our money turned to currency the dollar went from 1.00 to .02 !!! It's a fact!
@@thomastheram5331
Sorry, Thomas.
Just too many uninformed rabbit holes
there for me to chase.
Good luck.
How does the government go about spending this money? Gives it to firms that are building solar energy? Starts its own company? If the government were to print money to build something shouldn’t the people own shares somehow in the project. It isn’t fair for the government to say print money and give it to certain private companies who get the profits over other companies and the profits don’t go back to the people
Loved the debate. Some points about resources not mentioned: 1) Labor force participation is down from 67% (1999) to about 63% (today), that translates into a figure of up to 10 million workers who could be in the labor force who are not--no mention of this; is it not a factor? 2) I was surprised to learn that no less a figure than Milton Freedmen pointed out how the government could pay off its debt: just pay the bonds when they come due with printed money but also at the same time control the banking fractional reserve ratio so as to limit the amount of money private banks can inject into the economy through bank lending. This would raise interest rates and put downward price pressure on asset prices. Would this method also count as a method of freeing up resources, but without taxing the population directly? It would require direct control of the Federal Reserve system and significantly end Fed independence. Finally, Steven Keen and Michael Hudson have pointed out the the problem with debt is that there has been a strong tendency confirmed by historical experience going back to ancient civilizations that debt burdens tend to rise faster than the ability of an economy to carry the debt load. This is a big reason why we go through economic collapses and need a monetary system that can efficiently write off bad debt so as to re-start economic activity ASAP; any thoughts on reforming our banking system to make public control more of a factor?
Sorry, Charles
I think you misunderstand Friedman's epic "public fiat money' piece, his 1948 paper on "A Monetary and Fiscal Framework for Economic Stability" .
None other than Wray has written most of its paltry criticisms ???
But the idea that Friedman was backing IN '48 was the same advanced by progressive political-economists like Henry Simons who developed the Chicago Plan for Monetary Reform for FDR in '33 , and also Princeton's Irving Fisher, who wrote his books on 100 Percent Money and co-authored the 1939 Program for Monetary Reform- the most popular reform proposal ever ...... for economists.
Point being that the reserve balances were irrelevant to the money creation power which would fall back to sovereign issuance via spending, as provided by a Monetary Authority.
There would be no shortage of money.
The intent of the Fisher paper that preceded Friedman's by a decade was ""to end the lawless variability of the supply of our national circulating medium ..."""
That was accomplished by a lawful RULE for money creation.
So, no shortage. And no interest rate hikes.
Thanks.
@@joebhed1 Thanks for obfuscating something which ought to be really simple--you seem to have take John Maynard Keynes to heart! "Point being that the reserve balances were irrelevant to the money creation power..." The point is that the Federal government can spend money into existence and limit the inflationary effects of doing so by limiting the power of the banks to inject money into the economy through bank lending. "That was accomplished by a lawful RULE for money creation. " Which is precisely the point again, to change that rule so private banks get to create less money into existence so the Federal government can create more money into existence than just coins. BTW, here is the economic justification for the Federal government spending money into existence: government services have value and add to the economy either directly or indirectly, therefor it makes sense that the government spend more than it takes in by simply printing some of the money and spending it into existence.
@@charlesloucks1840
I have no idea why you would think that I don't already know ALL that you wrote that's true, factual, law and science.
I do.
But.... GAWD. Not here.
"Which is precisely the point again, to change that rule so private banks get to create less money into existence so the Federal government can create more money into existence than just coins."
LOL
I hope Charles DOES NOT THINK that MMT proposes to change ANY laws ..... or to reform ANY institutions ..... OR to democratize the money.
Because they ain't all in for that.
That's why they give you their lens.
That's ALL you get with the status Quo creepy MMT memes about money.
They want this country to continue to use the private bankers money OR they would propose the LAW, or the RULE, needed to make the Bankers stop issuing their money.
Which is what we "PUBLIC MONEY" advocates have been pushing for going on a hundred years now.
Learn.
Then, join the Alliance for Just Money.
monetaryalliance.org
For OUR Money System Commons
I havnt heard any debate only established respected economists saying it's absolute bullshit.
Can you explain the macroeconomics underlying the job guarantee?
buffer stock, like wheat buffer stock. set the price, let quantity float.
Nice
By "resources" they mean "people." :( And by the way, you can't use fiat money for war or UBI or welfare. You can use it to build infrastructure assets and to trade it for products and services, but not to destroy infrastructure or to pay people to be idle. Too many MMT advocates want to keep fractional reserve banking and its unsecured debt practices. :( Too many MMT advocates want to keep using material resources as the same increasing pace rather than slowing down.
The key element that is missed in these discussions is the quality of investment. If the quality of investment is high then it is essentially self funding, by which I mean that there is already $Trillions of hot money that would flow towards a reasonable Ror.
A second factor is the degree of risk. Building a new highway, may have a low Ror but also low risk. Building a bridge may require a higher Ror because of the risks. Even more so is say a nuclear power station. A major factor in the use of infrastructure spending as an economic weapon is the drawn out and high risk planning process, which could result in expenditure long after the need for it has passed.
2 questions , why didnt japan get inflation when they printed money for 20 years , did QE create asset inflation in real estate and equities?
in regards to japan how does their offshoring manufacturing ,increasing productivity, demographic shifts , savings rate , and trade surpluses, effect inflation , which seems to be the main criticism of the theory. it seems to me that japan is the argument against inflation , but how ?
Real news thanks so much for having another debate on mmt. This is very very important that people understand how our economy actually works. Thanks again
What do working families need to really get about this situation of budget and how it differs from their own day-to-day making ends meet?
I feel like, this concept of finding money feels pretty fringe to people whose lives hang on working two jobs per adult in the household and healthcare coverage by GoFundMe campaigns.
What I am looking for is a way to talk about paying for and enacting a Green New Deal with my extended family and everyone as concretely as I could talk about one of us needing to pay for cancer treatment or college. Because a Green New Deal should be like both of those combined for every one of us.
John Kenneth Galbraith once wrote “The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.” I think of this when I think of MMT. On one hand the MMT crowd acknowledges that Banks do not lend from deposits. They acknowledge private bank endogenous money. But then they claim that "THE FEDERAL GOVERNMENT IS WHERE THE MONEY COMES FROM". So when we actually look at data we see the the M0 (which is government created) and the M2 (if you subtract 1.70) you find the endogenous money that the bank created. Are they trying to explain this difference using the Fractional Reserve Lending money because that was debunk decades ago? I believe that MMT is another ideology meant to confuse the public. They are paid shills to misinform and keep people off the track to what is really happening.
So what is really happening? Bank of America et al are creating over 90% of the money stock with absolutely no supervision from the Federal Government. This is highly illegal as the constitution gives only the congress the power to manage the nation's money supply. Please refer to article 1 section 8 clause 5.
@@bamboozled1618
You got that right, BB.
MMT is all-around , overall, Bass-Ackward.
Interesting enigma at work here.
BB - “The government does control the supply of US dollars …………….but, they don't have complete control.” And
BB - “ If banks create money ex nihilo, ………………….. then the money supply is growing endogenously.”
Endogenously means out of control.
So, which is it. Either we have an out of control private
money system of bank issuance, OR we
have a money system where “ the
government does control the supply of US dollars. “
And why does one (Banks) control the supply of money , and one
(Gov) control the supply of dollars ?
An MMT conundrum.
Keeping you j..u....s...t off-balance.
The Fog Around the Money - MMT.
For OUR Public Money System Common..
In principle, MMT is a good idea; and, within the bounds of current common sense definitions of "sovereignty" and "government", makes perfect sense. The "problem" for MMT, however, is the definition of "national sovereignty" as distinct from modern monetary *reality* as exercised by the current powers that be. Historically, "national sovereignty", and even "nationhood" itself, is an outmoded 19th Century concept based on the historically very long-standing royal prerogative of the "Divine Right of Kings". Just replace the word "kings" with the word "nations". That is not really a solution. Real "sovereignty" should rest with *the population*. As of now, with the emergence of "Globalization", it is the trans-national "corporatocracy" that *trumps* any particular localized "national sovereignty". So really, the US is only "sovereign" on paper. As evidence, look at the modern monetary *reality* of the petro-dollar and the current condition of the *vast majority* of the population of the US. Under paid, under pressure, under siege, under water from their own "government". Same with the population of Earth. Under occupation of the Military Industrial Complex. Thanks.
The very idea that there are unemployed resources being Idle Capital that needs to ne brought into use to improve the GDP is just too simplistic to be taken seriously.
The reason it is that it ignores the various reasons that resources are idle which includes that their lack of relative efficiency in the market on cost/ benefit basis has already been determined by the economics of their situation. Examples are out of date machinery that is superseded by newer machinery and natural resources for which a newer product has made uncompetitive on price basis or quality basis. The reality is government does not know what is uncompetitive or less efficient or an out of date process because government is not in the business and in the game of knowing.
So it makes the idea a very doubtful idea that includes politics and most probably will fail for those reasons alone at a huge cost to the economy.
Keynes warnings and policy of having a high deficit budget after WW2 to accommodate the changes in employment after returning from war jobs overseas and at home failed miserably after the budget was cut and the predicted bad results did not materialize.
So long as MONEY is Referred to as MONEY nothing changes. Call BITCOIN Money or SDR as Money it is all MONEY & Money Corrupts & gets Corrupted Absolutely.
Bring in Doug Henwood to talk about this, please.
lol
Yes, Doug Henwood or marxist economist Michael Roberts
Printing money is why our dollar value has decreased 98% since we started this fiat currency experiment. Our wages havent kept up with the inflation so our standard of living is decreasing eliminating the middle class. How is expanding the practice of printing money going to make things better? Isnt Doing the same thing over and expecting different results called insanity?!?
Wayne,
While one or two percent annual 'inflation' should not be necessary, and zero inflation should guide monetary policy, that has zero to do with whether we can afford climate and infrastructure repair, concurrently. It's only a resource limitation issue.
The government SHOULD create the money it needs for spending, and not allow the banks continue to do it, and then the Gov BORROWS our public needs.
THAT right there is the REAL solution from the MMT lens.
How it works.
Status Quo..
MMT's lie is its PRETENSION that anything would change under MMT.
How can it?
It's just a lens. It BENDS how we SEE things.
To warp your logic and proportion.
As should be obvious in these MMT comments.
For OUR Money System Common.
Read Frederick Soddy.
Not Mosler.
Randal needs a chance to respond to that last point by Dean. But otherwise, great discussion. Thanks TRNN!
We have plenty of underused capital in the Budget already given the poor return from Defense and Homeland programs. Look at the zero value of the Nuke Modernization at $50 billion/year. Tax reform to restore rates hopefully to the 90% max and 100% of Huge estates will provide any funding needed. Considering the fact that the Green New Deal programs must be done sooner than later this should begin with the new administration in 2020!
Den,
I know you must be a lot smarter than me, because I read what you wrote ....
"" We have plenty of underused capital in the Budget already given the poor return from Defense and Homeland programs.""
And I need to ask WTH that means.
'the poor returns from Def and HS ??'
Thanks.
Den,
I know you must be a lot smarter than me, because I read what you wrote ....
"" We have plenty of underused capital in the Budget already given the poor return from Defense and Homeland programs.""
And I need to ask WTH that means.
'the poor returns from Def and HS ??'
Thanks.
@@joebhed1 Sorry, return on investment. GDP goes up by about 1 for each dollar spent. There is also an argument about the bloated budgets vs the relative threat wastes $. Cut the pork and invest it in the high multiplier (5-1) programs like infrastructure.
Why is printing money to bomb iraq, afghanistan, libya, vietnam, syria, grenada, potentially iran, venezuela ok? But printing money for health care, roads bridges, college, social security such a big deal? We are supposed to trust politicians to do the right thing with the printing press? They have been printing money like mad since at least 1971 and now student loan debt can never be repaid. Homes cost 10 times average income. People work two three jobs? I am not sure what the answer is but i will take individual freedom and market based money over government monopoly and money for nothing.
America is the second largest manufacturer in the world and 6th by per capita. i suspect that that is what the value of our currency rests on ,why shouldn't the growth of the economy be reflected in the growth of the money supply ?
Dean baker is making it seem like we have very low unemployment as his basis for this inflationary pressure and he’s wrong if you look at the U6 unemployment figures there’s roughly 8 million people unemployed. The US capacity utilization is running at 74% and our trade deficit is about 500 billion. What is he talking about inflation like it’s it at the doorstep of the US. It’s not. The how are you “going to pay for it” ridiculous question is by congressional appropriation, congressional authorization and crediting the appropriate accounts at the central bank like we do for all federal spending.
MMT only works if people ontinue to accept dollars as a store of value. Currency value is driven by demand as a store of value. This value is typically driven by demand for a nation's exports. In the case of the US which is net importer this demand is created by use of dollar to finance international oil market. If the dollar is ended as reserve currency then US has massive debt but foreign nations will not take the dollar as payment. Instant US poverty.
If USD is ended as a reserve currency then countries holding USD can do a few things, trade for other currency or spend the USD they already have buying US products/investing in USA instead of accumulating USD. Doesn't seem like a huge problem does it really?
MMT is how it works now, there's no condition to it, people accept dollars in exchange for services and goods because the Fed Govt accepts 1 USD as 1 tax credit and you can not pay your taxes with anything else.
You are quite wrong.
Domestically, the dollar is driven by taxes. The fact that some 100 million Americans need to pay taxes drives the price of the dollar, since people need to sell things to the state (and to each other) in order to get the funds to pay the tax. This drives the dollar and the market. And as long as the market is capable of producing lots of stuff foreigners would want to buy, international demand for the dollar will be strong as well. The reason the dollar is strong internationally is because foreigners know its strong domestically and will pay a high price to obtain and save in US dollars. This creates the trade deficit while leaking demand (and employment) out of the US economy. It also simultaneously creates the US budget deficit, which is not currently large ENOUGH to maintain the employment offset by the trade deficit and net savings desires of the US domestic sector. When foreigners stop wanting to save in US dollars as much, that will actually restore employment and demand domestically and bring it back to balanced trade as they use their dollars to buy things in the US. You would also probably see smaller budget deficits. No instant US poverty: just a shifting of the international balance of payments. A weaker dollar is not necessarily a bad thing.
(Especially since politicians constantly complain China’s making it too strong. Pick one)
Henry Gustav Yes quite right!
@@andrewprice8820 No - WRONG - taxes do not drive value into money. If they id the highest taxing countries would have the highest vaue money - They don't and if you care to look you will notice that.
Also taxes were on every currency that went broke due to inflation like the Brazilian Cruzeiro which went broke in the late 1980's. Do you see a high valued currency in Venezuela these days despite their taxes with their massive inflation and falling currency values?
I suppose you will say next that they need more taxes in Venezuela to bring the value of the currency up.
will thugs and junkies put down the glock and needle in exchange for the hammer and sickle?
So, that's Do Be ??
@@joebhed1 on a good day it's don't be. the goal is to have more good days than bad.
Whether or not "resources" (which in the context of this conversation, is the labor of real people who have real lives outside of work) are suitable for being deployed in other industries, presupposes that people even want to spend their precious and finite time starting all over again on a different corporate ladder because that is exactly what will happen. No business will give a new employee -- be they young or older -- to the field, an initial wage commensurate with their experience in any tangentially related field!
So aside from the fraught politics of the Green New Deal, there's also the common psychological aspects of human behavior to deal with!
Don't get me wrong here, the end result desired from the Green New Deal is good, but it's the expectation of execution that is repulsive to many, especially to those of us who have been being swept along in the economic troughs of the cyclical prosperity waves that have consistently crashed over our economy! We are tired of being down in the troughs. We want to ride the crest of the waves of prosperity with as much style as the Uber wealthy seem to! Actually, we'd like to see much calmer economic/financial seas that are easier to navigate. That's just human nature, and you're going to have a very hard time battling that to push through such a radical economic plan!
Fed Jobs guarantee and a GND will provide economic prosperity to all. That's the purpose. Eliminate unemployment and poverty while tackling climate change.
The biggest problem we face is not having a voice against the opposition. How do we do this next to this channel?
Who is the opposition that needs a voice against it ?
What are they saying?
What does MMT say about what they are saying?
This monetary issue should be a national public inquiry -- into our system of money and the distribution of our wealth. And not be merely a public relations Q&A.
Or just stick with the MMT and Bankers Money system engaging private capital marketeers to provide the debt-contract basis for our money.
MMT and the Bankers (surprise) love using debt for money.
Something about the benefits of more capital assets. And more capital-ists, I guess.
The Post-Keynesians thought Mosler was a something for nothing.
And that something turned out to be going deeper into debt to the bankers that issue our money. So,raging capital.......ism.
I don't get MMT.
joe bongiovanni going into debt. You understand that the national debt is actually all the money spent into the economy that hasn’t been taxed back yet right? The government taxes in order to provision itself. Which means it doesn’t need our money to buy soldiers uniforms and ammunition manufactures ammo but rather the ability to pay for those resources . The fed sets the unit of account in order to do this. If it didn’t than that company that sells guns in Texas bucks will not b able to sell to the fed that buys only in dollars. Therefor we have a tax. Our major problem is that corporations that abomination that our justice system gives rights to like a living breathing human being has taken that power for themselves and abused it.
@@Juanillo1-1.1
Did you think real hard about that one, johnny g.??
It means absolutely nothing.
IF the Guv needs to collect the money from taxpayers in order to pay it off --- well that MAKES it a public debt.
LOL. Another MMT joke on its believers?
It's akin to - your credit card debt is not debt, it's just money that you've already spent that you haven't earned yet.
LOL
Get over it, Johnny.
joe bongiovanni of course it’s debt. I’m not disagreeing with u on that money is a tax credit it is debt and our guv demands it from us
The national debt, and u know this, why r u misrepresenting MMT? Is all the money spent into the economy that hasn’t been taxed back yet. What r u afraid of when u lie ?
Isn't this all based on the US dollar being the international reserve currancy? What underpinnings it's value if half a trillion dollars are created out of thin air?
Kyle,
The Money Supply has increased by that amount every year since about '06. No inflation problem.
Another ten years will not cause inflation, if the government budgets public goods for its spending.
Here's the thing.
There's absolutely zero economic difference between the bankers issuing a Half-Trillion, and the Guv issuing a Half-Trillion.
Same amount of money out there. To cause inflation. Or, not.
Only LESS Public Debt.
Getting OFF our reserve-currency pedestal SHOULD happen, and it WOULD cause a real loss in our average standard of living. (GDP per Capita)
How much?
How much do we owe ?
For the Public Money System Common.
@@joebhed1 Hi Joe, I agree with you 100% the MMT is just left wing equivalent to the 2008 bank bail out, the money would spent on a more positive endeavours, but it is still based on the same idea of American exceptionism.
@@Kyle-rg2sd Well, sort of. The thing is, the US dollar being the world's currency reserve IS exceptional, and that we get to print as much as we want IS exceptional (we can debate whether it's fair or not), that's just reality. And I'd be happy to have a left-wing bailout, if it added real resources into the economy that helped everyone, not just the banks like TARP did
The thing is, MMT says that our spending deficit is underpinned by productivity and "resources", either real or labor, etc. It is not underpinned by taxes, and we're not on the gold standard anymore.
the real economy is one of the largest and richest in the world ,it is constantly producing real goods and services ,and for the most part growing year over year, that is not thin air, if money is a fiat for real things and the real things are growing in quantity and value then the exchange medium should grow too
@@davelind3177 Hi Dave, I appreciate your input of this, it seems valid. The issue is the American Dollar is not strong because countries are buy American product, the trade deficit was $50 billion in March alone. The Dollar remains strong because it is used in the global market as a whole, if that ever changes and the US economy is flood with all over seas reserves the inflation rate will be in teens.
Question... is anyone (any gov.) Paying there bills know.. seems we already have MMT..
We do, its how our system and many other countries operate.
Lol
Huh 21 trillion in debt. Thats not paid..
@@jonvaldes2969 its just money the Fed Govt has spent/created that has not been taxed and is being held in form of tsy bonds. If Fed Govt spends 21 trillion then someone received that 21 trillion in the economy. What we have is 21 trillion in National savings.
@@henrygustav7948
What Do You Mean, WE ?, White Man ??
The bankers are holding the paper (or electronic equivalent) and we OWE them the money back.
We don't have the money ..... OR ...... ta da ... we would not have borrowed it in the first place.
Get over it.
More Mosler horseshit.
Public Debt = National Savings.
Gawd.
You still buyin ?
Is it the way to fund the Green New Deal? No, MMT is not a theory, it is the way we fund everything through the Federal Government, it is just a detailed description from the accounting filter instead of theoretical economics lens.
Give it a break. The MMT is rubbish that defies reality. All of the government designated official money such as the US dollar or UK Pound or other official currency in countries of the world is fiat credit and debt based money.
Such examples of MMT are it's false idea that the government issues the currency which is totally wrong because the reserve bank (Federal reserve bank in the U.S.A) creates the currency that government can only get if it borrows by selling Treasury securities to the reserve bank.. Those treasury securities all mature and the reserve bank has to be paid back by the government who collect the money through taxes to pay it back.
Besides that most (over 90%) money in the economy is created by private banks when they create new money and lend it to their customers. That too all gets paid back.
The so called "lens" is just an MMT fantasy that defies reality.
If you can just print more why the need to raise taxes, just print... maybe because it's nonsense..
taxes drive the need for the USD. Without taxation people would have less of a reason to use the USD and eventually if you can't enforce tax collection in your own currency then its value becomes 0.
@@henrygustav7948 Taxes drive the need for US dollars? China, Japan, etc pay US taxes? i was unaware of that.
@@robe_p3857 japanese taxes drive the need for Yen, Canadian taxes drive the need for CAD, don't be an idiot.
jon valdes -
Yes, but isn't the bigger question , why the need to BORROW ?
Even with a 'Public Money' System, the need for taxes will continue.
It's axiomatic given the nature of money and the size of the Guv Budget .... which will grow.
But the need to BORROW would evaporate.
As would the Public Debt.
Thanks.
jon valdes -
Yes, but isn't the bigger question , why the need to BORROW ?
Even with a 'Public Money' System, the need for taxes will continue.
It's axiomatic given the nature of money and the size of the Guv Budget .... which will grow.
But the need to BORROW would evaporate.
As would the Public Debt.
Thanks.
L. Randall Wray needs to work on Bernie's campaign!
Excellent, does that include Math? Sorry but the IRA does almost nothing to reduce GHG emissions and $389 Billion will do nothing to change a $25 Trillion economy based on 80% Fossil Fuel Consumption. The numbers just don't add up. It is about 1.5% of what would be necessary, so really almost nothing. Especially when that $389 Billion is spread out over 10 Years (so 0.15% of what would be necessary) and the War Budget is $886 Billion every year, the Military is the largest institutional emitter of GHGs on Earth, so those are some weird numbers too . The correlation between global energy production and global GDP is overwhelmingly strong. A simple linear regression between energy production and GDP has a correlation coefficient of 0.997. You cannot run a $25 Trillion economy based on 80% Fossil Fuel use and expect 0.15% of GDP investment per year into Climate Stability to accomplish anything. Weirdest number of all? That the Biden administration somehow thinks these provisions will produce a 50% decrease in GHG emissions by 203O, that is comical in its stupidity.
Deans argument did not age well. We spent trillions and our weak inflation only came from the Russia war and corporate greed
Yep, just print all the money you need. No need to worry about the debt. No consequence at all... What a load of bs.
money IS debt. what are you talking about? have you heard of savings?
Wellll..... if you just 'print' the money you need, THEN you don't have any debt.
We printed a quite-large supply of government-issued Greenback Notes that are still in lawful circulation.
What's the problem with that example ?
Thanks.
MMT cannot print value for a currency.
The mere fact that the have all these policies should clue people that the want an old Soviet style economics give power of the money to the few oligarchs.
MMT is for the top 1%
Outlaw Central banks... Gold n silver=freedom
🤣🤣
Hardly.
Been there. Done that.
MMT is primarily a descriptive economic theory.
That is, it simply describes what is.
Accepting MMT is accepting reality.
#MMT
That's incorrect . MMT misdescribes what happens in the economy. It misdescribes where money comes from and makes many claims that are factually incorrect namely :- Says the governemnt cretes new money whne it is the Federal Reserve. Says government issues money when it spends which is untrue since it spends the money taking resources in exchange. It claims taxation destroys money and it reduces inflation which is also incorrect since taxes do not disappear from the economy but are spent again as revenue to provide government with the spending power.
Mosler also claims that government is just like a scorekeeper of the money in the economy and makes an analogy to the score keeper in a ball game -Totally wrong since it it ignores the fact that government participates in te economy and is the first and largest spender of money and not some passive entity that' keeps score'. Much of what MMT claims totally ignores the sequence of events of the processes in the economy which alone make it garbage.
MMT - LOL
Well, I hope there’s not supposed to be any ‘’theory’ to the modern-monetary-theory theory.
I’ve been wondering … ‘What’s the Theory ?’
So there is no Theory, and MMT just ‘describes’ the monetary system we have ??
WHY, then, does MMT deny being a Status-Quo revolution ??
LOL
MMT is a money-mythology.
It is based on provable false memes - about taxes, and Public Debt and governmental money powers.
Shall we ?
@@joebhed1 Yes, It's just a jumbled up mess full of incorrect and the inconsistent time sequence of what it describes in one part to another as well as missing information and changing terminologies throughout.
Or.
We could behave like responsible adults did in the 1940's..50's..60's..70's(kinda) and 1990's and implement proper progressive tax rates and stop with all this MMT magic trick fantasy mumbo jumbo?
Just sayin'!!
Bradbury Pond in WW1, Colonial Scrip (in the American colonies, the riots was not only about taxation, the Brits demanded to give up on that local currency and switch to one backed up by silver or gold. Than strangled the economy because it introduced scarcitiy. Before there was ENOUGH money in circulation for what was needed for the economy..
The Tally Sticks around 1200 in Britain.
The Nazis financed infrastructure and military rebuilding with similar concepts - Mefo cheques - also some social housing projects and they continued universal healthcare (which Germany had since 1883 / 1884).
Now I do not say the way they invested and created was good, but they for sure had an impressive economic recovery and they DID get good results from their investments. Military equipment (tanks, airplanes), streets and railway.
If the former democratic government had been smart enough the Nazis would not have gotten to the point where they got 35 % of the vote and were allowed to form a 35 % minority government. The speedy economic recovery after the austerity gave them legitimacy.
(The British aristocracy had little problem with them despite the nasty rhetoric, taking citizens rights away from people with Jewish descent or any dissenters. The did not mind rightwing authoritarina in the least !)
The question is who gets the usury, the only way to have balance is for the usury to be paid to the people . The other question is how does this affect the world, do they get to then do the same, as all our banks are intertwined and have been forced by American military intervention not to do this policy and use American dollars. The people in countries like Canada and Australia would become fabulously rich if they could disconnect from central banking, and use an in house closed system.