[late]

late, 1973 had nothing to do with MMT.

One of the counterarguments to saying debt doesn't matter is that debt can erode purchasing power. That's what I noticed, and at that time we had the Cold War and Vietnam going.

[Steve_American]

@late, what month did you leave, and what month did you return?

[Steve_American]

Professor Stephanie Kelton | Finding The Money [to fund the programs to solve the climate crisis] || January 2024.

1 hour long.

Dr. Kelton is a leading MMTer, and the author of "The Deficit Myth".

I'm very sorry that this site can't deal with long YouTube addresses. Remove the [==] and paste it to your browser to view it.

https://www.you[==]tube.com/watch?v=viddh5Dft1A&list=TLPQMTAwMTIwMjTGWKd97L3FSw&index=26

.

[late]

@late, what month did you leave, and what month did you return?

It was a semester abroad, from Jan 73 to July, in Vienna.

[Steve_American]

It was a semester abroad, from Jan 73 to July, in Vienna.

OK. So, before the war and the embargo.

That means the inflation you saw was a result of the theory that any currency that is not backed by gold will experience inflation, and like you said, the war in Vietnam, etc.

Still any mention of 1973 makes most people think of the spike after the embargo, and not the much lower inflation before that.

Still, I apologize.

.

[late]

Still, I apologize.

No need. You are one of the guys here that do not piss me off.

More clowns than you'd find in a circus.

[QatzelOk]

@QatzelOk, you wrote, "In the past, national bankruptcies were "handled" by killing tens of millions of innocent people in wars."

The link is to an article about how WWII ended the Great Depression.

The thing is that in 1939 and 1941 the whole world was still on the gold standard ...

And continued to be on the gold standard until the Vietnam Atrocity.

now 181,505 views.

Yes, and how many trillions in paper US dollars out there looking for takers?

Our bankruptcy will destroy most of our nations, you realize? Once enough people realize what a scam the USA and Canada (and other 'nations') are... they go bankrupt because no one cares at the top... nations will be re-created out of smaller groups of people.

The upcoming bankruptcy also explains why so many seemingly useless wars have been started by bankrupt us in the last 20 years. These wars are one of the only scams left for stealing whatever assets can be stolen before the Titanic goes tits up.

It also means that Covid-19 was designed by the rich to steal collateral (all the infrastructure) by killing off rich boomers and bankrupting the governments.

National bankruptcies are "Time to face the music" time for garbage governance like ours. And millions often die during the "coming of age" lesson that is never learned.

[Steve_American]

Ep. 8 - The Bond Vigilante ft. Warren Mosler || Funny Money, he explains why the Gov. can always sell bonds (actually he asserts that it doesn't need to sell bonds to pay its bills). 1.5 hour long because he explains a lot of other things.

You can skip at least 10 min.
The bond vigilantes part is at the 1 hour point.

Remove the [==] to view the video.
https://www.you[=]tube.com/watch?v=1PzQz3_boAM&list=TLPQMTAwMTIwMjTGWKd97L3FSw&index=56

now 248,600 views.

[Skynet]

USA is an overstreched empire, 1000 billions for the military, but no basic social security nor free education nor general health insurance.

[Steve_American]

USA is an overstreched empire, 1000 billions for the military, but no basic social security nor free education nor general healt insurance.

I can agree, but what does that have to do with the question of "Can the US go bankrupt?"

I also remind everyone that private debt is a huge problem.
.

[Steve_American]

Skip to the 6.5 min. or 6:30 mark to avoid the snafus at the start.

A good debate about MMT' views of deficits and national debts. Dr. Kelton is the main speaker and is supported by Dr. Steve Keen, but other economists who think MMT is "wrong" also have their say and ask Dr. Kelton questions that she answers.

Dr. Kelton says new things in this 1.5 hour video.

One presenter at the 1-hour mark says that the world's response to the covid crisis has shifted the burden of proof that all Govs. must get money before they can spend money onto those who assert that this is true. That Canada went from a deficit of C$25-B/yr to one of C$450-B/yr. and did not raise taxes at all (AFAIK).

OECD NAEC debate on #MMT with Stephanie Kelton, author of The Deficit Myth -- posted by Prof. Steve Keen

now 325,120 views.

[Steve_American]

A paper and a video where Dr. Richard Werner tells us about economics.

International Review of Financial Analysis
Volume 36, December 2014, Pages 1-19

Can banks individually create money out of nothing? — The theories and the empirical evidence ☆ by Richard A. Werner.

In this article Dr. Werner explains the history of the disagreement on -- if banks create money when they make loans or if they loan out their depositors' money.
Then he tells us about an experiment that he and his students did in 2014, in which he borrowed 200K euros from a bank i Germain while his students watched what every employee in the bank did as the loan was completed. [You can skip this part and go to the experiment.]
He says he proved that they did create euros when they made the loan. [Soon after this the Bank of England published a paper accepting that he did prove that, however sometime later (perhaps under pressure) it seems like AFAIK the BoE published another paper taking that back. Such is the state of economics in the 21st century.]

https://www.sciencedirect.com/science/a ... 1914001070
________________________________.________________________________________

Richard Werner || What's wrong with mainstream economics.

by Why Don't Economists?

In this video Dr. Werner explains my point that MS economics has proven nothing because its 1st axion is utterly false, and then many or most of its assumptions, aka premises, are also obviously false. And so, they have created a fantasy world in which their conclusions would be true and proved; and then they have the gall to pontificate to our politicians as if their results have any validity in the real world in which you and I live. Is it any wonder that their predictions almost never are accurate, or if accurate, they happened for reasons that were not their stated reasons. E.g., they predicted inflation after covid because of the deficit spending, but the inflation was almost totally a result of shortages form people switching their spending from services to goods like DIY home improvement supplies, shipping snafus & factory closings, OPEC+ raising oil prices, the war in Ukraine, and price gouging by corps to make more profits.

And other things.

now 347,265 views.

[Steve_American]

I'm no economic expert. I'm over 75 years old. I majored in Engineering and Anthropology and never took an economist class.

I've been a supporter of MMT for about 12 years.

I have a few thoughts.

1] IMHO, Japan has used MMT (but without the Job Guarantee Program) to have large deficits for 30 years, low inflation, and a debt/GDP ratio over 260%.
Perhaps, this is mainly possible because it has kept the interest rate on its bonds at about 0.1%, and they still sell all they need to sell. Although over 50% of them are now owned by the Bank of Japan. This means its yearly total interest payment is small, compared to if it had an average bond interest rate of 5%.

2] If Warren Mosler is right that somehow the interest rate and the inflation rate are linked, then this explains why Japan can't get its inflation rate up to its target of 2%. It keeps its interest rate at about 0.1%, and its inflation rate (except during covid) has been under 1%, IIRC.

3] I'm also of the opinion that a nation's trade deficit or surplus is very important. Japan usually has a trade surplus, so it has money entering the nation, instead of money leaving the nation, like the US has.

4] I think that maybe the US can do more with MMT, despite having a trade deficit, because foreigners want to hold dollars and US bonds, because their own currencies are worse than the dollar. So, maybe the UK really is more constrained than Japan or the US.

5] Stephanie Kelton often uses her example of -- she acting as if she is the US Gov. spends $100 into the room and the taxes $90 back out. And, then sells $10 worth of bonds to the room, which takes the last $10 out, but leaves the $10 of bonds in the room.
. . . IMHO, she should have 1st given $200 to the room as money already in the economy at the start of the "year". Then, when she finishes her usual thing, she points out that all the original $200 in the room is still there to be used to invest in new businesses, etc. So, deficit spending has not at all crowded out investment by sucking up existing savings.

6] She might also point out that having a balanced budget by raising taxes by $10 to tax all $100 of spending back out of the economy, also means that the original $200 in the room is still there. But, next year the $10 of bonds can cause someone to be more willing to invest some of the original $200 in the room last year that he owns, because he has enough safe savings and can risk more when he invests it.
. . . But, whatever that $10 of deficit spending did for someone, didn't get done with the balanced budget. Therefore, the nation loses in 2 ways. 1] The someone who benefitted from the $10 of deficit spending didn't get that benefit. And 2] It doesn't have the extra $10 of savings next year to maybe invest.

7] This one is more of a question.
Banks create dollars when they make loans and these dollars are in the banking system next week, so they allow more dollars to be loaned out next week. Banks are not limited in the total they can loan.
OTOH, banks will soon have more deposits to meet the regulatory requirement from the loans they have made. These deposits are liabilities to match the assets that are the loan contracts. If the loans can't be repaid the banks will still have the deposits=labilities but lose the assets that are the defaulted upon loans. So, the banks become insolvent.
. . . Now the question. Why do banks feel that they need to charge a higher interest rate on loans than the rate of inflation? It seems like they would still get the interest and the loan dollars still disappear as the loan is repaid. [Note-- if the loan dollars don't disappear as the loan is repaid then, AFAIK, the money supply would be growing at least 10 times faster than it does now. So, the dollars must be disappearing. I've never seen anyone point out that these dollars just disappear over time.]
. . . So, why do banks feel that their interest rate must be more than the inflation rate?
That is the banks are not lending their own money, it is magic money. So, what is the big deal about getting more than the inflation rate?
.

[QatzelOk]

USA is an overstreched empire, 1000 billions for the military, but no basic social security nor free education nor general health insurance.

I can agree, but what does that have to do with the question of "Can the US go bankrupt?"

Skynet has provided the process by which the USA has gone bankrupt.

The rich get used to triumphing abroad and skimming billions when times are good. When they get "not so good" (starting in the 1970s)... they spend more and more money trying to win back the old glory days of winning World War Two... over and over and over... taking the dollar off the gold standard to fund Vietnam atrocity, pumping trillions into vanity projects all over the world to make the encrusted elite feel like they're heroes like "their ancestors who robbed their way to riches" were....

The USA is involved in several world-controlling wars right now, and yet doesn't have one km of high-speed rail, and still lives in Levitown-style 1950's "GM world of tomorrow" housing.

The West is financially bankrupt, but it is also bankrupt in many other ways like morally (genociding Palestine as we speak for donor money), technologically (seven boosters in every SUV-driving arm), socially (school vouchers and school shootings) and even emotionally (death of community in suburbia, childhood lived in front of screens) etc.

When the rest of the world pulls the plug, the West will be starting from zero, and its children will be in debt up their eyeballs for their entire lives for money that their parents and grandparents spent (allowed the corrupt deepstate to spend).


* note that federal debt has almost doubled since 2018

Total USA debt (private and public) is close to 100 trillion dollars

Per capita combined debt: $250,000 per person
Annual interest due at 5%: $12,500 per person

This is debt slavery, and it was accomplished by long-term means.

https://www.usdebtclock.org/

[Steve_American]

On Jan. 15th I posted a reply with a paper by Dr. Werner in which he proved with an experiment that banks do create money when they make loans. It is also true that a week or 2 later this money can be used to meet the regulation requirement to have 90% of loans on deposit, but banks can borrow from the central bank or from another bank that has more of those deposits on the overnight market.
. . . This means that banks have no hard functional limit on how much they can loan, except that they need to find credit worthy borrowers. Also, even if a few banks are afraid to make loans there are always other banks that happen to have more deposits, and so they can feel better about making more loans.

So, in 2014 the Bank of England put out a report that said this. That his proof was definitive.

"Money creation in the modern economy
By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s Monetary Analysis Directorate.(1)
 This article explains how the majority of money in the modern economy is created by commercial
banks making loans.
 Money creation in practice differs from some popular misconceptions — banks do not act simply
as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’
central bank money to create new loans and deposits.
 The amount of money created in the economy ultimately depends on the monetary policy of the
central bank. In normal times, this is carried out by setting interest rates."
Link => https://www.bankofengland.co.uk/-/media ... rn-economy
_______________________________________________._________________________

Five years later the BOE put out another report that seems to take most of this back.

"Can banks create as much money as they like?
No, they can’t.

Regulation limits how much money banks can create. For example, they have to hold a certain amount of financial resources, called capital, in case people default on their loans. These limits have become stricter since the financial crisis."
. . . [AFAIK, this is referring to the 90% requirement,]
Link => https://www.bankofengland.co.uk/explain ... ey-created

I think that the BoE took it back under pressure from mainstream econ. because the economists don't want to change their theory. They like it the way it is because it helps the rich get richer and they functionally work for the rich.

They like the part of their theory that Gov. deficits crowd out investment in businesses by sucking up the available savings. In the equations, savings and investment are assumed to be equal. But, if banks create money, then they can always make another loan, if the borrower is credit worthy.

Also, it can be shown that because the Gov. spends and later sells the bonds to equal the deficit spending, the Gov. provides the money to buy the bonds and the existing money is not touched at all. Gov. deficits add to incomes and to savings.
. . . So, Gov. deficits do not suck up existing savings and banks can always make another loan. In fact, deficits will add to the existing savings in the future in the form of bonds or cash if the central banks buy some of the bonds from the public as it often does.

So, the crowing out theory is false. Totally false. This part of MS theory is used to limit "excessive" deficit pending to help the mass of the people, by claiming that it reduces money saved that can be used by businesses as investments.

Also, their math would have to be redone because S does not equal I (savings= investment). This would have been a big problem because it made all the textbooks wrong.

So, they saved the theory with that 2nd report. But it is still wrong. However, many of you still believe it.

.

[Steve_American]

Prof. Steve Keen & Friends have posted many good videos rejecting MS Econ. theories. This one is about his computer program he calls Minsky, Financial Instability, the Great Depression & the Global Financial Crisis. See below for what Minsky is.

This video is very interesting.


You'll need to remove the [==] to see the video.
https://www.you[==]tube.com/watch?v=G9_nqc-A5_Y&list=TLPQMjAwMTIwMjTHU-AugAQTPQ&index=2

_______________________________________._______________________________


This video is about the new idea of Behavorial Econ.

Dr. Keen has created a computer program that lets you simulate an economy and see what can happen. He calls it Minsky. He'll give it to you if you ask for it. Then you can play with it. It uses System Dynamics, which is an off shoot of Chaos Theory, aka the mathematics of complex systems like the weather, and economy, or turbulent water flowing in a mountain stream. This was impossible before computers. It is the source of the well know "butterfly effect" that says that a butterfly flapping its wings or not changes the weather on the other side of the world a month later. I'd use the case of a farmer using his spray irrigation system or not, but the idea is the same. Even a tiny change in the initial conditions will eventually change the results computed by a program when the same equations are used over and over again. An example is the population growth of moths over the years. It also happens in many cases in the real world.

I'm disappointed that Steve didn't list some of the obviously false assumptions made by MS Econ. IMHO, they did this decades ago and never changed the theory after Nixon ended the gold standard, because they like assuming what they want to prove. It makes it easy to prove what you set about to prove.

Unlearning Economics

now 463,476 views.

[Steve_American]

Be sure to look again at my post from yesterday. I edited it to add a better example of a video from Prof. Steve Keen and Friends.

However, when I clicked on Submit it got hung-up somehow. I just now noticed that and it got posted many hours later.

Thousands of you haven't seen it.

The new video has the [==] in the YouTube address. It is before/above the original video.

This is because it is too long for this site and so it shows as "This video can't be shown".
So, I have to insert the [==] so you can see the YouTube address and put it in your browser.
.

[QatzelOk]

On Jan. 15th I posted a reply...

Wow, that's fantasitic. You posted a reply? Nice. At what time?

What else did you do?

Did you see Misty Tiger since then? If you do, say hi.

...with a paper by Dr. Werner in which he proved with an experiment that banks do create money when they make loans...

And that experiment. Sounds like really legit science.

Did he use banking rats inside a maze, or actual human subjects to prove his really interesting thesis?

As we go bankrupt, I"ll try to keep track of how important it is to not notice this.... and to come back to your really fabulous science and stuff.

[Steve_American]

Lecture 07: Why the Euro is destroying Europe || ProfSteveKeen

Eight years old, but still good. 1.5 hour long.
Aa lot about public and private debt.
Why Europe can not get out of the recession it has had since 2008. Prof. Keen predicted this in 1992, but it got published in 1995. MMTers also predicted this.
How Germany is the exception because it has a trade surplus that is often around 7% of its GDP. Which is a violation of the treaty. So, Germany is exploiting the rest of the EZ and EU, especially Greece, Italy, and Spain, etc. And the rules allow this. [It is possible that the rules were designed to do this by some people in secret.]

It is great that the UK is out of the EU, but it is still obeying its rules on deficits. MMTers say that the UK must stop doing that and start "balancing its economy" and stop trying to balance its budget.

He doesn't talk about it but the EU also has a problem with the Gov. insuring bank accounts, because the Govs. lack the unlimited ability to pay sums like the US had to in the GFC/2008. According to a freedom of info suit the US Fed admitted that it totaled $27 trillion in loans and grants.


Again, the address is too long. Remove the [==] to view it.
https://www.you[==]tube.com/watch?v=2M_MSXbSv5g&list=TLPQMjYwMTIwMjQntPO4z4hSZw&index=1

.

[QatzelOk]

...“We also don’t have money for it anymore because we are running a $1.5 trillion deficit, we borrowed a trillion dollars just in the last three months. It is out of control and some of it has to do with foreign expenditures. We gotta think about what is going on at home,” Paul further warned...

"We borrowed a trillion dollars in the last three months"



A trillion divided by 400 million:
2,500 $ of debt per person added in just the last 3 months

***

* The USA government borrowed $2,500 dollars *using you as collateral* in the last three months alone...

* This is like each person in the USA *borrowing* another $2500 in the last three months.

***

Q: If you were borrowing $2,500 per month and were already in debt for $250,000... how long before you would reach bankruptcy?

Because that is what is happening... per capita.
Per capita means YOU.
And YOU can't stop this in your democracyTM.