Why do I keep harping on MMT? - Page 2 - Politics Forum.org | PoFo

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#14926899
"During the great financial crisis, the central banks of the United States, United Kingdom and Japan created $3.7 trillion in order to buy assets and encourage investors to do the same. Michael Metcalfe offers a shocking idea: could these same central banks print money to ensure they stay on track with their goals for global aid? Without risking inflation?"
. . . . BTW, there are many who calculate just the US part of this as over $27T. Yes, $27 trillion.

I offer this TED talk as another data point to drive home the point that the GFC of 2008 showed that many trillions of dollars can be created overnight and inflation does not rise as a result. Why? Because the US (and the world) are not anywhere near to real full employment. His program for foreign aid is not my thrust, although it can be part of it.
. . . You can easily read the transcript if watching a 20 min. talk is not your style.

https://www.ted.com/talks/michael_metca ... t#t-815185
#14926903
Crantag wrote:I hope you realize I was being a bit tongue-in-cheek.

I watched the video with the extremely smug commentator you posted talking about 'aha moment' and I noticed your parrot job.

The reason I think MMT is based on a flawed paradigm is that it seems based on a dominant USA and dominant USD; but these circumstances are fleeting.

I am not good at reading people, even worse on the internet. So, no I didn't know you were lying or being sarcastic.

However, MMT claims that Japan and the UK, at least, could use MMT to stop using austerity and grow themselves out of the recession.
I guess that you disagree with that claim. Do you have any proof or evidence of that?

As for smugness --- it is in the eye of the beholder, isn't it? If you like or agree with the speakers points, then she is being confident; but if you disagree, then she is being smug. If she avoids looking smug then she doesn't look confident and then nobody will believe her, right? You disagree so you see her as smug, it is as simple as that, at least to me. But, then I can't read people well, so I do not sound confident, do I?
#14927001
Steve_American wrote:I am not good at reading people, even worse on the internet. So, no I didn't know you were lying or being sarcastic.

However, MMT claims that Japan and the UK, at least, could use MMT to stop using austerity and grow themselves out of the recession.
I guess that you disagree with that claim. Do you have any proof or evidence of that?

As for smugness --- it is in the eye of the beholder, isn't it? If you like or agree with the speakers points, then she is being confident; but if you disagree, then she is being smug. If she avoids looking smug then she doesn't look confident and then nobody will believe her, right? You disagree so you see her as smug, it is as simple as that, at least to me. But, then I can't read people well, so I do not sound confident, do I?

Steve, you are my elder and I owe you some respect.

I said all along that MMT probably has some good contributions. This is basically true of all currents, to my reckoning.

I'll tell you what, I hadn't fully grasped the fiscal emphasis of MMT, and I do think fiscal policy has been neglected over the period of the ascension of neoliberalism/monetarism. By extension, I think that the favoring of monetary measures has an in-built bias which is in favor of big banks. Moreover--and I don't know whether or not this is consistent with MMT--I think low interest rate policy has been disastrous with respect to sustainable financial well-being of workers. You can let me know if you have any insights with respect to this aspect of prevailing US economics--i.e. low interest rates. I think these low interest rates have favored speculators, penalized savors, and perpetuated bubbles.

If I could offer a constructive critique, I think you might benefit from looking into additional economic theories. If only to better understand where you disagree. You seem to be a bit narrow in your focus.
#14927053
Crantag wrote:Steve, you are my elder and I owe you some respect.

I said all along that MMT probably has some good contributions. This is basically true of all currents, to my reckoning.

I'll tell you what, I hadn't fully grasped the fiscal emphasis of MMT, and I do think fiscal policy has been neglected over the period of the ascension of neoliberalism/monetarism. By extension, I think that the favoring of monetary measures has an in-built bias which is in favor of big banks. Moreover--and I don't know whether or not this is consistent with MMT--I think low interest rate policy has been disastrous with respect to sustainable financial well-being of workers. You can let me know if you have any insights with respect to this aspect of prevailing US economics--i.e. low interest rates. I think these low interest rates have favored speculators, penalized savors, and perpetuated bubbles.

If I could offer a constructive critique, I think you might benefit from looking into additional economic theories. If only to better understand where you disagree. You seem to be a bit narrow in your focus.

I agree completely that near zero interest rates are a very bad thing. Interest rates being paid to simple savings accounts should be slightly higher than inflation. Then saving is rewarded instead of penalized.

MMT would fight inflation with higher taxes to suck the surplus cash out of the economy before it bids up prices.
MMT claims that until there is real full employment large [not humongous] deficits will not result in inflation. This is because when there is any real unemployment firms can hire the unemployed to increase output. This new output then sucks up the surplus cash that would otherwise go to bid up prices.
. . . This is the key claim of MMT. Please focus on this claim. Why* do you not accept it? Or, if you accept it, then why do you resist increasing the nation's** deficit with more spending, a lot more spending?

.* . By 'why' I would like to also ask for some evidence to back your assertions up. Just some.
**. Here, by 'nation's' I mean countries like US, Japan, UK, Australia, NZ, etc. Not nations that use the euro.

Also, I'll repeat my question in your quote ---
"However, MMT claims that Japan, Australia, NZ, and the UK, at least, could use MMT to stop using austerity and grow themselves out of the recession.
I guess that you disagree with that claim. Do you have any proof or evidence of that?"
. . . This question is related to my question above and to your assertion [IIUYC] that only a nation that issues the world's reserve currency can use MMT.

.
Should I spend a bunch of time learning what I think is bullshit?
How much time have you invested in learning what MMT has said? If it is not much, then why ask me to invest more time that you have learning about economic theories that we reject?
It took me over 12 hours to learn enough about MMT to understand it and why it is better than other theories. Some of that time was being told what MMTers say the other theories say.
Prof. Randall Wray has a "Primmer" for MMT on line. Bill Mitchell also seems to have one on his blog. Iprovided links to his blog in other threads.

BTW --- in "Conspiracies" here I asked, "Is austerity really about suppressing consumption in the West so that it uses less fuel and releases less CO2? Is it really about climate change?" So far there are no replies at all.
#14927126
I can't lie, your proscriptions sound fairly acceptable.

It is not really a common leftist position to be anti-deficit; but everything is relative.

I don't know much about the particulars for the other countries you mentioned, but with respect to the US and Japan, I think a point has been reached at which debt is excessive, and my gut reaction runs counter to policies of dramatic continued expansion.

That said, it is going to expand anyway so perhaps it may as well be targeted.

Frankly I have no wise retorts. As an actionable policy agenda, MMT could be worthy of consideration.
#14927309
Crantag wrote:I can't lie, your proscriptions sound fairly acceptable.

It is not really a common leftist position to be anti-deficit; but everything is relative.

I don't know much about the particulars for the other countries you mentioned, but with respect to the US and Japan, I think a point has been reached at which debt is excessive, and my gut reaction runs counter to policies of dramatic continued expansion.

That said, it is going to expand anyway so perhaps it may as well be targeted.

Frankly I have no wise retorts. As an actionable policy agenda, MMT could be worthy of consideration.

This is the thing. The US, Japan, UK, etc. can always pay the interest on the debt with newly created dollars [with just a slight change in the law]. They can also redeem all bonds as they come due and roll them over. If your gut is right that the national debts are too high then a different policy could be instagated of creating $1 of newly created money for every $1 borrowed [incl. rolling over old debt]. This would reduce the interest on the debt and allow the Fed. to raise interest rates for all the reasons you said and I said. It would, of course, be a form of "printing money" but QE is already doing that, right?
#14927675
I'll admit, I've been moved a little.

I think it seems pliable. Creating money with a directed purpose seems feasible.

There's one more thing that comes up for me though, and that is the role of corruption. Hypothetically this may not be an insurmountable issue, with proper checks and balances being put in place.

But corruption is a big challenge nonetheless. Some amount is inevitable and a certain degree is tolerable--if not great. To an extent, the role of corruption lies outside the realm of theoretical proscription. But, in the instance of creating money for directed spending, the specter of the ill-effects of corruption seem to loom a little. What I mean is the threat of the misdirection of funds.

This does seem a little like Keynsianism rebranded. But there are differences I suppose. In particular I can appreciate the efforts to focus on the changed norms of the prevailing systems of money. It's worthy to note, that this is also something Keynes foresaw--though he didn't live to see the collapse of Bretton Woods.

I'd now be curious if you have any specific insights on the influence of Keynes on MMT. That is mostly just a point of curiosity, as well as being a question aimed at furthering my understanding.

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