When the government sells bonds in return for money, the government takes spendable money out of the system and replaces it with money that cannot be spent into the economy. So there is a difference between money and bonds. As long as MMT people like yourself try to sell the fiction that there is no difference between money and bonds…
When the government sells bonds in return for money, the government takes spendable money out of the system and replaces it with money that cannot be spent into the economy. So there is a difference between money and bonds. As long as MMT people like yourself try to sell the fiction that there is no difference between money and bonds, you will fail to gain credibility. You do know why the government sold bonds in WW II, don't you?
The truth is it doesn't really matter all that much if we turn new money into bonds because our national "debt" has been rising since forever...and nothing disastrous or sinister has occurred as a result. Having said this it would probably be better if we didn't give the banks the opportunity to amass huge treasury holdings as it is just a guaranteed stream of guaranteed income for them.
The money used to buy the bonds, at least by individuals, is simply money invested as opposed to money available to purchase things. This is a somewhat true but not truly significant or operant way that current free market theory can claim that treasury debt is a way to prevent inflation. But like all old orthodoxies the policies of the new paradigm destroy such flimsy theoretics and find much better and effective ways of resolving problems like implementing beneficial price and asset deflation with a 50% Discount/Rebate policy at retail sale. (Whew! Everytime I write that problem solving, total inversion of temporal universe reality via an application of complete conceptual opposition to the old/current paradigm it almost takes my breath away!)
but not truly significant or operant way that current free market theory can claim that treasury debt is a way to prevent inflation.
===== /quote =====
What on earth does this word salad mean? What free market theory are you talking about? How do you come to the conclusion that something is not operant?
She didn't say there was no difference. She said one wasn't more inflationary than the other. Good to see you haven't changed and still think you know more than everyone else all while having basic problems of interpretation.
I wish you would reply to my comments. When people say that bonds are like money, they really mean that bonds are like money in some respects. I may be unusual, but that kind of thinking gets me wondering that if something is like money in some respects, but it is not money, then in what respects is it different from money. Surely you and Stephanie Kelton know the difference. Why pretend there is no answer to the question about what is the difference. The curious get suspicious when we detect a refusal to address all the aspects.. Some of us are able to think for ourselves and fill in the parts some MMT proponents refuse to admit.
This refusal on the part of some MMT proponents saddens me, because there are honest answers from MMT that could address these issues. Honest answers are more convincing to me than are evasions.
Contemplate the word relevance, the intention to communicate the OPERANT/MOST IMPORTANT aspects of whatever is under discussion, and avoid committing what is meant in the following wisdom verse: "Ye blind guides, which strain at a gnat, and swallow a camel."
In other words you would rather ignore my remarks rather than address them. I don't know why my remarks should be so scary that you are afraid to address them. My remarks were important enough that you had to disparage their relevance.
Not correct. I answered your concern about the nitpick regarding the spelling out of the definitions of money which I believe has already been explained as: money is money readily free to be spent while bonds are investments of money and so they are at least once removed from money in hand.
Money IS the correct subject to analyze, the current operant concept/paradigm of new money is Debt as in Burden to Repay ONLY, and the new paradigm is Direct and Reciprocal Monetary Gifting.
Please analyze on that because the applications of the new paradigm, specifically the 50% Discount/Rebate policy at retail sale which is the very temporal universe expression of the new paradigm, destroy/make irrelevant virtually all of the orthodoxies, complexities and deepest problems of the old paradigm.
Time savings accounts at fed is not the same as spending! Spending is what could "possibly" cause inflation, not savings. Today the fed pays interest on Bank reserves. As Stephanie pointed out, she is not advocating one way or the other, but if it gets us past all this "Federal Debt" nonsense that would be better than all this drama.
WW2 bonds was just one way of decreasing demand (spending) in a "supply constrained" environment, such as during WW2. In Keynes book "How to pay for the War," I don't recall the word "Bonds" being mentioned. The question Keynes struggling with the UK government on, was rather to make "savings" a requirement or voluntary. In Keynes calculation he did not believe that voluntary savings would remove enough demand to prevent inflation based on his calculations of Wartime consumable consumer production. The US congress also used Keynes basic guidelines after entering the WW2 but choose to use War Bonds and Freedom Bonds as one way of decreasing demand (spending) "During War" (supply constrained). UK used savings accounts. The US choose bonds, the US bonds sold during WW2 were specifically designed to be long term bonds (10 year) reaching maturity after the war. Today most G-bonds purchased are "short or medium term" (2 to 10 years) bonds. When you take money out of, you're diversified managed IRA you will be taking bonds out many before meeting their maturity and full yield. Interest paid on the bonds converted back to its more liquid form will depend on the interest rate being paid at the time of withdraw in the bond auction market.
Regardless of what type of interest paying "time savings accounts" at the fed (US treasury or reserve interest accounts) they of in themself do not change spending. As of 2008 interest rates are set by voting members of the fed (as pointed out in the letter). These two things "do not affect" banks' ability to make loans. I don't see how these two things will change public saving rate. On the other hand, changing interest rates may increasing or decrease spending.
Over the last 2 decades the inflation experienced in the US has come as a result of abusive market behavior (not demand exceeding supply). Due to supply disruptions from COVID for the first-time sense WW2 the US has seen inflation come as a result of demand out stripping supply. There are others factors like Ukraine war (oil prices), change in what people consume and increased abusive market behavior this has led to an increased inflation.
Now we see the old "quantity theory of money" pulled out from under the rock and the entire conversation revolves around "too much money" causing inflation....."the government printed too much money!" "Can't do this it will cause inflation," "can't do that it will cause inflation."
During my entire adult life (65) the US has suffered from lack of aggregate demand, resulting in high unemployment and underemployment!..... Hardly a "too much money chasing too few goods story." Just more of the same manufactured problems using a straw man argument where there is no problem.
Thanks, Stephanie Kelton for all your hard work fighting the good fight. Future generations will read about you like we do Keynes now.
When the government sells bonds in return for money, the government takes spendable money out of the system and replaces it with money that cannot be spent into the economy. So there is a difference between money and bonds. As long as MMT people like yourself try to sell the fiction that there is no difference between money and bonds, you will fail to gain credibility. You do know why the government sold bonds in WW II, don't you?
The truth is it doesn't really matter all that much if we turn new money into bonds because our national "debt" has been rising since forever...and nothing disastrous or sinister has occurred as a result. Having said this it would probably be better if we didn't give the banks the opportunity to amass huge treasury holdings as it is just a guaranteed stream of guaranteed income for them.
The money used to buy the bonds, at least by individuals, is simply money invested as opposed to money available to purchase things. This is a somewhat true but not truly significant or operant way that current free market theory can claim that treasury debt is a way to prevent inflation. But like all old orthodoxies the policies of the new paradigm destroy such flimsy theoretics and find much better and effective ways of resolving problems like implementing beneficial price and asset deflation with a 50% Discount/Rebate policy at retail sale. (Whew! Everytime I write that problem solving, total inversion of temporal universe reality via an application of complete conceptual opposition to the old/current paradigm it almost takes my breath away!)
===== quote =====
but not truly significant or operant way that current free market theory can claim that treasury debt is a way to prevent inflation.
===== /quote =====
What on earth does this word salad mean? What free market theory are you talking about? How do you come to the conclusion that something is not operant?
She didn't say there was no difference. She said one wasn't more inflationary than the other. Good to see you haven't changed and still think you know more than everyone else all while having basic problems of interpretation.
I wish you would reply to my comments. When people say that bonds are like money, they really mean that bonds are like money in some respects. I may be unusual, but that kind of thinking gets me wondering that if something is like money in some respects, but it is not money, then in what respects is it different from money. Surely you and Stephanie Kelton know the difference. Why pretend there is no answer to the question about what is the difference. The curious get suspicious when we detect a refusal to address all the aspects.. Some of us are able to think for ourselves and fill in the parts some MMT proponents refuse to admit.
This refusal on the part of some MMT proponents saddens me, because there are honest answers from MMT that could address these issues. Honest answers are more convincing to me than are evasions.
Contemplate the word relevance, the intention to communicate the OPERANT/MOST IMPORTANT aspects of whatever is under discussion, and avoid committing what is meant in the following wisdom verse: "Ye blind guides, which strain at a gnat, and swallow a camel."
In other words you would rather ignore my remarks rather than address them. I don't know why my remarks should be so scary that you are afraid to address them. My remarks were important enough that you had to disparage their relevance.
Not correct. I answered your concern about the nitpick regarding the spelling out of the definitions of money which I believe has already been explained as: money is money readily free to be spent while bonds are investments of money and so they are at least once removed from money in hand.
Money IS the correct subject to analyze, the current operant concept/paradigm of new money is Debt as in Burden to Repay ONLY, and the new paradigm is Direct and Reciprocal Monetary Gifting.
Please analyze on that because the applications of the new paradigm, specifically the 50% Discount/Rebate policy at retail sale which is the very temporal universe expression of the new paradigm, destroy/make irrelevant virtually all of the orthodoxies, complexities and deepest problems of the old paradigm.
One is more inflationary than the other. Selling bonds during WW II was really one part of controlling inflation.
Time savings accounts at fed is not the same as spending! Spending is what could "possibly" cause inflation, not savings. Today the fed pays interest on Bank reserves. As Stephanie pointed out, she is not advocating one way or the other, but if it gets us past all this "Federal Debt" nonsense that would be better than all this drama.
WW2 bonds was just one way of decreasing demand (spending) in a "supply constrained" environment, such as during WW2. In Keynes book "How to pay for the War," I don't recall the word "Bonds" being mentioned. The question Keynes struggling with the UK government on, was rather to make "savings" a requirement or voluntary. In Keynes calculation he did not believe that voluntary savings would remove enough demand to prevent inflation based on his calculations of Wartime consumable consumer production. The US congress also used Keynes basic guidelines after entering the WW2 but choose to use War Bonds and Freedom Bonds as one way of decreasing demand (spending) "During War" (supply constrained). UK used savings accounts. The US choose bonds, the US bonds sold during WW2 were specifically designed to be long term bonds (10 year) reaching maturity after the war. Today most G-bonds purchased are "short or medium term" (2 to 10 years) bonds. When you take money out of, you're diversified managed IRA you will be taking bonds out many before meeting their maturity and full yield. Interest paid on the bonds converted back to its more liquid form will depend on the interest rate being paid at the time of withdraw in the bond auction market.
Regardless of what type of interest paying "time savings accounts" at the fed (US treasury or reserve interest accounts) they of in themself do not change spending. As of 2008 interest rates are set by voting members of the fed (as pointed out in the letter). These two things "do not affect" banks' ability to make loans. I don't see how these two things will change public saving rate. On the other hand, changing interest rates may increasing or decrease spending.
Over the last 2 decades the inflation experienced in the US has come as a result of abusive market behavior (not demand exceeding supply). Due to supply disruptions from COVID for the first-time sense WW2 the US has seen inflation come as a result of demand out stripping supply. There are others factors like Ukraine war (oil prices), change in what people consume and increased abusive market behavior this has led to an increased inflation.
Now we see the old "quantity theory of money" pulled out from under the rock and the entire conversation revolves around "too much money" causing inflation....."the government printed too much money!" "Can't do this it will cause inflation," "can't do that it will cause inflation."
During my entire adult life (65) the US has suffered from lack of aggregate demand, resulting in high unemployment and underemployment!..... Hardly a "too much money chasing too few goods story." Just more of the same manufactured problems using a straw man argument where there is no problem.
Thanks, Stephanie Kelton for all your hard work fighting the good fight. Future generations will read about you like we do Keynes now.