I've been telling you that MS econ is based on false assumptions, why doesn't this change your mind? - Page 3 - Politics Forum.org | PoFo

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#15190321
late wrote:They're nuts.


The "They" in the 'They're' there apparently means the Cato Inst.
So, you mean every single thing the Cato Inst. publishes is wrong. They never publish anything that is true.
Or at least, everything is so tainted that nothing can be trusted by you.

However, what I wrote above meant that the Cato Inst. *IS* trusted by conservatives, who are the main people who deny MMT by pointing at hyperinflation. And, in this case, what the Cato Inst. said, totally undermines the conclusion that printing excess money always causes hyperinflation if you wait long enough.
. . . So, MMTers say that the US has been deficit spending a lot [from in 1981 debt of $1T to debt of $27T now] for 40 years, and so far inflation has been quite low, except maybe some after the pandemic caused many shortages of things. But, the final effect is still out, because inflation has moderated in the last mon. or 2. Given this, MMTers say that we have waited long enough to really doubt the basic hyperinflation claim. Besides [I say] the MS Econ. proof for the claim is based on some false assumptions about economic reality.
#15190326
I'm writing this post now. . . . . . I'm done now.

The graph at the top right is the 1st graph I have ever seen of the US Gov. debt raw, without the ratio to GDP thing.
This my evidence that MMTers are right that all 7 US Gov. long term surpluses lead to bank panics or recessions/depressions.

Notice that before the huge increase for the Civil War there were 5 periods with large surpluses.
. . . Note that MMTers assert that every case led to a bank panic.
. . . Note that it plunged before 1836 when Pres. A. Jackson was paying the debt totally off.
. . . Note this led to the severe Bank Panic of 1837. Which really only ended with the Mex. War, 1846-1848.
. . . Another of these bank panics was in 1857, and it may have ended only with the start of the Civil War.
I can see another period with surpluses in the 1890s.
. . . Note that there was a small bank panic in 1890 and a much larger one in 1893.
. . . I wonder if this caused the Spanish-American War in 1898.
Notice that the next large surplus was through the 1920s.
. . . Note that it is followed by the Great Depression. This is the 6th or 7th case of MMTers' 7 cases.
You can't see it but the Clinton surplus was in the late 1990s.
. . . Note that it was followed by the dot com recession. Which Pres. Bush ended with his tax cuts.
. . . I wonder if MMTers are counting this surplus =>recession? This might be an 8th case.


https://www.google.com/search?q=graph+o ... 3sR75mfvFM
#15190341
B0ycey wrote:I don't say that MSc contradictions are no big deal. In fact I say they are a very big deal. However what I also say is that increasing the money supply is a big deal too. To you you think that all the economies problems can be printed away and all the contradictions will just go awaty and we can spend like drunken sailors and boom up the economy. So which economy has successfully done that? Germany, Argentina, Zimbabwe... or even your favourite goto point...Japan?


. . . Well, it certainly seems like you meant the 'contradictions' in MS econ. theory are no big deal. If you think they are a big deal, what will be your response? Will you find a new better econ. theory, or keep to the MS theory? Or maybe you already do use a new theory.
. . . MMTers also, worry about the money supply. The *fact* that you keep saying they don't means you have not groked MMTers theory. So, again, MMT asserts that the only constraint on deficit spending is the risk of inflation. Please, believe that.
. . . So, again, I reject your repeated claim that I believe that there is no limit on deficit spending. And, I like MMTers reject the use of the phrase "printing money" because the US spends with checks and direct deposits.
. . . See below for reply to "Japan?"

But that isn't assumptions of economics but your own assumption of what MSc economists think. It is largely accepted that bubbles, growth, recession and inflation is part of the system with everyone who studies economics. What the national Bank will do is try and control these things with interest rates. But that isn't a fail-safe. And when the economy goes pop, they national Bank then does QE (MMT in name) to solve one contradiction which in turn creates another. But given you think printing money is the answer, you need to explain that despite pretty much doubling the national debt 13 years ago and create even more debt today with our Covid response, why the economy of all major markets barely have had growth that makes a single digit for the past 13 years and why inflation seem to be happening now? Surely if increasing the money supply means we all spend more, why are we not spending more. The answer is simple. All that money, goes into property, rent not spending and that is what you should learn from Japan.


. . . Like I said, those assumptions are taken from others. I just choose to use them from much longer lists.
. . . Again, it is your assumption that I believe that deficit spending is the answer. My assertion is that we have not yet approached the limit on deficit spending. There are over 10 M unemployed now, IIRC. There is no reason to think that we can't use more raw resources. Of course I assert that we use those raw resources to mainly fight ACC and not to just restart consumer spending.
. . . Yes, you are right. Almost all of the deficit spending and QE has been spent wrong. Yes. it did go to the rich to fast who just saved it because what else can the do with it when demand by the masses is low? So, my answer to you is, that savings has been high. Savings by the rich has been high. So, high that the amount of the deficit spending and the way it has been spent meant that there has been low inflation. I assert that the masses would benefit from deficit spending that will help them. And the regs. may be needed to keep "rent seekers" from using their monopoly power to suck them up and save them, where they are useless to grow the economy.
. . . However, I also assert, that economic growth must be contained in the near future because of ACC.

The deposit money doesn't make money unless it is lent out, who says otherwise? That is the whole point. But really the deposit money is never lent out but as an insurance to back up loans anyway. When people say that banks create money when they issue a loan, this isn't entirely wrong. However they need the deposit money to back it up so to remain solvent. That is known as a fractional reserve. Fractional reserves aren't necessarily needed, however if loans become toxic due to default and there is a run on the bank like what happened to Northern Rock, the bank will run out of money. Loans should be regarded as assets, and like all assets they can lose value.


No reply needed.

Although given you are claiming the banks aren't lending at the moment, which isn't true but they are more careful who they lend to now I might add, that should be all the information you need to know that creating loans aren't without risk for the bank.


I wonder where you got the idea that I said banks are not lending now?
Maybe where I spoke about the beginning of many recessions that are started when the people can't afford to make larger debt payments and so stop borrowing. This is the start of that kind of recession. Then it continues as banks react to the drop in spending (all borrowing is soon spent on something).
. . . To be clearer I have learned about 3 kinds of recessions.
1] That kind. An example is the GFC/2008. This is the most common.
2] The kind that starts when the Gov. has run a surplus for a few years so incomes drop. An example is the dot com recession of 2000 or so. MMTers assert that the US has had a surplus 7 times for a few years, and in *every* case the surplus caused a bank panic or recession.**
3] The 3rd kind may be called a black swan recession. Examples are after 9/11 and the covid pandemic recession.
.
#15190349
Steve_American wrote:. . . Well, it certainly seems like you meant the 'contradictions' in MS econ. theory are no big deal. If you think they are a big deal, what will be your response? Will you find a new better econ. theory, or keep to the MS theory? Or maybe you already do use a new theory.


A better system would be to get rid of money full stop. Currency is nothing short of being an IOU, and because for profit to exist, the concept of debt must also exist that is a contradiction. And given the Capitalist model is based on gain (profit) so we must also have losers (debtors). There is no getting around that. Or there is, return the liability to the state and recoup that via taxation. But that isn't without contradiction either. Marx has written about surplus labor, surplus value, reserve army of labor, exploitation of labor and surplus value to land ownership specifically. Then there is marginal product theory and the paradox of value. In other words, we can return the liability to the state, but we must be able to gain that liability somehow in order to pay that tax in the first place and as such the profit motive remains (invisible hand) and you don't get the full value of your labor if you are the proletariat because of the profit motive and land ownership means not only do you pay tax and utility into the system, but you must also pay to exist as well. And in laymen, that means the debtor cannot always be the state and that causes new social conditions which then drive the state and new solutions are needed which in turn creates new contradictions (Dialectical Materialism).

. . . MMTers also, worry about the money supply. The *fact* that you keep saying they don't means you have not groked MMTers theory. So, again, MMT asserts that the only constraint on deficit spending is the risk of inflation. Please, believe that.
. . . So, again, I reject your repeated claim that I believe that there is no limit on deficit spending. And, I like MMTers reject the use of the phrase "printing money" because the US spends with checks and direct deposits.


Well we are getting somewhere then. Sure I was aware that MMT didn't believe the money tree existed, but I wasn't sure you understood. As long as you fully understand that the solution is not more money into the system, to pay people to sit on their ass and not be productive or that more debt isn't without consequences anyway then we agree. Japan should be your warning. Or perhaps it should be Argentina. Pick one. Don't care which, but don't think handouts are the answer to this.

. . . Like I said, those assumptions are taken from others. I just choose to use them from much longer lists.
. . . Again, it is your assumption that I believe that deficit spending is the answer. My assertion is that we have not yet approached the limit on deficit spending. There are over 10 M unemployed now, IIRC. There is no reason to think that we can't use more raw resources. Of course I assert that we use those raw resources to mainly fight ACC and not to just restart consumer spending.
. . . Yes, you are right. Almost all of the deficit spending and QE has been spent wrong. Yes. it did go to the rich to fast who just saved it because what else can the do with it when demand by the masses is low? So, my answer to you is, that savings has been high. Savings by the rich has been high. So, high that the amount of the deficit spending and the way it has been spent meant that there has been low inflation. I assert that the masses would benefit from deficit spending that will help them. And the regs. may be needed to keep "rent seekers" from using their monopoly power to suck them up and save them, where they are useless to grow the economy.
. . . However, I also assert, that economic growth must be contained in the near future because of ACC.


The limit of deficit spending for the US specifically has been past years ago. The world economy masks the issue by artificially creating demand for Dollars via commodity exchange. And unemployment is down to paying people to stay home. As the benefits are reduced, the carrot also goes and people then have to work. In other words, excess borrowing today is reducing US productivity.

Having said that, the only reason inflation hasn't ballooned is indeed because the money hasn't gone into national circulation. Whilst it goes into savings it doesn't enter the market and as such doesn't have to opportunity to inflate prices. If you give everyone more spending power, inflation occurs. But perhaps it doesn't. I am on the fence on this. Looking into Japan specifically and their economy and their exploding bubble market, what happens when you give the poor greater spending power isn't that they spend more money in order to inflate prices. What occurs is they increase inflation in demand markets like property and perhaps that explains why for every crash we have, prices in retail always go up. And as such more money into the system doesn't make us all richer or able to buy more or even revive the economy. All increasing the money supply does is make the rich richer as their money is tied up into assets.

I wonder where you got the idea that I said banks are not lending now?


This. :?:

What Steve wrote a few posts back on banks lending wrote:How does depositing money into a bank create money? Unless the bank lends it. Which banks, now, do not do.


Maybe where I spoke about the beginning of many recessions that are started when the people can't afford to make larger debt payments and so stop borrowing. This is the start of that kind of recession. Then it continues as banks react to the drop in spending (all borrowing is soon spent on something).
. . . To be clearer I have learned about 3 kinds of recessions.
1] That kind. An example is the GFC/2008. This is the most common.
2] The kind that starts when the Gov. has run a surplus for a few years so incomes drop. An example is the dot com recession of 2000 or so. MMTers assert that the US has had a surplus 7 times for a few years, and in *every* case the surplus caused a bank panic or recession.**
3] The 3rd kind may be called a black swan recession. Examples are after 9/11 and the covid pandemic recession.
.


A recession occurs when growth isn't sustained. In reality that doesn't matter in principle. We have now had 13 years of shit growth and you know what, doesn't matter. Or it does, in terms of interest rates to service debt. But then you can reduce interest rates to nothing (or even negative), and solve the problem that way. So whilst I accept that Banks not lending may well cause a recession due to not lending to businesses for growth, bank savings are not the problem we are seeing today. In fact savings in the bank is most likely preventing inflation actually. The problem we have today specifically is closing the economy down for Covid19. You can explain why there is high unemployment, why we are not spending like we used to, why jobs opportunities have never been better, why real wages in skilled work has sky rocketed, our debt, a reduction in production and even the inflation we are seeing with our Covid response. Mass borrowing is not the answer to solve any of that. The answer is to get people back into work and more importantly than that, improve their wages with an increase to the minimum wage.
#15190356
I wonder where you got the idea that I said banks are not lending now?

This. :?:

What Steve wrote a few posts back on banks lending wrote:
How does depositing money into a bank create money? Unless the bank lends it. Which banks, now, do not do.

_____________________.______________________________._____________________

Sir, what I said banks don't now do is to lend their depositors money.
Since then I learned this.
. . . There is no way in hell banks can use their depositors' money, because it shows up on the bank's books as a liability, not an asset. The banks can't use it for anything, it is a liability.
#15190359
@B0ycey,
So, if money is eliminated, what will society use instead? Barter? Gold coins?
____________________._____________________________.____________

Sir, you wrote. "The limit of deficit spending for the US specifically has been past years ago. The world economy masks the issue by artificially creating demand for Dollars via commodity exchange. And unemployment is down to paying people to stay home. As the benefits are reduced, the carrot also goes and people then have to work. In other words, excess borrowing today is reducing US productivity."

The highlighted part is just your opinion. You assert this.
. . . You then provide some words to explain why you believe this. These words don't convince me.

It doesn't make me believe you more, to know that you hate money itself.

You don't grok that US fiat dollars do not have to be created by issuing debt to match them.
Japan has its BoJ holding about 45% of the bonds it has issued. This means as much as a husband owing his wife 45% of their yearly income. He can pay it any time by writing a check on their joint account that she deposits into the same account.
_________________._____________________________.___________________________

Of that last part I can agree that the main problem with the economy has been that wages have gone down for 40 years if the CPI had been calculated correctly.
In the 90s, the masses borrowed to keep spending until 2008. Then that really slowed down.
________________________._____________________________-.______________________

Imagine this.
The Gov. and state govs. tax almost all the excess income away from the rich and find a way to provide it to the masses.
This analogy is flawed, but here goes. [It confuses flows and stocks.]

There are 2 swimming pools, a small one representing the rich and a larger one representing the masses. Both pools are almost full.
There is a hose and pump system that moves water from the masses' pool to the riches' pool. [This is how the capitalist economy works normally.] If this is all there is, then slowly the masses' pool will empty, while the riches' pool fills-up and overflows to run to the sea.
. . . This is clearly unstable. [Only massive rainfall can keep it stable, enough to cause floods.]

Now, I add the taxes I mentioned just above. I add another hose and pump system that pumps about the same amount of water out of the riches' pool back into the masses' pool.
. . . This system can be stable if rain adds enough water.
. . . Here the rain is new money being added to the system by the Fed. Gov. without creating debt.
Last edited by Steve_American on 15 Sep 2021 00:43, edited 1 time in total.
#15190363
@Steve_American

I don't know how to read your post given the format of it is unbelievably shit. But I think you have three points:

1. What would we do without money?,
2. I am here to convince you???
3. We don't need to pay off the national debt!?

1. "From each according to his ability, to each according to their needs"

For point one I would just explain that we are the only animal on the planet that operates using currency. It is also a new concept in human history anyway and fictional in its value. That is to say, its value is because we accept it has value and actually has no value anyway. So what would happen if we didn't use money? We would have to be more cooperative like the rest of the animal kingdom. Read Mutual Aid for more info. And no, society won't go backwards. You don't lose the things you learn. You adapt. The SU didn't fail because it didn't innovate. It failed because it didn't innovate in the interest of society but in the interest of the state. So its real economy stagnated but didn't go backwards I might add.

2. I am not here to educate but to teach. I don't care what you believe but as you said you don't think money printing is the answer, I don't know what you keep bitching about actually. But to answer why I think the US dollar has been over printed already, it is because the Dollar is being used as the INTERNATIONAL transaction currency and this is masking the problem into the future. Euros are already becoming the new reserve currency anyway and we are slowly moving away from Oil. So what are we to do with these new Dollars that enter the market? I suspect they will all go into real assets and savings increasing new contradictions like what is happening now. But sure, ignore what I say. I am not here to convince.

3. I am not saying we need to pay this money off. What I am saying is to prevent inflation and more problems in the future, borrowing should be used ONLY for growth and not to close down the economy, that we should aim to spend what we tax and as such curb borrowing and to entice and reward work and promote productivity. Paying people to sit at home does none of that.
#15190381
Steve_American wrote:
The "They" in the 'They're' there apparently means the Cato Inst.
So, you mean every single thing the Cato Inst. publishes is wrong. They never publish anything that is true.
Or at least, everything is so tainted that nothing can be trusted by you.

However, what I wrote above meant that the Cato Inst. *IS* trusted by conservatives, who are the main people who deny MMT by pointing at hyperinflation. And, in this case, what the Cato Inst. said, totally undermines the conclusion that printing excess money always causes hyperinflation if you wait long enough.
. . . So, MMTers say that the US has been deficit spending a lot [from in 1981 debt of $1T to debt of $27T now] for 40 years, and so far inflation has been quite low, except maybe some after the pandemic caused many shortages of things. But, the final effect is still out, because inflation has moderated in the last mon. or 2. Given this, MMTers say that we have waited long enough to really doubt the basic hyperinflation claim. Besides [I say] the MS Econ. proof for the claim is based on some false assumptions about economic reality.



"You don't need to eat the whole tub of lard to know it's gone bad."

We've gone over MMT before, it's flawed. MMT or Cato kooks, you need better sources.
#15190497
late wrote:"You don't need to eat the whole tub of lard to know it's gone bad."

We've gone over MMT before, it's flawed. MMT or Cato kooks, you need better sources.

Based on this reply of yours,
it seems like you would like me to stop responding to you.
OK, I can do that, sort of.
I still need to restate my position for the lurkers.
I don't think I need to let your opinions that slam MMT stand un-refuted.

So, is it OK for me to respond to the lurkers?
If you don't ask me to address you, I will address the lurkers.
#15190752
Steve_American wrote:The MMT-JGP offers a job to all who want one.

That is almost as absurd as offering a marriage to all who want one.
It is up to the local admin. to see that the work done is "socially useful".

The problem is not that socially useful work cannot be assigned, but rather whether it is then carried out in a way that is actually socially useful. If you hire someone to drive a truck, and he keeps crashing the trucks, that is not socially useful. As well as being too stupid, ignorant or lazy to do anything productive, people can be just temperamentally unsuited to perform much socially useful labor: e.g., too low in conscientiousness, agreeableness or emotional resilience.
Maybe only jobs that are producing things or services that are are sale are 'productive'. But then, all teachers in public schools, all gov. workers (local, state, & Fed.), everyone in the army, navy, & air force are not doing productive work.

That's not what I am talking about. Providing desirable public services and infrastructure outside the market is perfectly good and productive labor even if the value thus produced is given away to landowners instead of being recovered by location subsidy repayment (LSR) to pay for it. I am talking about people who are assigned to perform such labor but then don't do it, or don't do it well enough to rightly be paid for it.
Actually, the legal tender thing is not always present in all nations now with their own fiat currency.

Example? In which countries do the courts order payments to be made in something other than the locally issued fiat currency?
Also, legal tender laws don't say the seller can't jack-up the price when the fiat money is offered, or give a discount if some other means of payment is offered.

But when it comes down to the final resort of court-ordered payments, payment in local fiat money is considered to settle all debts.
. . . MMTers argument is that taxes in a nation give its fiat currency some thing that people must use the fiat money to do.

Likewise with any court-ordered payment.
Yes, MMTers don't have any policy directive except the MMT-JGP.

Right. They ignore the fact that unemployment is caused by landowner privilege, not lack of government spending, money issuance, or purchasing power.
But, they are not against taxes to fight problems like inequality and the monopoly power of landlords.
They do call for such taxes and other laws, or regs.

I know some MMT supporters like Michael Hudson have also supported land value taxation, but too many see federal money issuance and the JGP as a panacea, and don't understand how "all-devouring rent" will grind their utopian dreams to dust.
#15190755
Steve_American wrote:How does depositing money into a bank create money?

The bank's newly created demand deposit liability is generally accepted in exchange, so the customer can spend it. If the reserve ratio is less than 100%, the bank can also spend some portion of the money the customer deposited.
Unless the bank lends it. Which banks, now, do not do.

Correct. But the customer can spend the deposit balance, while the bank can also spend the cash the customer deposited, except for required reserves.
Crypto is not money. It is gambling tokens.

Crypto is not money yet, but it might be in the future. As for things that were money in the past but are not now money, understanding what money has been in the past and why is crucial to understanding what it is in theory, what it is now, and what it could be in the future.
#15190784
Truth To Power wrote:The bank's newly created demand deposit liability is generally accepted in exchange, so the customer can spend it. If the reserve ratio is less than 100%, the bank can also spend some portion of the money the customer deposited.

Correct. But the customer can spend the deposit balance, while the bank can also spend the cash the customer deposited, except for required reserves.

Crypto is not money yet, but it might be in the future. As for things that were money in the past but are not now money, understanding what money has been in the past and why is crucial to understanding what it is in theory, what it is now, and what it could be in the future.

AFAIK, someone had some money, They deposited it in a bank. This does not create more money because if they take some out the total in the bank and in the their hand is the same as it was before.

OTOH, I deny that banks can spend it. It is a liability on the bank's books.
Banks also can't lend it.

I was talking about types of money, as in the source of the money.
There are also forms of money as in coins, paper, bank accounts, gift cards, etc.

Crypto 'mining' should be banned in every nation. The world has better things to do with large rooms full of powerful computers using a lot of power made from burning coal than "manufacturing" gambling tokens. Until a nation's power is all made from renewable sources and not bio-mass, a stupid use needs to be assumed to come from the dirtiest source.
#15190815
B0ycey wrote:@Steve_American

I don't know how to read your post given the format of it is unbelievably shit. But I think you have three points:

1. What would we do without money?,
2. I am here to convince you???
3. We don't need to pay off the national debt!?

1. "From each according to his ability, to each according to their needs"

For point one I would just explain that we are the only animal on the planet that operates using currency. It is also a new concept in human history anyway and fictional in its value. That is to say, its value is because we accept it has value and actually has no value anyway. So what would happen if we didn't use money? We would have to be more cooperative like the rest of the animal kingdom. Read Mutual Aid for more info. And no, society won't go backwards. You don't lose the things you learn. You adapt. The SU didn't fail because it didn't innovate. It failed because it didn't innovate in the interest of society but in the interest of the state. So its real economy stagnated but didn't go backwards I might add.

2. I am not here to educate but to teach. I don't care what you believe but as you said you don't think money printing is the answer, I don't know what you keep bitching about actually. But to answer why I think the US dollar has been over printed already, it is because the Dollar is being used as the INTERNATIONAL transaction currency and this is masking the problem into the future. Euros are already becoming the new reserve currency anyway and we are slowly moving away from Oil. So what are we to do with these new Dollars that enter the market? I suspect they will all go into real assets and savings increasing new contradictions like what is happening now. But sure, ignore what I say. I am not here to convince.

3. I am not saying we need to pay this money off. What I am saying is to prevent inflation and more problems in the future, borrowing should be used ONLY for growth and not to close down the economy, that we should aim to spend what we tax and as such curb borrowing and to entice and reward work and promote productivity. Paying people to sit at home does none of that.


This rule does not apply to Gov. that issue their own fiat currency and do 2 other things that I have said here 5 times.

The US has not done this for at least since 1982. So, far inflation was stopped even though the Gov. was spending and borrowing like mad in the mid to late 80s. And then inflation stayed low from then until now. The debt has gone from about $1T to over $27T now. And no high inflation.
. . .The entire theory that you must base this opinion of yours on that I highlighted above on MUST be wrong. Experts who believe these sorts of theories have been predicting high inflation for 40 or so years now and have been wrong in all 40 of those years.


As to your thought that we now can do without money ---

I'm not going to convince you, so lurkers ---

He is just wrong. 1] Modern civilization is too complicated to allow us to keep it going without money.
And 2] Without civilization over 90% of us (and likely over 99% or us) would starve to death within a few years.

I agree with some translations of the Bible where is says that money *itself* is the root of all evil. But, we now have no choice, but use to it, and hope we can find a way to control the evil it can create.

Besides, in the current ACC crisis, it is not the time to try an experiment to see if civilization can be kept going without money
#15190838
Steve_American wrote:This rule does not apply to Gov. that issue their own fiat currency and do 2 other things that I have said here 5 times.

The US has not done this for at least since 1982. So, far inflation was stopped even though the Gov. was spending and borrowing like mad in the mid to late 80s. And then inflation stayed low from then until now. The debt has gone from about $1T to over $27T now. And no high inflation.
. . .The entire theory that you must base this opinion of yours on that I highlighted above on MUST be wrong. Experts who believe these sorts of theories have been predicting high inflation for 40 or so years now and have been wrong in all 40 of those years.


Well it can't be wrong given the US has been about to increase its spending due to it being essential for commodity exchange to use Dollars and as such the US has been in a fortunate position. The problem is what happens after the PetroDollar and the market is flooded with excess Dollars. And besides, we are seeing inflation now and that is primarily due to paying people to sit on their ass.

As to your thought that we now can do without money ---

I'm not going to convince you, so lurkers ---

He is just wrong. 1] Modern civilization is too complicated to allow us to keep it going without money.
And 2] Without civilization over 90% of us (and likely over 99% or us) would starve to death within a few years.

I agree with some translations of the Bible where is says that money *itself* is the root of all evil. But, we now have no choice, but use to it, and hope we can find a way to control the evil it can create.

Besides, in the current ACC crisis, it is not the time to try an experiment to see if civilization can be kept going without money


I didn't say we should ditch money actually, only that it is a solution to the contradictions we see today. If there is no profit, there is no debt. And the rest of the animal kingdom works off mutual aid anyway. What makes us so special?
#15190841
B0ycey wrote:Well it can't be wrong given the US has been about to increase its spending due to it being essential for commodity exchange to use Dollars and as such the US has been in a fortunate position. The problem is what happens after the PetroDollar and the market is flooded with excess Dollars. And besides, we are seeing inflation now and that is primarily due to paying people to sit on their ass.


I didn't say we should ditch money actually, only that it is a solution to the contradictions we see today. If there is no profit, there is no debt. And the rest of the animal kingdom works off mutual aid anyway. What makes us so special?

No need to reply to this. I already said it all.
Except to point out again that there was deflation last year, so I think we should compare todays prices to the prices 2 years ago, not to last mo. or to the same mo. last year.
#15190862
Steve_American wrote:AFAIK, someone had some money, They deposited it in a bank. This does not create more money because if they take some out the total in the bank and in the their hand is the same as it was before.

Right: removing the deposit erases the deposit money.
OTOH, I deny that banks can spend it.

They can spend any of the deposited cash that is not required as reserves.
It is a liability on the bank's books.

The deposit money is a liability of the bank, that's why the depositor can spend it, not the bank. The cash the customer deposited is an asset on the bank's books that balances the demand deposit liability, and the bank can spend it.
Banks also can't lend it.

In theory they could lend the cash the customer deposited, like a loan shark lends his vault cash, but they don't.
I was talking about types of money, as in the source of the money.

Me too.
There are also forms of money as in coins, paper, bank accounts, gift cards, etc.

Gift cards are not generally accepted in exchange. It is very important to be clear on what is money and what isn't, and the characteristics of the four (maybe five) different types of money I identified.
Crypto 'mining' should be banned in every nation. The world has better things to do with large rooms full of powerful computers using a lot of power made from burning coal than "manufacturing" gambling tokens. Until a nation's power is all made from renewable sources and not bio-mass, a stupid use needs to be assumed to come from the dirtiest source.

It's not clear how crypto is going to play out. It is a new technology and new technologies sometimes take time to work out the bugs (airplanes) and sometimes just flop (Segway).
#15190918
@Truth To Power,
OH, you meant to tiny percentage of deposits into banks that are made with cash.

I don't know if you are right, but I doubt it and it is so tiny it hardly matters.

OTOH, money is fungible, so I know banks do spend their income from interest, etc. Who is to say that they are spending the cash being deposited?

I watched the video posted somewhere here about crypto being a scam. In it it was asserted that the amount of electric power bring used to 'mine' crypto is more that the amount used by each of many nations in a year. This is a total waste, IMO. The video asserted that it is a ponzi scheme.
#15191954
Wow, just wow!
In the last week or so there have been over 1203 views.
This about 60 times the normal level.
Has this thread gone "viral"? The next few days will be interesting.

And, I was reminded of 3 more assumptions of the MS Econ. theory known as New-Keynesian.
1] That money can be factored out of the equations, which converts the economy into a "barter economy".

2] That all the people in the economy can be combined into 1 "representative person". This one person must own the one corp. below. Go figure?

3] That all the corps in the economy can be combined into 1 "representative corp.".

If it is true that Neo-Keynesians do make these assumptions, then some things follow ---
1] That the activities of banks don't matter.
2] That the interest rates don't matter.
3] That the "paradox of thrift" doesn't matter.
4] That all other conclusions of micro-econ. can be extended to the economy as a whole. However, just like the paradox of thrift, this in just not true in a money economy. That is, if everyone does it (like save more) it is good for the individuals, but it is not good for the incomes of everyone. Some people will see their income drop because so many other people are choosing to save instead of spend. In the assumed barter economy though, saving more doesn't matter. And, in an economy of 1 person and 1 corp. it doesn't matter either.
. . . However, the economy is not using barter, and it isn't just 1 person and 1 corp., either. Therefore, the conclusions of micro-econ. can't all be assumed to hold in macro-econ. Each one must be proved separately.
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#15192128
Steve_American wrote:Except to point out again that there was deflation last year, so I think we should compare todays prices to the prices 2 years ago, not to last mo. or to the same mo. last year.

I'm going to illustrate what I mean with a sketched diagram. The X-axis is the % of price changes, and the y-axis is time over a full decade A decade is shown. Ignore the dots, I don't know how to use tabs here.

What you see here is no inflation, followed by deflation, followed by the prices returning to the original level.

. . . . . . ______________________ . . . . . . . . . . .. . . . . . . . _________________________
. . . . . . . . . . . . . . . . . . . . . . . . .. \_ . . . . . . . . . . .. . . ___/
. . . . . . . . . . . . . . . . . . . . . . . .. . . .\______________/

I claim that the price increases shown above should not worry people in *any* way at all.
If this was the inflation line over the whole covid crisis (it just may need to be sloped up a little), then IMHO as a non-expert, there is no "high inflation" no matter how big a 1 line jump is.
That is, if prices fell by 50% and then increased by 100% of the reduced back to the exact level as before the 50% drop because of deflation, that then there was *no* "high inflation", because pries just returned to their original level.

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