A really good short essay that summarizes MMT for a beginner, by Bill Mitchell. - Politics Forum.org | PoFo

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http://bilbo.economicoutlook.net/blog/?p=41133

By short I mean about 7 pages single spaced, not sure really.
It starts out by reminding everyone that the EU & E-Z are different because the euro is created by the ECB [European Central Bank] not by each nation.

An Example ---
"Principle 5: The fiscal sustainability and fiscal space story
In the mainstream macroeconomics, the concept of fiscal sustainability and fiscal space is defined in financial terms.
. . For example, the IMF defines fiscal space in this way:… (the room in a government’s budget that allows it to provide resources for a desired purpose without jeopardizing the sustainability of its financial position or the stability of the economy. The idea is that fiscal space must exist or be created if extra resources are to be made available for worthwhile government spending. A government can create fiscal space by raising taxes, securing outside grants, cutting lower priority expenditure, borrowing resources (from citizens or foreign lenders), or borrowing from the banking system (and thereby expanding the money supply). But it must do this without compromising macroeconomic stability and fiscal sustainability – making sure that it has the capacity in the short term and the longer term to finance its desired expenditure programs as well as to service its debt.
. . MMT rejects these notions outright.
. . You cannot fiscal space or sustainability by some given deficit size relative to GDP or some threshold level of public debt to GDP or any other self-referencing ‘financial’ ratio.
. . The concept of fiscal sustainability cannot be meaningfully defined in terms of any notion of public solvency. A sovereign government is always solvent (unless it chooses for political reasons not to be!).
. . The concept of fiscal sustainability will not include any notion of financing imperatives that a sovereign government faces nor invoke the fallacious analogy between a household and the government.
. . The concept of fiscal sustainability will not include any notion of foreign ‘financing’ limits or worries about foreign ownership of a sovereign government’s debt.
. . We have learned that:
. . . . a] A sovereign government is not revenue-constrained which means that fiscal space cannot be defined in financial terms.
. . . . b] The capacity of the sovereign government to mobilise resources depends only on the real resources available to the nation.
. . But, saying a government can always credit bank accounts and add to bank reserves whenever it sees fit doesn’t mean it should be spending without regard to what the spending is aimed at achieving.
. . The concept of fiscal sustainability is more appropriately defined in terms of societal goals such as well-being.
. . For example, fiscal sustainability is directly related to the extent to which labour resources are utilized in the economy.
. . The goal is to generate full employment.
. . Once the government assumes its responsibility to achieve and sustain full employment there are specific requirements imposed on its spending.
. . In this blog post [of Bill's] – The full employment fiscal deficit condition (April 13, 2011) – we learned that:
The lessons, in summary are:
1. A macroeconomy is in a steady-state (that is, at rest or in equilibrium) when the sum of the spending injections equal the sum of the spending leakages. Whenever this relationship is disturbed (for example, by a change in the level of injections, however sourced), national income adjusts and brings the income-sensitive spending leakages into line with the new level of injections. At that point the system is at rest again.
2. The injections come from export spending, investment spending (capital formation) and government spending.
3. The leakages are household saving, taxation and import spending.
4. An economy at rest is not necessarily one that coincides with full employment.
5. When an economy is ‘at rest’ and there is high unemployment, there must be a spending gap given that mass unemployment is the result of deficient demand (in relation to the spending required to provide enough jobs overall).
6. If there is no dynamic which would lead to an increase in private (or non-government) spending then the only way the economy will increase its level of activity is if there is increased net government spending – this means that the injection via increasing government spending has to more than offset the increased drain (leakage) coming from taxation revenue.
7. To sustain full employment, the fiscal deficit has exactly offset the gap left by non-government leakages being greater than the injections.
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. . If the fiscal deficit is not sufficient, then national income will fall and full employment will be lost. If the government tries to expand the fiscal deficit beyond the full employment limit, then nominal spending will outstrip the capacity of the economy to respond by increasing real output and while income will rise it will be all due to price effects (that is, inflation would occur).
. . In some cases, a fiscal surplus will be required to sustain full employment without inflation should the non-government injections outstrip the leakages (say if the export sector is particularly strong).
. . A government operating according to those rules is conducting a sustainable fiscal policy.
. . The fiscal balance that arises under those conditions is whatever it is.
. . There is nothing intrinsically good or bad about a fiscal deficit of 2 per cent of GDP, compared to a deficit of 10 per cent of GDP or a fiscal surplus of 3 per cent of GDP.
. . Assessing fiscal sustainability requires us to understand the context which means we have to understand the saving and spending decisions of the non-government sector.
. . This also ties in with the MMT concept of fiscal space.
. . In a modern monetary economy, fiscal space has nothing to do with what the current fiscal balance is or has been and what the current public debt ratio is or has been.
. . A sovereign government can purchase any idle resources that are for sale in its own currency, including all idle labour.
. . The available resources (good and services) that are for sale in the currency of issue defines how much fiscal space the government has.
. . Such a government can never run out of funds in pursuing its goal to ensure all available resources are being productively deployed.
. . So a past deficit poses no particular constraints on what the government can do in the future, except to say that if the deficit has been properly calibrated to sustain full-employment fiscal[ly] then there will be less to do should the private sector contract."

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