A Conversation with Mark Blyth and John Friedman about Bidenomics and MMT, & also the new consensus. - Politics Forum.org | PoFo

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#15182165
Spend massive amounts of money the country doesn't have, get the country deeper into debt, print more money to pay for that debt.

Pretty much sums it up.

I'm not even sure all of this money is being used the most wisely or the most efficiently. A lot of it seems to be going to special pet projects.


I predict all this spending now might force massive cuts much later, and there will be a lot of suffering.
Many on the Left don't understand that. History repeats itself, it might be a situation like in Greece where the people were rioting in the streets because the government couldn't keep spending more money and had to have a balanced budget and start dealing with the debt it already had. Led to a decade of suffering.

You all will probably sabotage the country, and then when things turn south you'll just blame the rich, and conservatives when they try to steer things back to a balanced budget.
#15182186
Puffer Fish wrote:Spend massive amounts of money the country doesn't have, get the country deeper into debt, print more money to pay for that debt.

Pretty much sums it up.

I'm not even sure all of this money is being used the most wisely or the most efficiently. A lot of it seems to be going to special pet projects.


I predict all this spending now might force massive cuts much later, and there will be a lot of suffering.
Many on the Left don't understand that. History repeats itself, it might be a situation like in Greece where the people were rioting in the streets because the government couldn't keep spending more money and had to have a balanced budget and start dealing with the debt it already had. Led to a decade of suffering.

You all will probably sabotage the country, and then when things turn south you'll just blame the rich, and conservatives when they try to steer things back to a balanced budget.


Again Puffer Fish provides no evidence.

He has refused to discuss this with facts on both sides with me.
He refuses to explain why Japan has been "spending money it doesn't have and printing money" for 29 years now and still has almost zero inflation and bond interest rates. It also has no problem selling its bonds and has one of the strongest currencies on earth.
He refuses to explain what other nation can replace the US in terms of 'the world's reserve currency'. Nobody will trust China, Germany sells few bonds in any year so it will not meet the demand.

He, akso, went and used Greece as an example, even though I have told him many times that Greece uses the euro, and this difference is huge. He has not responded with reasons why this difference isn't huge.

His prediction is not worth the predicitons of all the MMT experts. He does not have a PhD in economics, nor is he a Prof. of economics, nor has he published any peer reviewed papers on econimics. Therefore, my 7 MMT experts who do have or done all those things, out vote him. Of course, his many, many MS economic experts do out vote my 7 MMTers. We need to do the experiment and settle this question once and for all.

Frankly, I want to do the experimant. To refuse to do the experiment will just cause suffering forever. If MMTers are riight, then there will be less suffering in the US and other nations with a fiat currency for decades going forward.
ALSO, THERE WILL BE MUCH MORE MONEY TO FIGHT CLIMATE CHANGE. But, he denies ACC too, IIRC.
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#15182188
Steve_American wrote:He refuses to explain why Japan has been "spending money it doesn't have and printing money" for 29 years now and still has almost zero inflation and bond interest rates. It also has no problem selling its bonds and has one of the strongest currencies on earth.

Because Japan has very low birth rates and a declining population, and because of that has been experiencing an intense deflationary pressure that has counteracted the inflationary pressure.

Due to the population decline, real estate and rents are becoming more affordable to the Japanese than they were 15 years ago.

If Japan was taking in immigration on the levels of the US or Western Europe, then that would very likely not be the case.

As for selling its bonds, investors in all the other countries are desperately looking for places to park their money, due to the monetary/fiscal policies going on right now among the other wealthier developed countries. But that is mostly besides the point, because almost all of Japan's debt is owned by its Central Bank, meaning Japan has monetized their debt over the years - printing money to spend it, which leaves an accumulated effect on who owns that debt now.
#15182190
@Puffer Fish,
I just saw this 63 page book or article in a link on another site.
The title is "The Senen Deadly Frauds of Economic Policy".
When you click on the link, you should see a blank sheet of paper. Just scroll down to see the first page. But keep scrolling down to the 7th "page" to see "page 13".
The 1st Deadly fraud starts on page 13. The stuff on pages 1 to 12, etc. is not the meat of the article.

Warrem Mossler is an MMTer who is not a professor. He was an investment banker on Wall St.

http://www.moslereconomics.com/wp-conte ... 2jcnBszQP6

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Last edited by Steve_American on 23 Jul 2021 07:17, edited 1 time in total.
#15182191
Steve_American wrote:He refuses to explain what other nation can replace the US in terms of 'the world's reserve currency'. Nobody will trust China, Germany sells few bonds in any year so it will not meet the demand.

Yes, well, when the US currency loses its reputation it will start to slide, and that slide will probably be fast.

Why would you want to push things to the edge and risk that?

That's like a husband trying to get away with as many affairs as he can without his wife choosing to leave him.
#15182192
Steve_American wrote:a blank sheet of paper. Just scroll down to see the first page. But keep scrolling down to the 7th "page" to see "page 13".
The 1st Deadly fraud starts on page 13.
http://www.moslereconomics.com/wp-conte ... 2jcnBszQP6

The author claims there is no risk of insolvency, because presumably the government can always print more money.

Well, the problem with that is it will still ruin the countries credit rating, the same as a default would.
No one in the future is going to lend more money if they think the government is simply going to inflate that debt obligation away.

The author also seems to be making drastic oversimplifications. For example, the government doesn't immediately shred the money you give them to pay your taxes.

It leaves me wondering if the author really understands how things actually work.

I could go on and on, but I'm not going to spend the effort in this thread. If you want to raise three or four specific points from that article in another thread, I am willing to debate the author's points there.
#15182195
@Puffer Fish,
So you're going to disappear.
If the Gov. doesn't shread the paper dollars you paid your taxes with, then they would need to put it in a safe in the building or move it with an armored truck. At least, if it was a lot of money. It really makes sense that it is easier to shread it. Shread it the same day too.

Also, the US Gov. did have its credit rating rduced. It made zero difference, just as MMTers said it would.

Your claim that 'nobody would lend the Gov. money if they knew it would just print dollars to inflate it away' is disproved by history.

In 1981 when Reagan took office the debt was about $1 T. Since then it has increased to now (some say) $25 T. And, still people are lending cash to the Gov.
Also, the Fed. now holds $7.8 T in US bonds. ["In fact, measured in dollars, the Federal Reserve currently holds more Treasury notes and bonds than ever before. ... As of April 14, 2021, the Federal Reserve has a portfolio totaling $7.8 trillion in assets, an increase of about $3.1 trillion from the $4.7 trillion total on March 18, 2020.", The Federal Reserve Holds More Treasury Notes and Bonds ...https://www.pgpf.org › blog › 2021/04 › the-federal-reser..] So, of the $25 T in US debt, the Fed. holds 7.8 T or about 31%. That seems like enough money printing to have spooked the bond buyers, and yet the US Gov. has no problem selling bonds. Also, bond yields on the secondary market do not currently show any "inflation premium", which is *proof* that the bond market for US bonds is still strong, even with the Fed. holding $7.8 T worth.

If a time ever comes that it can't sell bonds, THEN we can talk about raising taxes to pay down the debt or just balance the budget.

So, far ALL predictions of US Gov. insolvency have been WRONG.

Also, default is much larger than some inflation. In many defaults 100% of the loan was lost in inflation just 3% might be lost.

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#15182690
Steve_American wrote:@Puffer Fish,
So you're going to disappear.
If the Gov. doesn't shread the paper dollars you paid your taxes with, then they would need to put it in a safe in the building or move it with an armored truck. At least, if it was a lot of money. It really makes sense that it is easier to shread it. Shread it the same day too.

You're not making sense, and your argument is incoherent.

It's mostly irrelevant whether those taxes were paid in actual paper money or not.

We can both agree that they're usually not.

It's paid with money in bank accounts that represents a future obligation to theoretically pay paper money. That obligation is secured by a mortgage on property.

Of course it's a lot more complicated. Using simple words will never be technically correct.


Let's suppose, just for the sake of argument all taxes were paid in paper money and they shredded it as soon as they got it. How would that matter? Printing money and then destroying it is not really any different from collecting the money and then spending the money you've collected. The two are economically equivalent. (Sort of, not really, it's actually a lot more complicated, but not in the way that matters in this situation we are arguing about)
#15182691
Steve_American wrote:Also, the US Gov. did have its credit rating rduced. It made zero difference, just as MMTers said it would.

That's wrong too. That is the whole point of worrying about the national debt, because of the country's credit rating, long term.

Yes, it's true it might make not much difference in the short term if the entirety of that debt is being monetized, meaning government is printing money to pay it.
But even that's not really true. There still are some private lenders even if most of the debt has been monetized, and if those private lenders panic it could suddenly accelerate inflation when government has to monetize their share of the debt.

You claimed it makes "zero difference". Zero difference to what exactly? Please be more specific.
#15183167
Puffer Fish wrote:You're not making sense, and your argument is incoherent.

It's mostly irrelevant whether those taxes were paid in actual paper money or not.

We can both agree that they're usually not.

It's paid with money in bank accounts that represents a future obligation to theoretically pay paper money. That obligation is secured by a mortgage on property.

Of course it's a lot more complicated. Using simple words will never be technically correct.


Let's suppose, just for the sake of argument all taxes were paid in paper money and they shredded it as soon as they got it. How would that matter? Printing money and then destroying it is not really any different from collecting the money and then spending the money you've collected. The two are economically equivalent. (Sort of, not really, it's actually a lot more complicated, but not in the way that matters in this situation we are arguing about)


1st] The obgukation for the bank to repay you the money you deposited is secured by the FDIC and the full faith and credit of the US Gov., not by mortgages.

2nd] It's true that there is no difference between paying with paper and sending a check when you pay taxes. The point the MMT Profs. who use this argument is that --- because the Gov. can creadit bank accounts and its such credits never bounce (even if it has no money in its account, because that is how the Fed. Res. Bank systen works), the US Gov. doesn't need to tax or borrow to spend --- as long as it does it with restraint.

Can you and I agree that for the Fed. Res. Bank to by a US bond from a person is the same as printing money? That, this is the modern form of an old fashioned gov. printing money and spending it.

If we can agree on that then the law can be changed to let the Fed. buy US bonds directly. MMTers assert that for the Fed. to do that indirectly is functionally the same as doing it directly. Doing in indirectly just lets some bank or rich guy profit with zero risk.
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#15183169
Puffer Fish wrote:That's wrong too. That is the whole point of worrying about the national debt, because of the country's credit rating, long term.

Yes, it's true it might make not much difference in the short term if the entirety of that debt is being monetized, meaning government is printing money to pay it.
But even that's not really true. There still are some private lenders even if most of the debt has been monetized, and if those private lenders panic it could suddenly accelerate inflation when government has to monetize their share of the debt.

You claimed it makes "zero difference". Zero difference to what exactly? Please be more specific.


What I said is not wrong. So, far the reduction in the US Gov's credit rating has had zero effect. So far, zero.

Now about the long term. I suppose that there may be an effect someday. Until that happens though, nobody can say for sure what conditions will cause it to make a difference.

MMTers do not suggest that the Gov. can print unlimited dollars without inflation, and inflation can stop people and corps. from buying US bonds at low interest rates. So far, AFAIK, there has been no increase in US bond yields in the secondary market. This is where you would see signs of a coming problem. So far, there is no sign of a problem. Remember, that the US Gov. has deficit spent over the last 18 months an amout the MS economist would have in 2019 said WOULD CERTAINLY cause a lot of inflation. However, so far the price increases we have seen have just been a return to pre-covid levels, except for a few things like used cars and lumber that are seeing shortages. We can assume that it is the shortages that are causing those few signs of inflation, not the massive deficit spending. So far, AFAIK, the Fed. Res. Bank has not bought a massive amount of the bonds being sold.
. . . [In fact in another thread it was asserted that the pandemic has caused the rich people of the rest of world to want to buy US and European bonds. This is clear evidence that the rich of the world are not yet spooked by the scale of the US deficit spending.]

I keep saying that you, Puffer Fish, just make unsupported assertions. You provide little or no evidence to convince anyone that you are right. Those who agree with you nod their heads in agreement, but those who have not been brainwashed by taking economics classes MAY not be convinced by simple unsupported assertions.

If unsupported assertions are OK, how about this one? I have provided some evidence and examples in other threads, here I'll just point out that people are not *all* sociopathically selfish as economics assumes.
I keep asserting that most of modern economics is backed up by proofs that are based in large part on assumptions that are *obviously* false. In math, such a proof would never be published because the peer reviewers would be ROFLTAO (the T=their). All such proofs in logic are useless. Nobody except an economist can get away with publishing a paper that use a false assumption to prove anything. That is not how 'logic' is supposed to work.
. . . I assert that, and you ignore me. I dare you to explain how it is OK for economists to use false assumptions in their proofs and still get their conjectures to be considered 'proved'.
. . . Lurkers, if he ignores this dare, you should not believe his assertions. They are (almost) all based on unproven conjectures.
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