Deutschmania wrote: In response , from the American Association of Retired Persons . https://www.aarp.org/politics-society/government-elections/national-debt-guide/faqs/why-cant-government-print-more-money/
And also this . https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778
And in addition , see this short article , from the same website . https://www.thebalance.com/how-is-the-fed-monetizing-debt-3306126 And lest you dismiss these points , as they might not be presented by a PhD. in economics , here is an article by Scott Summer . https://www.mercatus.org/bridge/commentary/why-hot-new-idea-economics-actually-bad-idea And lastly , under the Clinton Administration , the U.S.A. enjoyed a balanced budget . So it can be done . https://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/ , https://clintonwhitehouse3.archives.gov/WH/Work/102899.html
It's too bad the system here does not quote your whole reply.
The system deleted the parts where you didn't quote me too.
So, from memory.
1] Your authorities don't convince me. They may convince some lurkers, but MMTers have responded to all this many, many times.
2] The US Fed. Res, bank is not separate from the Gov. The evidence is: a] the US Gov. appoints all the top governors, b] US law tells it what to do, and c] all its profit (that is 97% of its revenue) is paid into the US Treasury. what sort of owner would let someone else runs his comp. and take all the profit?
. . . So, the claim that the Fed. is owned by someone else is all smoke and mirrors.
2] By law the US Gov. is not allowed to deficit spend without selling bonds. This is not set in stone. It can be changed just like every other law. Also, by law the Fed. can't buy US bonds directly, but it did during WWII and maybe in the GFC/2008. In any case this law can also be changed.
. . . MMTers point to Japan as an example that proves that the Gov. controls the interest rate it pays on its bonds. [BTW-- this is specifically not true for nations in the eurozone and maybe in the EU.] MMTers are always talking about nations with a fully fiat currency.
. . . MMtres have proved that there is zero risk that US bonds will someday have to be defaulted on. That is on that day all paper dollars will also be worthless. The UK, aka England, has had a national debt at the end of every year since 1694. Graphs showing it being paid down are really of the GP to debt ratio. The actual Pound-Sterling amount went up in 95+% of those years.
3] Currently, foreigners rush to hold dollars in every crisis. Your source is claiming this will end. MMTers have little doubt that this is true. They just shrug their shoulders and say, "So what?" They mostly care about the lives of the citizens and residents of the US {and all other nations with a full fiat currency}, they don't care a wit about damage being done to super rich foreigners. That is, if their dollars go down in value, that is their problem, and they are rich so they will not starve.
. . . So, currently the US buys more than it sells internationally. By definition this means foreigners are willing to exchange their stuff for electronic dollars {not paper dollars}. If they stop doing this then the US will have to make more of its own stuff. This will result in more jobs in America, why is this so bad?
. . . What your source was arguing there is that the mass of Americans must suffer now so that rich foreigners will not lose value someday later. That, the mass of Americans must act to insure that the bad bet that rich foreigners are making today will not blowup in their face someday, maybe. I ask the lurkers if this makes any sense for the welfare of Americans today? And we have the example of the UK/England that this someday may not come for 100 years, if it ever comes.
. . . So, MMTers claim that the US Gov. sets the interest rate it will pay on bonds, full stop. And,the law can be changed to let the Fed. buy the bonds like it did during WWII and also, to let the US Gov. just spend dollars into the economy like Pres. Lincoln did during the Civil War.
. . . Your sources are basing their opinions on a deeply flawed theory. A theory that has not made one correct prediction for the last 40 years. I asked here for an example of 1 such prediction made by a consensus of mainstream economists that was fairly specific {not someday there will be a recession} and that came to pass. Not one person had an example. This is strange for a so called science. There are several real sciences where there is an existing long list of successful predictions. But, in the "science" of economics people can't seem to be able to use google to find such a list for mainstream economics. The proof or test of a science is in the predictions it makes, and economics seems to have flunked this test with a score of zero. why should the lurkers believe the opinions you supplied of mainstream economists? My MMTers can point to at least 3 successful predictions. They are: a] that the EU's rules would not allow it to recover from the 1st recession that came along. Spain had an unemployment rate of over 20% IIRC in Jan. 20202 before coronavirus. This is not a "recovery" and is not "prosperity"; b] that Japan would not see high inflation, or high interest rates, or a lack of money for investments, or
see Japanese gov. being insolvent [all predicted to happen 'soon' by the mainstream based on the Japanese large continuing deficits], and c] that the GFC/2008 would come in the next 3 years and would be caused by private debt, not by Gov. debt. These all came to pass as predicted.
4] The US Soc. Sec.system is backed by the "full faith and credit" of the US Gov..
I have posted on this site a video of Allan Greenspan testifying under oath in Congress where he says, [not really a quote, but the gist] 'The question is not really, "can the US pay all SS payments on time?" The US can always create dollars and pay them to someone. The real question is, will the economy be able to produce the stuff that the SS clients will want to buy with the dollars they are paid?' This video is easy to find with google.
. . . Also, it would be possible and even moral for the Gov. to create a FICA tax on the profits made by machines that have displaced human workers, and pay it into the SS Trust Fund. But, in a pinch the Gov. can according to Greenspan just create the dollars to make the required payments.
5] MMTers claim that they predicted the 2001 recession, "the dot com bubble", because Clinton's surplus was sucking income out of the economy and this would soon lead to a recession. And this too came to pass as predicted.
So, basically, it all comes down to whose experts are you and the lurkers going to believe. Do they believe the mainstream who have been wrong in every prediction that have made, or do they look into MMT who's experts have been right 1000% more times than the mainstream have been.
. . . BTW -"Mainstream" includes both Neo-liberal economists and New Keynesian economists, and especially Austrian economists. OTOH, Steve Keen and Mark Blyth are not Mainstream and not MMTers either.
And again, I challenge anyone to find the list of Mainstream economic predictions that have come to pass and post it here.