I tried to tell a lot of people the facts about money, mostly they thought I'm crazy. MMT is correct - Politics Forum.org | PoFo

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What MMT is saying has always been true since the world went off the gold standard in 1971.

The corona virus is so shocking to economies that it suddenly is obvious to almost everyone.
Prof. Bill Mitchell's blog post for Thur., 3/26/20 lays it all out.

The following are all untrue or lies --- Quoting Bill's blog post.
1. Fiscal deficits push up interest rates and crowd out private investment.
2. Deficits run up unsustainable public debt which mortgages our children's futures.
3. Deficits cause inflation.
4. Central banks cannot fund government deficits or else hyperinflation results.
5. Governments cannot promote growth and create employment.
6. Income support provided by the government undermines private incentives and subsidizes unemployment.
7. Essential infrastructure should be provided by the private sector.
8. The banking system should be deregulated because financial markets are efficient (always put funds into best value use).
9. The private market (price system) will always deliver outcomes that generate the most wealth for all.
10. Rising inequality does not undermine growth and prosperity.
I could go on.

Bill goes on to point out this article ---
"And overnight, the Financial Times published an Op Ed from former ECB boss, Mario Draghi (March 25, 2020) – [titled] We face a war against coronavirus and must mobilise accordingly – where he said: ..."

The challenge we face is how to act with sufficient strength and speed to prevent the recession from morphing into a prolonged depression, made deeper by a plethora of defaults leaving irreversible damage. It is already clear that the answer must involve a significant increase in public debt. The loss of income incurred by the private sector — and any debt raised to fill the gap — must eventually be absorbed, wholly or in part, on to government balance sheets. Much higher public debt levels will become a permanent feature of our economies and will be accompanied by private debt cancellation.

Acting to save the economy fro the shock that coronavirus is giving it (the economy) WILL NOT destroy the economy. Almost every conservative economic expert is saying this now.
But, this has always been true since the world went off the gold standard in 1971.

Link to the blog post.
Last edited by Steve_American on 26 Mar 2020 11:24, edited 1 time in total.
late wrote:
Your news ain't new, and your friends are the crazy ones.

Stiglitz is the best I've seen at talking about the implications, try Price of Inequality.

Not just my friends.
I have tried on line.
Very few said I was right.
So, lets do a poll.
Please, everyone who thinks that MMT is right give this here reply a "like".
So, we can see if coronavirus has changed the minds of many.
Slightly off my own topic.
The stimulus bills of nations currently being passed are *not* what MMTers would be doing.
They give too much money to businesses and the well off, and not enough directly to the mass of the people.
A lot of the money is therefore being wasted.
What*is* being done is sort of what MMT says is always possible.

OTOH, we are already hearing the bleeting about how and when this is going to have to be paid for.
How this is going to be a burden on our children.
That inflation will be caused. They say that any price rise is inflation. Well, the coronavirus crisis will cause changes in the prices of many things all by itself. How can we say which price changes are cause by the virus caused economic dislocation AND which are caused by our responses to keep people alive for 3-6 months in this crisis? MMTers say we can't tell which is which. But, the experts will say *all* the bad effects are caused by the response and none caused by the crisis itself. Do not believe them. Reality in Japan has *proven* that massive deficits year after year (even if bought up by the central bank) have not caused for 28 years now any high interest rates or inflation. MMTers say that an actual experiment by Japan has proven this.

MMTers also say BS about paying off the bonds someday. The bonds that are the national debt (of whatever nation you live in, except the EU or EZ) are also assets of the people of those nations. It is not necessary to take those assets from their owners. It may have been necessary decades ago when the world was on the gold standard. There is zero argument for why it is necessary now. If the central bank owns the bonds then the interest on them is paid back to the nation. It is exactly like a wife paying her husband back when he gives her a birthday present. If a pension plan comp. owns the bonds then the interest is needed by it to grow its assets so it can meet its obligations.
. . . The only people who have a lot of money to pay the taxes are the really rich and the super rich and they will block new taxes on them. Taxing the mass of the people to give a pension plan comp. cash for their bond doesn't help the comp. at all and devastates the people paying the taxes. It is pointless & harmful, and therefore evil. To even say it is evil. At least for experts. Most common people believe this and don't know any better, so they get a Pass. The experts are lying about it.

There is a crisis. People are dying. Many people lived week to week. They will need cash to buy food and pay bills or they will die in the next 3-6 months. This is a fact.
. . . It is evil to deny this fact.
. . . It is also evil to tell lies that stop necessary responses from being used. Stopping the responses will make additional people die for no necessary reason. Is this not *evil*? Is this not harmful (killing people) for no necessary reason. Is that not evil, and worse, evil in a crisis?!

We need to shut those people up or hold them accountable in some way. To lie in a crisis and make people die is evil. At a minimum we should not believe them. We should mark them as liars and rethink our past choices to believe them. We should demand they provide real world arguments for why they are right and MMTers are wrong. We should not any longer let them wave their hands at an imaginary world as proof that reality is the same as their imaginary world. When a real experiment is done or has been done that proves them wrong then we have to accept real experimental results and reject thought experiments.
. . . There are 3 real experiments that have been done to prove the neo-liberal economic experts are wrong. They are --
1] The 325 year long experiment in what happens when England, Great Britian, and now its called the UK has had a national debt and not paid it down hardly any at all for 325 years. Results are, Nothing happens.
2] The 28 year long experiment that Japan has done to see what happens when it has massive deficits for 28 years. Results are no inflation and no high interest rates.
3] The experiment done in 2014 in Germany to see what happens in a bank when it makes a 200,000 euro loan and that money is moved to a different bank while many graduate students watched the bank's officers do their thing. Results were, the money was created out of thin air and the depositors' money was not loaned out.

These are real world experiments. They should be taken as *proof* that the neo-liberal economic theory is false in these ways and maybe its false in many other way too.

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