[Steve_American]

@Deutschmania,
Using Japan as an example, the deficits
did *not* lead to a lack of money for investment,
did *not* lead to higher interest rates,
did *not* lead to high inflation.

Your sources are just so much BS. All based on a fantasy world where banks lend their depositor's
money and the Gov. borrows from depositors.

In real world deficits provide banks with the money they use to buy Gov. bonds.
Deficits replace the money being saved that therefore would be out of the economy anyway.
Deficits are the only wayto grow the money supply without also adding to private debt loads, debts that require growing debt repayment payments that someday get so big they can't be met and a Recession starts and then spirals down, down down. Gov. deficits are different because the national debt will never be paid down or paid off. and need never be paid down. Why take assets from the people to reduce the debt? It is just crazy to do this.

Again, your sources are all wrong.

[Deutschmania]

@Deutschmania,
Using Japan as an example, the deficits
did *not* lead to a lack of money for investment,
did *not* lead to higher interest rates,
did *not* lead to high inflation.

Your sources are just so much BS. All based on a fantasy world where banks lend their depositor's
money and the Gov. borrows from depositors.

In real world deficits provide banks with the money they use to buy Gov. bonds.
Deficits replace the money being saved that therefore would be out of the economy anyway.
Deficits are the only wayto grow the money supply without also adding to private debt loads, debts that require growing debt repayment payments that someday get so big they can't be met and a Recession starts and then spirals down, down down. Gov. deficits are different because the national debt will never be paid down or paid off. and need never be paid down. Why take assets from the people to reduce the debt? It is just crazy to do this.

Again, your sources are all wrong.

Your sources are nonexistent . You simply made a series of outlandish , and unfounded assertions .

[Steve_American]

Your sources are nonexistent . You simply made a series of outlandish , and unfounded assertions .

Well Deutschmania,
I have provided sources in other earlier posts.
I'm assuming that the "outlandish" assertions are the 3 you quoted.
With all due respect, everyone knows that Japan has had no high interest rates for the last 30 years.
And, everyone knows that Japan has had very low inflation for the last 30 years.
And, everyone knows that Japan has not gone bankrupt in the last 30 years.
And, everyone knows that Japan has not had a run on its currency in the last 30 years.

So, how are my claims outlandish? I'll grant they seem "unfounded" because the sources are in earlier posts.
____________________________ ______________________________

Or maybe the outlandish assertions are in this part, where I wrote, "Your sources are just so much BS. All based on a fantasy world where banks lend their depositor's money and the Gov. borrows from depositors.

In real world deficits provide banks with the money they use to buy Gov. bonds.
Deficits replace the money being saved that therefore would be out of the economy anyway.
Deficits are the only way to grow the money supply without also adding to private debt loads, debts that require growing debt repayment payments that someday get so big they can't be met and a Recession starts and then spirals down, down down. Gov. deficits are different because the national debt will never be paid down or paid off. and need never be paid down. Why take assets from the people to reduce the debt? It is just crazy to do this."

Which of these are "outlandish"?
Is it that banks don't lend their depositors money? This was proven in 2014 by an experiment where 200,000 euros were borrowed from a Germany bank while a bunch of graduate students watched what the bank's officers did.
https://www.sciencedirect.com/science/a ... 1915001477
If you skip down to this part you should see where they got the lon of 2000,000 euros and ...

3. A controlled empirical test
3.1. Predictions of the three theories
Before the test is conducted, the predictions of each theory about how the extension of a new €200,000 bank loan would be recorded are stated for convenience:

More links for this are ---
https://www.bankofengland.co.uk/-/media ... rn-economy
https://www.theguardian.com/commentisfr ... -austerity

All bank loans create an offsetting private debt *and* increase the money supply.
US Gov. deficits add to the money supply and if they are rolled over forever or are cashed in for newly created dollars or bought by the Fed. Res.; , then the bonds that are normally also created will never be paid off with money from tax revenues. The bonds count as part of the money supply and will do so forever. These statements are just tautologies and therefore facts. You can claim that the US Gov. can't roll the bonds over forever or pay to redeem them with newly created dollars. However, I'd like some source with a coherent argument and I will not accept an economists opinion as an authority. I have shown you that the UK, aka earlier 'England', has had a national debt in every year since 1694, for 325 years. For me this *proves* that a nation like the US can have a national debt forever.

I also asserted that it makes no sense for the Gov. to tax the poor to pay off bonds that are held by the rich or comp. like pension plans and insurance companies. The poor can't pay $21T over any period of time. It also makes no sense for the Gov. to tax the *rich* or *middle class* to pay off bonds totaling $21T that are held by the rich or comps.
. . . If you think this makes sense, then explain it to us.
. . . BTW, I also assert that by the time the cumulative surplus** had reached $2T or $3T the US would be in a deep depression, and to keep the surplus going taxes would have to be raised or spending cut by doing things like slashing welfare and allowing state funded unemployment insurance to go bankrupt. As a result millions of Americans would be starving. So, how can the Gov. ever have a cumulative surplus of $21T? My source for this last assertion is several Phd Prof. of Economics. I defy you to find one economist with a PhD who will deny this final claim.

.** . Here 'cumulative surplus' is the total of the surpluses of several to many consecutive years. Or, of surpluses plus deficits if there are any deficits in the consecutive years.
.

[Deutschmania]

All bank loans create an offsetting private debt *and* increase the money supply.
US Gov. deficits add to the money supply and if they are rolled over forever or are cashed in for newly created dollars or bought by the Fed. Res.; , then the bonds that are normally also created will never be paid off with money from tax revenues. The bonds count as part of the money supply and will do so forever. These statements are just tautologies and therefore facts. You can claim that the US Gov. can't roll the bonds over forever or pay to redeem them with newly created dollars. However, I'd like some source with a coherent argument and I will not accept an economists opinion as an authority. I have shown you that the UK, aka earlier 'England', has had a national debt in every year since 1694, for 325 years. For me this *proves* that a nation like the US can have a national debt forever.

In response , from the American Association of Retired Persons .

First of all, the federal government doesn't create money; that's one of the jobs of the Federal Reserve, the nation's central bank.

The Fed tries to influence the supply of money in the economy to promote noninflationary growth. Unless there is an increase in economic activity commensurate with the amount of money that is created, printing money to pay off the debt would make inflation worse. This would be, as the saying goes, "too much money chasing too few goods."

https://www.aarp.org/politics-society/government-elections/national-debt-guide/faqs/why-cant-government-print-more-money/ And also this .

How the Large U.S. Debt Affects the Economy
In the short run, the economy and voters benefit from deficit spending because it drives economic growth and stability. The federal government pays for defense equipment, health care, and building construction, and contracts with private firms who then hire new employees. These new employees then spend their government-subsidized wages on gasoline, groceries, new clothes, and more, and that boosts the economy. Over the long term, debt holders could demand larger interest payments. This is because the debt-to-GDP ratio increases and they’d want compensation for an increased risk they won't be repaid. Diminished demand for U.S. Treasurys would further increase interest rates and that would slow the economy.

Lower demand for Treasurys also puts downward pressure on the dollar. The dollar's value is tied to the value of Treasury Securities. As the dollar declines, foreign holders get paid back in a currency that is worth less. That further decreases demand and many of these foreign holders of U.S. debt are more likely to invest in their own countries.

At that point, the United States would have to pay exorbitant amounts in interest. The amount of federal spending today points to high-interest payments on the debt in the near future.16

Congress knows a debt crisis isn’t far away. In less than 40 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to baby boomers.17 That could mean higher taxes once the high U.S. debt rules out further loans from other countries, though Congress is more likely to curtail benefits than raise taxes. This would primarily affect retirees younger than 70, but it could also affect those who are high-income earners and not as dependent on Social Security payments to fund their retirement.

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

[Steve_American]

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.

[Steve_American]

OK, to the people who do not accept MMT yet.

I have made to following claims about economic history, I think it is up to one of you to make a claim that my "facts" are in fact not true.

1] The Gov. of UK, aka England, has had a national debt at the end of every single year since 1694. That is 325 years.
. . . a] It follows from this that the "someday" when a nation must pay off or even pay off 30% of it is usually far in the future.
. . . b] Climate Change deniers say that the damage is pretty far in the future, that is is not certain, and the damage to the economy to spend so much on a GND now will be felt *now*; and therefore it makes no sense to suffer now to avoid suffering later.
. . . c] I claim that if the logic in b] holds, then it also holds for the damage that may come from too much deficit spending which leaves too many assets in the hands of the non-gov. sector of the economy.
SO, one of you needs to show us that the UK has not had a national debt in every year since 1694.

2] As I understand it, the GDP is simply a measure of all the incomes of all the people and comp. in the US (or any other nation). When the US Gov. spends a dollar (i.e. every dollar it spends) it is someone's income. Therefore, reducing spending reduces the GDP and therefore the total income of the nation. When the US Gov. has a surplus this means not only does this reduce the GDP, but it also reduces spending by someone in the private sector who didn't get enough income as a result and so he spends less. This then causes another someone to spend less, and so on. So, if a surplus is continued for just a few years the GDP will stop growing, when it stops growing banks stop lending (and comp. and people stop wanting loans). When banks stop lending then (because banks do not lend out their depositors dollars) then the banks stop creating or reduce the number of dollars they're creating. The dollars they have been creating have all been spent and became someone's income at least once. So, by definition they added to the GDP. When these new dollars stop being created and spent this removes a big chunk of spending that is added to the surplus the Gov. is not spending. These 2 reductions in spending will cause the GDP to stop growing and shrink by quite a lot, so by definition a recession has started.
. . . Gov. deficit spending is different. It according to a] above need never be paid back. It has just become an asset of the people. [BTW-- remember that paper dollars are also just IOUs, just like a bond. Mainstream economists ignore this because before 1971 paper dollars were backed by gold. Now they are not backed by gold, so they are just IOUs. What the Gov. owes you is just a credit against the taxes and fees you owe it. My point here is that bonds and dollars are both assets of the people and not that different, and when economists claim that all the bonds must someday in someway be converted into dollars that what they are calling for ACTUALLY CHANGES VERY LITTLE.]

3] The Gov. of Japan has had a deficit in every year for the last 28 years.
. . . a] Japan has had inflation under 2% in every 1 of those years, under 1% in most of them, and under 0.5% for the last few years.
. . . b] Japan has sold all the bonds it wanted to sell in everyone of those years.
. . . c] Japan has not seen the interest rate on the bonds it has sold go up to more than 2% in any of those years.
. . . d] Currently the ratio of debt/GDP of Japan is around 235%. Of this the Bank of Japan holds about 40%of it. So, 40% is held by the people and comps.; and 195% is held by the Bank of Japan. In 2019 the US was 107%, and in the EU it must be less than 60% of GDP, but is higher for many incl. Germany with 63%. So, 235% is much more than 63% or 107%, and yet there are no problems.
. . . e] The yen (Japan's currency) is one of the strongest in the world.
. . . f] Japanese banks have *not* been unable to lend because they lacked cash to lend, at any time in those 28 years.
SO, someone provide evidence to refute any of these points.
. . . Lurkers, please take note, if no one even tries to refute my points then they stand unrefuted, and as the jury you must give strong weight to all unrefuted 'facts'. So, after you read this watch and look to see if anyone comes forth to refute my points.

4] People have provided links to so called experts who have made claims, I'll list some and reply to them.
. . . a] Banks lend their depositors money and so do not create money with every loan they make. I have provided 2 or 3 links to the economist who proved this is not true and to the Bank of England which reacted to this proof by accepting it. Now IIRC, soon after that, the BoE took it back and said the proof proved nothing. Now, persons of the jury, it is up to you to decide which statement by the BoE you will believe. The one based on the evidence, or the one later after time had passed that let it think more but also let interested parties lean on it to "take that back".
. . . b] Gov. debt crowds out private lending. See a] just above. Banks create dollars with every loan they make. Yes, banks appear to be constrained by Reserve requirements, however they are not. This is because when a bank makes a loan, the borrower always spends it. It becomes someone's income AND is deposited into the banking system. Now that it is in the banking system it adds to total deposits and this must be with reserve dollars because transferring the money between banks is done thru the Fed. Res. system and *must by law* be done with "reserve dollars". The larger the total of deposits is, the more reserve dollars the banking system has to meet its reserve requirements. In fact there is a system for overnight loans between banks at a 1 day low rate so any bank can borrow using that system to get dollars to meet its reserve requirement at a much lower cost than the interest rate on a loan it wants to make. Banks are *not* constrained as a result. Banks are constrained by the number of credit worthy customers who come thru their door who have decided that getting a loan is a good idea for them. This is their only constraint, IIUC.
. . . c] Someday too much national debt will cause or may cause people with money to demand a higher interest rate on new bonds being sold. Well, this has not happened to the UK ever and to Japan for the last 28 years. It seems the 'someday' never comes. Besides which the suffering is happening *now* and why is it better to suffer now to avoid possible suffering later, which may never happen?
. . . You may be and in fact likely are a part of the economy that is not suffering now. My reply to this is that if those others were not suffering your real income likely would go up some because the more money going round and round the more everyone will likely get some of it. And in the covid-19 crisis it may be more obvious that actually you do care about the welfare of all other Americans (or the citizens of whatever nation you are a citizen of). Did not Christ say you should love your neighbors and doesn't 'love' in that sentence imply that you care about their welfare? So, is it not Christian to care about the welfare of all others who live in your nation?

[Steve_American]

The people who disagree with MMT owe me nothing.
They do not owe me a reply.
However, they seem to lack anything to say to refute my factual claims.
This doesn't bother me I already believe MMT.
But, you lurkers should understand that they are not refuting my claims.
Please let me be clear. All the scary predictions being made by Mainstream economists are the result of smoke and mirrors. They ignore reality. They ignore facts that contradict their predictions. They ignore when their predictions don't happen. It is almost as if they are shilling for the 1%.

On another note.
Be warned that the current covid-19 crisis is disrupting the economy by reducing incomes and also the supply of good and services.
It is therefore, quite likely that when the economy reopens that there will be a spike in prices. Do not be fooled, this will happen in any case. The Gov. payments to support those who have been laid-off (the cure) will likely make this worse, but prices *will* change in any case. The economy has been damaged.!! The damage comes from the virus, not from the cure. The cure should only be seen as causing continuing damage if the prices keep going up and do *not* stabilize any time soon.

[Steve_American]

Lurkers,
It's 4 or 5 days after I made the last reply and still no one has got even one fact to contradict my claims.
1] The UK has had a national debt for 325 years and counting. It seem that the "pay-off day" never comes.
2] Japan has proven that predictions of bad things happening soon IF Japan deficit spends *massively* don't happen in 28 or so years.
. . . a] No high inflation.
. . . b] No high interest rates.
. . . c] No lack of money to lend by banks.
. . . d] No problem with the Bank of Japan owning 40% of the national debt.
. . . e] No problem selling Japanese Gov. bonds.
. .. . f] No run on the yen. The yen is still one of the strongest currencies in the world.
. . . g] The Japanese Gov. is not insolvent.

There are 8 claims there and not one has been refuted. They have not even tried.

[Deutschmania]

Here is what I hope will be the final reply from me to your incessant preaching of this modern monetary theory economic heresy . https://azizonomics.com/2013/01/02/why-modern-monetary-theory-is-wrong-about-government-debt/ , http://www.themoneyenigma.com/government-debt-inflation-the-important-role-of-fiscal-policy/ Your posting of multiple threads all harping on the same topic of propaganda , is rather annoying spam I think . And I don't think that anyone will be able to make headway in overcoming your apparent confirmation bias . Because , for you , MMT has become like a religious dogma . One in which you are brainwashed , and try to in turn brainwash others , even though most people , besides myself , have the good sense to just ignore you , and you end up just replying to yourself .

[Steve_American]

Here is what I hope will be the final reply from me to your incessant preaching of this modern monetary theory economic heresy . https://azizonomics.com/2013/01/02/why-modern-monetary-theory-is-wrong-about-government-debt/ , http://www.themoneyenigma.com/government-debt-inflation-the-important-role-of-fiscal-policy/ Your posting of multiple threads all harping on the same topic of propaganda , is rather annoying spam I think . And I don't think that anyone will be able to make headway in overcoming your apparent confirmation bias . Because , for you , MMT has become like a religious dogma . One in which you are brainwashed , and try to in turn brainwash others , even though most people , besides myself , have the good sense to just ignore you , and you end up just replying to yourself .

Well, Deutschmania, you are the one who labled MMT a heresy. "Heresy" is often used about religious disagreements. So, maybe it is your adherence to MS economic theories that is like a religion for you.

I do have a few, maybe 50, people who consistently read my posts. It is not many, I know. But, if I was just posting spam, then by now all the lurkers would know not to view my posts.

Got to go, more later, soon.

[Steve_American]

OK, I'm reading your 2 linked articles.
[I remind the lurkers that I mostly think that it is most people who have been brainwashed into believing a theory that is based on several or many *false* assumptions and then ignores *all* real world evidence that its predictions rarely if ever come to pass.]

Starting with “Why Modern Monetary Theory is Wrong About Government Debt” , JANUARY 2, 2013 BY JOHN AZIZ .
1] It was written in 2013, which is 7 years ago. This is pretty old, but it is what he found.
2] It makes the claim that “that large debt loads can lead to painful spells of deleveraging and economic depression as has occurred in Japan for most of the last twenty years:” And then provides a graph of Japans Gov. debt, private debt, and total dept to prove his point. The graph ends in 2008, which was kinda recent when he wrote it. He has a vertical line at 1990, so I think he meant from 1990 to 2008 (=18) or even 1990 to 2012 (=22). So, OK, he rounded the years to “20”, like I sometimes do.
. . . He also has a graph of US Gov. and private debt from 1920 to 2012 to illustrate his point that all debt is a problem. But he goes on to say, ”which means that when I talk about the dangers of growing total debt I am talking much more about private debt than public debt:” This seems to mostly *under-cut” his point and to make MMTers' point.
. . BTW, both graphs are not of raw debt, but instead of the ratio of debt to GDP. As I said about the 325 years of UK debt, this can make it look like the debt is falling while it is actually rising. So, he shows private debt in Japan falling a lot after
. . He goes on to make his main point. Which appears to be --- that the Gov. will get cold feet and revert to raising taxes to reduce the growth in the national debt or try to pay it down. He thinks that the Gov. is like a young person taking driving lessons, who is afraid to drive faster the 1st time the instructor takes them out on the freeway. Our student can't keep up with traffic even though there is *no* reason they can't, except unreasoning fear.
. . I suppose he has a point above where I bolded it. Japan has flinched at least twice and raised their sales or VAT. Bill (my MMTer who writes the blog for which I give you links) has said this about Japan raising the sales tax and causing GDP growth to slow. However, it is not *necessary* for Govs. to flinch. Until inflation rises to a point where it is a problem, it is not necessary to reduce deficit spending.
___________________________ _____________________________________________

Quickly. I have another prediction by MS economists that has never come to pass.
. . It is that it is possible for a nation to pay off its national debt by raising taxes or cutting spending and as a result running a surplus. [Both have the effect of reducing the after tax incomes of someone, which keeps them from spending which cuts the income of another, etc.]
. . I know the US did it from 1790 to 1820-something. However, a huge part of the Gov. revenue came from the selling of land between the Mtns. and the Mississippi River. The 2 main taxes were on whiskey and imported goods. And anyway, the surplus ended in one of (if not) the worst Bank Panics of the 19th cent..
. . MMTers predict that a surplus will always end when GDP growth is stopped by a lack of money and income that is caused by the surplus itself. This has been true in all 7 or so periods with a US surplus since 1788, which all led to Bank Panics &/or Recessions, including the dot-com bubble of 2001. There were a few Bank Panics &/or Recessions from other causes, like the GFC/2008 and the current covid-19 crisis.

[Steve_American]

I will now reply to his 2nd linked article.

The 2nd linked article is undated, but on the right of the page, it lists “recent posts and the most recent is June 6, 2016; that is almost 4 years ago.

I quote a paragraph after the introduction and insert in [ ] my comments,

The view [=opinion] of The Money Enigma is that fiscal policy plays a critical role in the determination of the price level. More specifically, a policy of persistent fiscal deficits combined with the accumulation of excessive government debt *will*, at some point, trigger [it says *will* trigger] a downward revision of market expectations regarding the future path of the “real output/base money” ratio [that this ratio is true is, here at least, just assumed]. In turn, this shift in expectations *may* [it says after the “trigger point is reached that this *only* may] result [not that it will result] in a significant fall in the value of money and an outbreak of high inflation.

It seems to me that the last sentence can just as well be written as, “In turn, this shift in expectations may or may never result in a significant fall in the value of money and may never result in an outbreak of high inflation.” After all they/he just said it 'may' happen.

Two paragraphs down they say and again I insert my comments,

This perspective ignores the historical experience of many less developed countries [that always have debt in a foreign currency] that have seen a massive collapse in the value of their currency and accompanied hyperinflation driven by fears of fiscal unsustainability. Unfortunately, there seems to be a view that somehow the Western World [which never have debt in a foreign currency] is “different” [because it is *massively* different] and immune to these forces.

Well, MMTers go to great lengths to explain that they are talking about only certain nations. Not nations in the EU & EZ and not nations that owe the IMF or foreign banks (etc.) money denominated in a currency that they don't issue.
. . . IMO, professional economists who can't see and tell you about this difference are most likely lying to you at the behest of their paymasters, or are sunk so deep in their dogma or just so stupid that they can't see the difference.

Next the linked article tells us to “read the following article, titled “Inflation and Debt” written by one of the leading economists of our time, John Cochrane, Professor of Finance at the University of Chicago Booth School of Business.” [Note, this Pref. is from the questionable Chicago School and is dated 2011.]

But these questions miss a grave danger. As a result of the federal government's enormous debt and deficits, substantial inflation could break out in America in the next few years.

. . . It is now 2020, or 9 to almost 10 years later, and there has been not high inflation in America. This is just another failed prediction. He said there is a grave danger of inflation in the few years after 2011 and we had no inflation. So, why should I read his opinions? Obviously, he has no idea what starts periods on high or hyperinflation.
. . . I linked about a year ago here to an article by the Cato Inst. that was about ALL the hyperinflations after 1800. All 57 of them were after 1900. All of them were a result of a large shortage of something. It was usually food, but in the case of Weimar Germany it was gold, because they had to pay the reparations in gold. The common saying is “Too much money chasing too few goods”. The “too few goods” is the more important element because it comes first and then the Gov. creates more money to make it change from *high* inflation into hyperinflation. And when the “goods” in question are food, the people have no, or little, choice but to pay what the sellers demand.

The original linked article then goes on to say this,

In other words, the government has only two choices when it considers how to fund a budget deficit: either it can issue debt or it can create money.
This is very similar to the choice faced by a corporation that is trying to finance its operations. A corporation can either issue debt (a fixed claim over future profits) or issue equity (a variable claim over future profits).
The view of The Money Enigma is that we can extend this analogy.
Ultimately, society generates only one primary source of economic value that it can use to finance public spending: real output. When society does not wish to fund public projects by taxing current output, it can create (using the legal structure of government) claims on future output. Just as a corporation can create fixed and variable claims to future cash flows, so society (via government) can create fixed and variable to claims to future output that it can use to finance current deficits.

I put on bold above the key sentence in the argument and underlined another one. Now, I question the truth of the bolded sentence. Is it true that a corp. selling more of its stock is the same as a nation creating more of its own currency by selling bonds to itself to partially finance deficit spending? [The other part being with bonds sold to the people or comp..]
. . . MMT goes to a lot of trouble to prove that in the US and in other nations, the Fed. Res. or Central Bank is part of the Gov.. Most of you don't accept the proof. I will assume that it as proven here. [If you want to argue it some more, I will argue it later.] The key sentence above is false because the Gov. sells bonds to itself and corps. sell their stock to others. Corps. can't create money by selling stock to itself, or can it? Under current practice, (now in the covid-19 crisis) the US Gov. deficit spends and the Fed. buys (many of) the resulting bonds. It would also be possible for the Gov. to just deficit spend and not create bonds, but this would require a simple change in the law, though.
. . . Let me be clear. Nations can create more of the money they issue. OTOH, banks do this also every time they make a loan. This is why it is not possible for the Central Bank of any nation to actually control the money supply. However, there is a big difference between money that the Gov. has created and money that a bank created, that is they are *not* the same. No one has to make payments on the money the Gov. has created, specifically by getting the money from someone else, while the borrower must make payments on the money they borrowed from a bank. This difference has the important effect that at some time in the future (either gradually with the payments) or in a lump sum (during a bankruptcy or default) the money that was created will be destroyed. And, this destruction of money will trigger a Recession or be part of the deepening of it.
. . . Yo will notice that they/he never talks about the money created by bank loans. This is probably because they/he doesn't believe the proof and Bank of England admitting that banks create money every time they make a loan.

In Summary, I think I have refuted enough of their/his arguments to say that they/he is just wrong. Their main point is that the US Gov. is like a Corporation. That both create new money in the same way. They don't, so the whole argument is disproved.

Let me say again, that MMTers are perfectly aware of the risk of high inflation if the Gov is stupid. Or even hyperinflation if the Gov. does something *very* stupid. MMT has a Guaranteed Job Program that they have been working on to perfect for 25 years now. They say it will work as they say it will. OTOH, I have never seen an analysis of this program by any Mainstream economist. They just ignore it. MS economists always misrepresent what MMT says too. This last is key, when MS econ. tell you what MMT says, check that out for yourself. There is a 99% chance they got it wrong or lied.

[Deutschmania]

Well, Deutschmania, you are the one who labled MMT a heresy. "Heresy" is often used about religious disagreements. So, maybe it is your adherence to MS economic theories that is like a religion for you.

I do have a few, maybe 50, people who consistently read my posts. It is not many, I know. But, if I was just posting spam, then by now all the lurkers would know not to view my posts.

Got to go, more later, soon.

You initially said that you would not consider the articles I posted , based upon what seems to me to be an authority fallacy of discounting those whom are not economics professors , or something . I then pointed out in response that on the whole the intellectual inteligensia , in academia , regards MMT as being an economic heresy , in order to point out that even by your own elitist standards , you are regarded as being ignorant , and immature . Sort of like how the United States has been portrayed in these satirical videos , which in part brings up and ridicules MMT , just not by name .

But in answer to your tu quoque , I look up statistical data , and other factual information to counteract your claims . The other posters here can decide whom of us , if either of us , to concur with , after carefully weighing the evidence . If they aren't already bored by every topic you start being about the same spiel .

[quetzalcoatl]

...I then pointed out in response that on the whole the intellectual inteligensia , in academia , regards MMT as being an economic heresy...

Well this only holds true if you consider the neoclassical economics group to be the whole of economic intelligentsia. It is true they still hold positions of great influence in academia, government, and media - but their influence has radically waned after they failed to comprehend or provide workable solutions to two succeeding major economic catastrophes in little more than a decade.

Neoclassical economics is fatally flawed in the sense it is static - always searching for equilibrium solutions that don't (and can't) exist. It doesn't admit the possibility of exogenous historical changes that render its basic assumptions obsolete. It doesn't have any tools to address the periodic discontinuities (crashes) that plague make equilibrium states untenable.

The main reason neoclassical economic doctrine has survived so long is that it, by definition, assumes the status quo is permanent. This makes it of great value to elites who prosper under existing conditions.

[Steve_American]

@Deutschmania,
First they ignore you, then they laugh at you, then they say they knew it all along, then they fight you, then you win.
You seem to have reached the ridicule level.
Many MS economists have reached the 'there is nothing new here, we knew it all along level.
Other economists like Dr. Richard Koo have reached the 'you win' level, at least sort of.
So, maybe if I can convince enough of the lurkers and they each convince 10 others who convince 10 more others; we can change the world, AND WIN.!!

I'm taking this famous quote and adding things I've also heard to make my point to you.

As far as I'm concerned you have had very few, if any facts, and just quoted or linked authorities. Specifically you have not refuted any of my 8 main claims.
In the current crisis I especially like my claim that the UK, aka England, has had a national debt since 1694 {for 325 years} and never yet had to pay it off. [Not even when it lost its Empire, which seems like the time it would be required.] So, just why are we hearing economists now say that 'someday' our children will have to pay all this money we are borrowing in the crisis back somehow?
. . . It sees to this non-economist that 325 yr minus 237 yr == 88 years at least. But, maybe I should start the clock for the US in 1835 ["However, President Andrew Jackson shrank that debt to zero in 1835." source =Timeline of U.S. Federal Debt Since Independence Day 1776 on google]. Then, 2020 - 1835 == 185 years of debt, and then 325 yr of debt - 185 == 140 years before the US *must* start to pay its debt off.
. . . The UK has not even started to pay its debt off, so I calculated how long until it needs to start, and remember every year the UK delays starting to pay off its debt is also a year that the US can wait to start.

[Deutschmania]

Well this only holds true if you consider the neoclassical economics group to be the whole of economic intelligentsia. It is true they still hold positions of great influence in academia, government, and media - but their influence has radically waned after they failed to comprehend or provide workable solutions to two succeeding major economic catastrophes in little more than a decade.

Neoclassical economics is fatally flawed in the sense it is static - always searching for equilibrium solutions that don't (and can't) exist. It doesn't admit the possibility of exogenous historical changes that render its basic assumptions obsolete. It doesn't have any tools to address the periodic discontinuities (crashes) that plague make equilibrium states untenable.

The main reason neoclassical economic doctrine has survived so long is that it, by definition, assumes the status quo is permanent. This makes it of great value to elites who prosper under existing conditions.

It's not simply neoclassical economists who are critical of MMT , Keynesians such as Paul Krugman https://www.nytimes.com/2019/02/25/opinion/running-on-mmt-wonkish.html , Larry Summers https://www.washingtonpost.com/opinions/the-lefts-embrace-of-modern-monetary-theory-is-a-recipe-for-disaster/2019/03/04/6ad88eec-3ea4-11e9-9361-301ffb5bd5e6_story.html , and Kenneth Rogoff https://www.marketwatch.com/story/modern-monetary-theory-is-nonsense-just-more-voodoo-economics-2019-03-04 have also critiqued it . So it is not simply a black and white issue .

@Deutschmania,
First they ignore you, then they laugh at you, then they say they knew it all along, then they fight you, then you win.
You seem to have reached the ridicule level.

Your response is an example of the Galileo gambit . And also it is apparent that you do not understand the difference between satirical humor , used to make an illustrative point , and mere personal ridicule . This grimness is characteristic of narrow minded hardliners , according to the Advanced Bonewitz Cult Danger Evaluation Frame .

16 Grimness: Amount of disapproval concerning jokes about the group, its doctrines or its leader(s).

http://www.neopagan.net/ABCDEF.html As to the rest of what you said , I am not sure as to the veracity of your stated figures . As far as I can tell , either you're responding with loaded language , with the intention of confusing with technical jargon . https://www.decision-making-confidence.com/cult-tactics.html , or I am having what Scientology would call " misunderstood words " http://www.xenu-directory.net/opinions/zinj20061211.html . In any case , your wall of text is coming across to me as being no more than incomprehensible word salad . But this is what I found out about the UK national debt . https://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/ , https://en.m.wikipedia.org/wiki/History_of_the_British_national_debt So , as you can see , the rate of debt had fluctuated through the years .

[Steve_American]

[The system here snipped the quote from quetzquatal.]
It's not simply neoclassical economists who are critical of MMT , Keynesians such as Paul Krugman https://www.nytimes.com/2019/02/25/opinion/running-on-mmt-wonkish.html , Larry Summers https://www.washingtonpost.com/opinions/the-lefts-embrace-of-modern-monetary-theory-is-a-recipe-for-disaster/2019/03/04/6ad88eec-3ea4-11e9-9361-301ffb5bd5e6_story.html , and Kenneth Rogoff https://www.marketwatch.com/story/modern-monetary-theory-is-nonsense-just-more-voodoo-economics-2019-03-04 have also critiqued it .

[And it snipped out the quote from steve.]
So it is not simply a black and white issue . Your response is an example of the Galileo gambit . And also it is apparent that you do not understand the difference between satirical humor , used to make an illustrative point , and mere personal ridicule . This grimness is characteristic of narrow minded hardliners , according to the Advanced Bonewitz Cult Danger Evaluation Frame .
[And, one from some other guy.]
http://www.neopagan.net/ABCDEF.html As to the rest of what you said, I am not sure as to the veracity of your stated figures . As far as I can tell , either you're responding with loaded language , with the intention of confusing with technical jargon . https://www.decision-making-confidence.com/cult-tactics.html , or I am having what Scientology would call " misunderstood words " http://www.xenu-directory.net/opinions/zinj20061211.html . In any case , your wall of text is coming across to me as being no more than incomprehensible word salad . But this is what I found out about the UK national debt . https://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/ , https://en.m.wikipedia.org/wiki/History_of_the_British_national_debt So , as you can see , the rate of debt had fluctuated through the years .

Sir, I 1st looked at the link about the UK national debt.
I have said *repeatedly* that all sources for it are NOT the raw debt, but are instead of the % of GDP vs time.
and, guess what your graph is again of % of GDP vs time for the UK national debt from Jan. 1997 to May 2018. It does not even go back to 1800, let alone 1700.
As the economy of England, aka UK, grew in size and from some inflation the line on the graph sometimes went down. This is (IMHO) intended to hide the *fact* that the raw debt almost never went down.
. . Let me be clear. MS economists are saying the the US will have to have a surplus to pay back, at least, some of the current crisis borrowing, right? However, if it really is just the % of GDP that must go down then a period of 5% (or 10% or whatever %) inflation will make it go down. However, I really, really doubt that MS economists would be glad to see 5% (let alone higher) inflation and be saying that it is so good that the US national debt is shrinking so nicely, and that now we can ease up and stop making payments on the total raw debt (while still rolling over all the current debt).

So, your argument failed to grok a key point of my argument, one I had made about 4 times. And then having failed to understand my key point, went on to imply that a period of high inflation is sufficient to pay down the raw debt. Or at least, satisfy the call for such a pay down.
________________________ ________________________

You sir wrote before,

You initially said that you would not consider the articles I posted , based upon what seems to me to be an authority fallacy of discounting those whom are not economics professors , or something . I then pointed out in response that on the whole the intellectual inteligensia , in academia , regards MMT as being an economic heresy , in order to point out that even by your own elitist standards , you are regarded as being ignorant , and immature . Sort of like how the United States has been portrayed in these satirical videos , which in part brings up and ridicules MMT , just not by name .

Sir, you failed (it seems) to grasp that my modified famous quote was intended to to refer to the MMTers and MMT and was not because you laughed at me personally.
_________________________-________________________________

You also FAILED to understand my reason for discounting articles written by most or all Mainstream economists. It isn't that they have a PhD or are full Prof. f economics. After all I use the fact that MMT economists have PhDs and are full Prof. of economics at some university as evidence that they have some qualifications in economics.
. . . No, I have said about 4 times that I reject articles by MS economists *because* they are mired in group think and can't see that every real science starts with looking at reality, makes theories, and then checks them against reality as the final authority of truthiness. I have posted here sometime ago an OP about how 2 studies a decade apart found that about 90% of economics graduate students say that learning about reality is not useful in their study of economics. I can't imagine even 1% of Physics or Chemistry graduate students saying that. Therefore, the authors of your articles are either the teachers who teach that reality is not relevant to economics or they learned that as students themselves. . . . Also, MS economics is based on deductive proofs that use false assumptions. In logic, you can't use false assumptions to *prove* anything. So, economics uses false assumptions to reach conclusions (which they claim are all that can be done because human nature is fickle {or some such} and *are good enough*) and then refuses to test their conclusions against reality.
____________________________________-_________________________

You accuse me of writing walls of words.
Then you provide a post like the one I quoted here that has about 7 - 9 links to articles that if you had pasted every word in them here would result in a far bigger wall of words. My walls of words are mostly my words at least.
I'm not looking at your other articles because the 1st one was just wrong as I explained above.
____________________________-__________________________________

BTW, I'm seeing more and more "views" now. Both here and over in "Credit & Debt".
I think this is because the Gov's actions in this covid crisis are illustrating that MMT needs to be reconsidered in a new light.