I actually like Steve Keen along with MMT. Also, Mark Blyth & Stephanie Kelton talk about MMT. - Politics Forum.org | PoFo

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#15109703
I actually like Steve Keen along with MMT.
Dr. Keen adds private debt to the problems that MMT addresses. He sees that private debt has caused 150 Recessions over the last 200 years and Gov. debt, specifically excessive deficit spending, has caused just 6 hyperinflations. [According to one set of definitions.]
He is calling for a Debt Jubilee to reduce the private debt loads. Functionally, he wants there to be a fairly large UBI for some years to provide dollars to those in debt to pay down their private debt. To be fair those who have little debt should get it too. Those who are filthy rich don't need it, so might not be given it, but they're so rich that they will not notice it. There may be some in the middle-class who don't deserve it, but I don't know who they might be. Therefore, it should be Universal.
. . . Steve wants people who have no debts be required to invest it in corps. so the corps. can pay down their debts too. I don't see why this is a good idea. The really poor need money now to spend now. Making them investment it just gives a way for someone to cheat them out of some of it when they sell those investments to get money to make their lives better now.
. . . As I see it the last few decades have seen flat or negative real wages that has led to the massive private debt. These flat wages have effected those who have no debts (because they had no credit because they were Black for example) just as much as those who do have debts to pay down (because they could get credit). Another reason for the high private debt level is the low interest rates that were kept low to try to get the economy moving faster, especially after the GFC/2008. This let corps. borrow too much.
. . . Basically, Dr. Keen's UBI is just to give the people money that they should have gotten over the last few decades to pay down their debts so that they don't have that debt burden going forward.
. . . I'm not sure about his amounts, but maybe in the US it would be $1500/mo. per adult and $500 to $1000 per child. This would be continued for about 3 years or so.

See also, the 1st reply for Dr. Steve Keen in his own words.

________________________ ________________________________________

Mark Blyth & Stephanie Kelton talk about MMT in the current covid crisis .42 min. long




Another talk by Real Vision with Stephanie while on her book selling tour. 57 min. long.

Last edited by Steve_American on 25 Jul 2020 06:50, edited 1 time in total.
#15110869
@Crantag,
[In summary, if I understand the implications of his plan correctly; ---
In the long run over several recessions and debt jubilees, the banks loan money and collect interest. This lets the private sector have a lot of power to decide who gets loans and lets banks make money with the interest they get.
. . . However, the loans are moved from the banks to the US Gov. which can sell bonds or not and doesn't need the interest. The Gov. basically forgives the loans. The result is the borrowers get forgiveness on some of their debts (which instantly lets them spend more instead of making debt payments), the frugal people (which includes most Black, brown, etc. Americans who have no credit and so no bank debts) get shares in corps. (which I think they can sell for cash), and the corps. trade shares for forgiveness on some of their debts.
. . . And, this doesn't cause any inflation.]

If I understand Prof. Steve Keen correctly, he is not talking about a Debt Jubilee, now in the covid-crisis. He wants to pay down the private debt in the US (or other full fiat currency nations). This not going to happen now when people need income just to survive. So, later, after some sort of new normal has been achieved do the Debt Jubilee.

Also, the Debt Jubilee does not create many net dollars in the economy. You see, the dollars were created when the banks made loans and were o-set by the repayment note. Normally the dollars will be destroyed when they are paid back to the bank (if you remember the value of the repayment not is going down as the debt is paid off). That is when the borrower makes a payment he loses the dollars, but the bank gets the dollars and also loses some value in the note. So, the bank doesn't get the dollars, it just gets the interest.
. . . So, the Debt Jubilee dollars under his plan are just used to pay down the people's debts or are used to give the frugal people assets in corps. that are gaining a reduction in their debts. Therefore, all the money is going to banks where it gives the banks cash but reduces their assets in an equal amount.
. . . Therefore, there is no net increase in the money supply. Therefore, there should be no inflation as a result.
. . . So, then the banks have the cash and less assets. But banks love assets.
. . . If the US Gov. decides to sell bonds to finance the Debt Jubilee, then the banks will have the cash/dollars to buy about exactly all the bonds the Gov. will have to sell for the Debt Jubilee.

It is hard to see, but if I understand the implications of all this correctly; ---
In the long run over several recessions and debt jubilees, the banks loan money and collect interest. This lets the private sector have a lot of power to decide who gets loans and lets banks make money with the interest they get.
. . . However, the loans are moved from the banks to the US Gov. which can sell bonds or not and doesn't need the interest. The Gov. basically forgives the loans. The result is the borrowers get forgiveness on some of their debts (which instantly lets them spend more instead of making debt payments), the frugal people (which includes most Black, brown, etc. Americans who have no credit and so no bank debts) get shares in corps. (which I think they can sell for cash), and the corps. trade shares for forgiveness on some of their debts.
. . . And, this doesn't cause any inflation.
. . . Do I have this right?

Come on someone (Crantag?), understand the plan . . . And, this doesn't cause an inflation.and its effects, and tell me if I got it right? Or not.
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