A new 28 min. video by Dr. Stephanie Kelton on MMT - Politics Forum.org | PoFo

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May 29, 2019
Dr. Kelton gives a good interview on Modern Monetary Theory.
I like her points a lot.

I chaff at people who just assume that Mainstream economics has any relation to reality, to how modern economies operate. And so, why people listen to such airheads when they make policy recommendations.

Under the gold standard, such thinking was correct. This is the main reason that the world left the gold standard. That some nations were always getting shafted by the system as it was. Today, in the EU/EZ nations like Greece are being shafted again. MMT says that this is not necessary because of fiat money. In the US some people are being shafted in the name of sound finance which isn't necessary because the dollar is a fiat currency. That a growing economy NEEDS a growing supply of money because some people and corps. always want to save some money. And this ALWAYS means that there is less spending* which reduces GDP which generates tax revenue, so tax revenues will fall. Someone must spend for some other to have income. So, less spending means LESS total income.

Mainstream economics leave banks, credit, and money out of their model. After the GFC/2008 most people would not agree that they can leave money out of their model and get good results. It also assumes that there is one rational person who stands in for all the people in the economy. So, their model assumes that all the economic transactions in the US economy are that one person selling things to himself. [At least MMTers make these claims.]

.* . There is less spending because banks don't lend deposits, they create dollars to make loans. So, the deposits (being saved) just sit in the bank.

That says more about your own bias than anything […]

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