Lately, I’ve been writing about Social Security (here and here). With everything else that’s’ commanding our attention at the moment, it’s not a topic that feels particularly urgent. It soon will. The debates have already started, and I expect them to heat up after the midterms. Just think back to what happened after the midterm shellacking in 2010, when a newly-emboldened group of republicans lawmakers
Wasn't the American Rescue Plan of 2021, which sent $1,400 rebates to taxpayers, $2,800 for joint returns, and $1,400 for each taxpayer dependent, a major reason that we are now suffering 8.6 percent inflation? That is, we spent too much. This seems a real problem, not just a political constraint.
Isn't our bloated defense budget also a real problem? Can we just ignore it?
"Funding ever more generous entitlement programs could push the economy beyond its real resource constraint, specifically, full employment, and thus fuel inflation."
~ Stephanie Kelton
That's MMT pointing out that government spending does have restraints. Yes, endless money can be created by a few keystrokes at the Fed, but that's not the point or the problem. When those computer-generated dollars are spent by taxpayers and government entities in real time, our money supply will be flooded, which seems to be where we are at right now, and yet we're some distance from full employment.
What you're describing is monetary sovereignty, that is fiat creation of money by accounting entries. You're correct in your article. However, MMT and the rest of the very well considered monetary/economic/theoretical reforms still have not consciously recognized the new monetary
paradigm concept or the specific expression of that new paradigm in the specific places in the economic process that will make the economy flow like time.
Arrrrrrrrrrrrrrg … Stephanie, you, Mosler, and Robert Hockett are the most difficult reading I do each week. Also, the most thrilling. I have Dyscalculia so numbers and graphs are difficult, if not impossible, for me. When I found economic theory, via Robert, it was like reading a thriller I couldn’t put down.
MMT is so smart and simple to understand. It’s bloody frustrating that even well meaning policy makers are so thoroughly misled. Why are the chairman of the fed, sec of treasury, the damned federal reserve board, political appointees? Not sure how else one would do it but when I think of minds like Trump’s or Biden’s, for that matter, deciding who manages the economy, it’s, well … terrifyingly mind blowing.
Can’t think of it without thinking of Mosler’s stunning cars. Designed with the same elegant simplicity and logic of MMT, and would have changed the whole automobile industry when Elon Musk was still in high school. Mosler’s Consulier was shot down everywhere in media. Just like MMT and the principals that could pull us out of the quicksand that’s taking us under.
TIME FOR A BIG AD CAMPAIGN re SOC SECURITY. Something like, “Social Security – The Other Big Lie.”
I’m not a macro economist but this is what I have gathered from reading Stephanie Kelton and others.
In the end what we have is the ability of the market economy to produce goods and services desired by society. This depends on having the resources, infrastructure, and knowledgeable labor applying itself to the task.
We get money (a made up thing) as a means of bidding on these goods and services (real things) in this economy. We have to bid against everyone else who desires the same goods we want. If we increase the amount of money without increasing production we don’t get more goods we get higher prices.
We get more goods and services by taking care of and developing our resources, investing capital in infrastructure and research for more efficiency and capacity, increasing labor skills and applying it where needed.
Government needs to be a fair referee. It could help create a fairer, more equitable economy. I keep hoping.
"Constraints on spending are entirely political."
~ Warren Mosler
Wasn't the American Rescue Plan of 2021, which sent $1,400 rebates to taxpayers, $2,800 for joint returns, and $1,400 for each taxpayer dependent, a major reason that we are now suffering 8.6 percent inflation? That is, we spent too much. This seems a real problem, not just a political constraint.
Isn't our bloated defense budget also a real problem? Can we just ignore it?
"Funding ever more generous entitlement programs could push the economy beyond its real resource constraint, specifically, full employment, and thus fuel inflation."
~ Stephanie Kelton
That's MMT pointing out that government spending does have restraints. Yes, endless money can be created by a few keystrokes at the Fed, but that's not the point or the problem. When those computer-generated dollars are spent by taxpayers and government entities in real time, our money supply will be flooded, which seems to be where we are at right now, and yet we're some distance from full employment.
What am I overlooking or misunderstanding?
What you're describing is monetary sovereignty, that is fiat creation of money by accounting entries. You're correct in your article. However, MMT and the rest of the very well considered monetary/economic/theoretical reforms still have not consciously recognized the new monetary
paradigm concept or the specific expression of that new paradigm in the specific places in the economic process that will make the economy flow like time.
Arrrrrrrrrrrrrrg … Stephanie, you, Mosler, and Robert Hockett are the most difficult reading I do each week. Also, the most thrilling. I have Dyscalculia so numbers and graphs are difficult, if not impossible, for me. When I found economic theory, via Robert, it was like reading a thriller I couldn’t put down.
MMT is so smart and simple to understand. It’s bloody frustrating that even well meaning policy makers are so thoroughly misled. Why are the chairman of the fed, sec of treasury, the damned federal reserve board, political appointees? Not sure how else one would do it but when I think of minds like Trump’s or Biden’s, for that matter, deciding who manages the economy, it’s, well … terrifyingly mind blowing.
Can’t think of it without thinking of Mosler’s stunning cars. Designed with the same elegant simplicity and logic of MMT, and would have changed the whole automobile industry when Elon Musk was still in high school. Mosler’s Consulier was shot down everywhere in media. Just like MMT and the principals that could pull us out of the quicksand that’s taking us under.
TIME FOR A BIG AD CAMPAIGN re SOC SECURITY. Something like, “Social Security – The Other Big Lie.”
I’ve always wondered if the Fed could lend through SSI so the first interest payment from banks might fund an expansion of SSI.
Since all of us “owe” the debt we might as well get to retire on it.
As part of that I think that banks would need to be restricted to charging a rate less than double what they borrow at to close wealth inequality.
It’s been a long time since the USA needed 12 geographically dispersed Fed reserve banks to put money into the economy.
It’s not like we pony express cash around the country any more.
I’m not a macro economist but this is what I have gathered from reading Stephanie Kelton and others.
In the end what we have is the ability of the market economy to produce goods and services desired by society. This depends on having the resources, infrastructure, and knowledgeable labor applying itself to the task.
We get money (a made up thing) as a means of bidding on these goods and services (real things) in this economy. We have to bid against everyone else who desires the same goods we want. If we increase the amount of money without increasing production we don’t get more goods we get higher prices.
We get more goods and services by taking care of and developing our resources, investing capital in infrastructure and research for more efficiency and capacity, increasing labor skills and applying it where needed.
Government needs to be a fair referee. It could help create a fairer, more equitable economy. I keep hoping.