The most common misunderstanding I hear from friends & family is even worse than this - that they have "already paid for" their Social Security and Medicare, as if they were drawing money out of a savings account they'd built up while working.
To clarify, it is not a matter of whether the government can pay the money obligations of Social Security. The question is if when the retirees use that money to buy things, will the economy be able to supply what they are trying to buy.
The non-productive part of the economy includes the part of the economy that collects debt interest payments from the people. Paying interest on debt makes banks richer, but it does not increase the economy's ability to produce what people want to buy.
All of what MMT says about deficits and the mechanics of money creation is wonderful, good and accurate. I applaud their research and their conclusions...but their analysis, as well as that of Keen, Hudson, Brown, Graeber, still needs to up their game to the level of paradigm concept. Why? Because a paradigm is an ENTIRE pattern CHANGE....not just a reform that while it may conceptually align with the new paradigm concept...doesn't change the ENTIRE pattern. Why does a new paradigm concept change an entire pattern/system, body of knowledge? Because it locates the operant problem and finds the specific way(s) to express the solution to it temporally. Thus all of the attending outnesses/anomalies that have plagued the old pattern go "poof". That's what occurred with the Copernican cosmological paradigm change. And paradoxically and amazingly to those addicted to reductionistic complexity ONLY (the onlyness is the problem not the method itself) it was a single concept that made the change that resolved all the problems. And it's important to point out that the final piece of the puzzle that made all of the anomalies of Ptolemaic cosmology go to the dust bin of history was the discovery of the elliptical nature of planetary orbits. In other words that temporal universe discovey/application was key. And that is why the 50% Discount/Rebate policy at the point of retail sale...is the analogous discovery...because the policy is both the expression of the new paradigm concept itself (Direct and Reciprocal Monetary Gifting) and the most efficaciously beneficial, most strategically powerful and universally participated in point in the entire economic/productive process.
And by the way I agree that productive capability does make a difference (even though inflation would not be a problem with a few regulations and reasonable rules for participation in the new paradigm program), but in the time between when the new paradigm was recognized and politically affirmed the help of government spending directed toward increasing domestic production (which is a wise economic and energy/ecological decision with or without the new paradigm) could easily be accomplished. And in the mean time if we had to continue importing from China etc. So what?
If deficits/national debt don’t matter (except when it causes inflation) what happens when no one wants to buy the bonds that is used to “create” the money?
We could if we took all off the illegals, foreigners that the government brings in, people on welfare who have never held a job and stopped and Democrats from stealing from it as a slush fund. Then there would be plenty of money!
Stephanie, The government may pay for things, but it doesn't fund them. It has no money or rather resources. When government allows one to sit and do nothing, another must fund that leisure. When government pays one to do work of little value, another must supply the goods and services to render that waste possible. You erroneously continue to think in terms of easily printed and manufactured money like the socialists and communists do. It has nothing to do with money and everything to do with resources. Idled people don't consume money, but resources supplied by others. Wasteful government workers do not consume money, but again the resources of others.
Your entire work is based upon a childish fiction that is being exposed across the world.
It gets very confusing whenever people hear that the Fed is buying its own treasuries. It sounds like a shell game . . . people ask, is the money really there? I believe in MMT mainly because it makes common sense once you grasp the issuer-of-currency vs user-of-currency bit. I don't pay much attention to the details of how the Fed makes it all work with the "yellow dollars" and "green dollars" Stephanie talks about. I know this is covered in The Deficit Myth but I'm stymied when trying to explain the Fed's role to friends who are suspicious of the Fed to begin with, thinking it is a tool of the plutocracy. (Well it is, but that's another subject.)
What we cannot afford is our ongoing support of the poor little billionaire class: Subsidies, tax breaks, loopholes, grants, and special financial considerations. They claim billions in corporate welfare.
And now the SCOTUS has opened the door to unfettered access of religious schools to our tax dollars. Religions are among the wealthiest corporations in the world.
It is so easy to blame those falling off the end of the conveyor belt
The shortcoming of MMT is that it focuses on the sector balances of the federal government sector and every other sector. That focus only takes you part way to understanding. The part that MMT does not address is how the money gets divvied up inside those other sectors. Right now, the Fed has probably created as much money as MMT would suggest. The problem is who in the other sectors is getting that money. MMT has no theory on that, and does not claim it does. The theory to explain the problem of who gets the money is pretty much only covered by Michael Hudson when he goes beyond MMT.
The trouble with "The Deficit Myth" is that it covers the area that almost doesn't matter anymore. It has nothing to say about the class distribution of the money.
The most common misunderstanding I hear from friends & family is even worse than this - that they have "already paid for" their Social Security and Medicare, as if they were drawing money out of a savings account they'd built up while working.
To clarify, it is not a matter of whether the government can pay the money obligations of Social Security. The question is if when the retirees use that money to buy things, will the economy be able to supply what they are trying to buy.
The non-productive part of the economy includes the part of the economy that collects debt interest payments from the people. Paying interest on debt makes banks richer, but it does not increase the economy's ability to produce what people want to buy.
All of what MMT says about deficits and the mechanics of money creation is wonderful, good and accurate. I applaud their research and their conclusions...but their analysis, as well as that of Keen, Hudson, Brown, Graeber, still needs to up their game to the level of paradigm concept. Why? Because a paradigm is an ENTIRE pattern CHANGE....not just a reform that while it may conceptually align with the new paradigm concept...doesn't change the ENTIRE pattern. Why does a new paradigm concept change an entire pattern/system, body of knowledge? Because it locates the operant problem and finds the specific way(s) to express the solution to it temporally. Thus all of the attending outnesses/anomalies that have plagued the old pattern go "poof". That's what occurred with the Copernican cosmological paradigm change. And paradoxically and amazingly to those addicted to reductionistic complexity ONLY (the onlyness is the problem not the method itself) it was a single concept that made the change that resolved all the problems. And it's important to point out that the final piece of the puzzle that made all of the anomalies of Ptolemaic cosmology go to the dust bin of history was the discovery of the elliptical nature of planetary orbits. In other words that temporal universe discovey/application was key. And that is why the 50% Discount/Rebate policy at the point of retail sale...is the analogous discovery...because the policy is both the expression of the new paradigm concept itself (Direct and Reciprocal Monetary Gifting) and the most efficaciously beneficial, most strategically powerful and universally participated in point in the entire economic/productive process.
And by the way I agree that productive capability does make a difference (even though inflation would not be a problem with a few regulations and reasonable rules for participation in the new paradigm program), but in the time between when the new paradigm was recognized and politically affirmed the help of government spending directed toward increasing domestic production (which is a wise economic and energy/ecological decision with or without the new paradigm) could easily be accomplished. And in the mean time if we had to continue importing from China etc. So what?
If deficits/national debt don’t matter (except when it causes inflation) what happens when no one wants to buy the bonds that is used to “create” the money?
We could if we took all off the illegals, foreigners that the government brings in, people on welfare who have never held a job and stopped and Democrats from stealing from it as a slush fund. Then there would be plenty of money!
Stephanie, The government may pay for things, but it doesn't fund them. It has no money or rather resources. When government allows one to sit and do nothing, another must fund that leisure. When government pays one to do work of little value, another must supply the goods and services to render that waste possible. You erroneously continue to think in terms of easily printed and manufactured money like the socialists and communists do. It has nothing to do with money and everything to do with resources. Idled people don't consume money, but resources supplied by others. Wasteful government workers do not consume money, but again the resources of others.
Your entire work is based upon a childish fiction that is being exposed across the world.
It gets very confusing whenever people hear that the Fed is buying its own treasuries. It sounds like a shell game . . . people ask, is the money really there? I believe in MMT mainly because it makes common sense once you grasp the issuer-of-currency vs user-of-currency bit. I don't pay much attention to the details of how the Fed makes it all work with the "yellow dollars" and "green dollars" Stephanie talks about. I know this is covered in The Deficit Myth but I'm stymied when trying to explain the Fed's role to friends who are suspicious of the Fed to begin with, thinking it is a tool of the plutocracy. (Well it is, but that's another subject.)
America can afford SS&MC to protect workers and to care for the least of us.
Fact: Total federal spending on a safety net for the poor costs the average taxpayer about
$400 a year
while spending on corporate welfare programs costs the same taxpayer about
$1400 a year.
(source: CBO figures) Corporate welfare programs are protected at the expense of the poor and powerless.
Facts on Corporate Welfare | Center for Effective Government www.foreffectivegov.org/node/341
What we cannot afford is our ongoing support of the poor little billionaire class: Subsidies, tax breaks, loopholes, grants, and special financial considerations. They claim billions in corporate welfare.
And now the SCOTUS has opened the door to unfettered access of religious schools to our tax dollars. Religions are among the wealthiest corporations in the world.
It is so easy to blame those falling off the end of the conveyor belt
For the excessive wealth & greed of the 1%
The shortcoming of MMT is that it focuses on the sector balances of the federal government sector and every other sector. That focus only takes you part way to understanding. The part that MMT does not address is how the money gets divvied up inside those other sectors. Right now, the Fed has probably created as much money as MMT would suggest. The problem is who in the other sectors is getting that money. MMT has no theory on that, and does not claim it does. The theory to explain the problem of who gets the money is pretty much only covered by Michael Hudson when he goes beyond MMT.
The trouble with "The Deficit Myth" is that it covers the area that almost doesn't matter anymore. It has nothing to say about the class distribution of the money.
That sounds reasonable but one thread with him was tediously repetitive.