Professor Randall Wray - Modern Monetary Theory in the Time of Inflation

This lecture was recorded on 14 October, 2022, at the University of Cambridge.
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[@bradchadley1261]

"I would reduce the role of finance in the economy." Music to my ears right there.

[@erickborling1302]

They call it the FIRE sector. Probably should be called the three-alarm-fire sector in late-stage failing capitalism.

[@josdesouza]

A true masterclass on real world economics.

[@zfvr]

Brilliant!

[@haveaseatplease]

Thank you for this video! Thank you also to professor Randall Wray for a number of refreshing ideas in critical areas (fundamentals) of economy and society at large!

[@masonkerr8359]

That is not a direct quote from Fed's Jeremy Rudd. He was only quoting as an epigram from the movie The Dain Curse.

[@Runkbullemumz]

Very much interesting😀

[@kaya051285]

Thank you a lot to consider

[@knobfieldfox]

The distinction MMT makes, and which traditional orthodox economics avoids, is to show how money is created or acquired by a government and moves around an economy through spending and taxation. Their thinking is more akin to double-entry accounting than to abstract supply and demand curves and other unreliable concepts.

[@WaxMeister]

Where might I find a copy of the Government vs non-government sector deficit/surplus graph found at 10:27 on this video?

[@mikeb2058]

You won't. It's totally fabricated like the rest of MMT

[@Rob-fx2dw]

It's false and so is the claim that there is a private sector surplus when government deficits spend is also false. It relies on a deception of ignoring the debt that government deficits and borrowing create and are used to fund excessive spending and which the private sector is forced to pay back with interest when the government treasury securities that were initially sold to pay for the deficit mature. They all mature in time and taxpayers have to pay them out.

[@WaxMeister]

Hi, explain to me in what currency does the Government sell their treasury securities so another country like China for example? If for example, the Government sells its Treasury Securities to China for Yuan, how is that money spent and in what currency is the Treasury Securities interest paid - Yuan or USD and where would the US get Yuan to pay the interest on Treasury Securities if, the US needs the Yuan to add to Government spending needs? I look forward to your reply - cheers.

[@Rob-fx2dw]

@@WaxMeister If the U.S. Treasury department sells Treasury securities it sells them with U.S. dollars on their face but the overseas entity such as Chinese uses Yuan to pay and that money is converted by bank to buy U.S. dollars as payment for the treasuries. When the U.S. treasuries mature the US Treasury department pays out the total amount including any interest in U.S. dollars and the Chinese holder then can convert that back to Yuan if they have need or any currency they desire creating a demand for Yuan or any currency they chose by selling the U.S. dollars at the bank rate of exchange for that chosen currency.

[@WaxMeister]

I'm sorry@@Rob-fx2dw, you could not be more off base. The fact is US Treasury Securities can ONLY be paid for with USD and there is no way there is a process where Yuans are converted to USD as you suggest. There is utterly no way anyone can buy a US, Canadian, UK, Australian, New Zealand or any other sovereign country with a sovereign fiat currency their Treasury Securities by using anything else but that country's currency. SO, you need to bone up on your information. You are misinformed.

[@detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊

[@Rob-fx2dw]

Good one Randall Wray!! - Fancy someone quoting Samuelson. The same guy who in the early 1960's said that the Soviet economy which was almost half of the size of the US would overtake the US in GDP by the 1980's but no later than 1997 because it was a planned economy. That did not happen but the opposite did and the US economy outpaced the Soviet one even more. Again he repeated it twice when he said it would by 2002 and again by 2012. Well those events did not happen and the opposite happened to make the US economy many times bigger than the soviet economy.

[@chopeda5822]

How big was the soviet economy in 2012?

[@Rob-fx2dw]

@@chopeda5822 Strictly it was mainly the older Russia including the former recently independent Georgia so was smaller than it could have been. Despite that it had collapsed in the late 1980's and what remained was essentially Russia but even given those facts and taking into consideration it's collapse the Russian economy was nowhere near what it had been or could have been previously because it's development was based on a centralist philosophy know as "government command". That "government command" idea was put across in the west by left leaning economists who taught it to university students. It turned out to be a failed theory.

[@chopeda5822]

@@Rob-fx2dw You can argue that the collapse was caused by their economic and political model, but you can't argue that post-collapse conditions were a continuation of that model. It's not that their country was a little smaller than It should have been, their entire society fell apart essentially overnight. their national wealth was looted, pretty much all services were gone, and everything was in complete chaos. It was not a continuation of the soviet model.

[@johnb4639]

The sound is way way too low. Need every control on near max to hear it!!!

[@economicdevelopmentplannin8715]

Volume is fine bud

[@user-ks1hp2pb5g]

@@economicdevelopmentplannin8715 Not for him or me, BUD.

[@danguee1]

@@economicdevelopmentplannin8715 I've got all my dial on maximum and still need to sometimes replay to catch what he's saying. So he's right and you have no empathy.

[@dkgong]

If we continue on this course, the interest on the debt will exceed revenues. When we have to deal with the consequences of that, I wonder what MMT advocates will say.

[@cecipalacios1007]

It is always great to listen to MMT great minds! There should have a clarification that Social Security retirement benefits are linked to inflation and since these benefits are reviewed annually the amount will increase in 2023 to match de inflation rate. As such the increase is not because the government wants to give a raise to seniors, it is just doing what it must be done each year! It appears that AOC has forgotten her earlier lessons as she does not talk about MMT

[@richardhoner7842]

I collect SS and I did get get a cost-of-living increase. Unfortunately my Medicare payment (which I am forced to pay whether I need/want it or not) increased (to cover the price inflation caused by MMT thinking) such that my overall monthly payment decreased.

[@erickborling1302]

Ha ha! Antique argument. Social Sec payouts are determined by policy, not by actual accounts balance constraints.

[@jamescooley6771]

I am in the same position with respect to Social Security. If you are convinced that MMT is directly or indirectly responsible for the increased costs of medical care in the United States, which has almost completely ignored MMT fiscal policy recommendations, then I fear you have gotten little benefit from Dr Wray's presentation. Marshaling public resources to provide universal health care at costs, without profit, would go a long way toward stabilizing health care costs, and there is no necessity for the government to tax any citizen's earnings to fund either Social Security or Medicare. @@richardhoner7842

[@ChannelMath]

​@@richardhoner7842 What caused your overall monthly payment decrease was that the government chose to give you less food and medicine etc. It has nothing to do with MMT. And, If you have a COLA, then inflation isn't the problem, it's that your COLA isn't accurate. (Or maybe it is, on average, and you just happen to buy things whose prices went up more than average)

[@ChannelMath]

@@erickborling1302 I didn't read any argument

[@m.h.f3350]

Temporary price hikes are not inflation, ongoing price hikes followed and then pushed by ongoing wage increases , is inflation. Just price hikes without wages followed creates mass poverty without inflation, as we are here now.

[@MengerMania]

How can Wray start a lecture on "Money Theory" without first defining "money?" Wray's final comments about the dangers of private finance scare the hell out of me. He does not understand how private finance should work in order to make valid criticisms of the existing system. He wants to substitute nationalized (legalized) counterfeiting for Bank counterfeiting. He does not understand the problems caused by fractional reserve banking and monetary expansion (whatever the source.) His proposals would decimate the market if fully implemented. Scary stuff.

[@DiabeticDawg]

Energy costs have risen dramatically. This effects the cost of goods. This is not price gouging.

[@random_bit]

Energy prices surged due to price spikes in Oil/Petrol and that was caused by OPEC. That is price gouging at its finest. Now, you can also attribute the price spike to sanctions on Russian oil, but that's a separate matter.

[@cwhit0110]

If it was due to COGS then why was 22 one of the most profitable periods for oil companies in years? Profit is a function of revenue less COGS. If that is the case, then rising cost and rising price would have no impact on margin. Whereas if price increases greater than the increase to cost, margin increases.

[@barryweiss9977]

MV=PQ

[@mikealexander1935]

I find the explanation of inflation as a supply side issue problematic. Consider WW II. Over 1941-1945 *real* output grew at a 10.4%. The fastest previous rate of growth over four years was 6.2% over 1921-25 and 6.4% over 1897-1901. The rapid expansion of the economy demonstrates shows that the economy was capable of producing much more output that it normally does. And yet there was so much inflation that the government felt the need to invoke wage and price controls that clearly were effective since inflation exploded upwards as soon as they were taken off (inflation 5.4% over 1941-45 and 11.4% over 1945-47). The conventional explanation for inflation at that time was war spending. The government increased its demand for goods and services dramatically in order to obtain the wherewithal to fight the war. In doing so bottlenecks develop. In the absence of this strong government demand, the other periods of strong growth showed very modest inflation of 1.4% over 1921-25 and 0.6% over 1897-1901. Inflation during wartime is a common observation. It was from such observation that the idea that deficits and inflation were related first arose.

[@PressureOnJulian]

Well, I'd imagine the cost of acquiring certain resources during wartime was significantly higher....therefore inflation as a supply side issue. That must be a possibility.....

[@mutton_man]

Alot of that increased output is for ammunitions and war vehicles. Bullets are a once use item, can't use war vehicles for general public. The type of output would have a big significance on inflation.

[@jerryware1970]

Price controls, rationing and conscription. The true prices were much higher during the war and were reflected in black markets.

[@johnlawlor5305]

If you read and listen to the interviews with the major MMTers, they address your points and discuss how the WW2-era bond market controls and the wage and price controls were relaxed too quickly -- resulting in the inflation that could have been avoided otherwise.

[@freemarley639]

Inflation was well understood way before WW2.

[@SchrodingersCat8813]

Wow, the Yarmouth comments are very shocking. I've heard from MMTers the story Wray tells, how every politician privately says I get it makes sense "But I cant say that" for someone, and in Yarmouth's position, to openly say it, maybe the times are indeed changing. I know in the 10 years from when I first started learning MMT to now there's been quite a shift in acceptance in my personal experiences with people. And the change in gov policy, big deficit spending, putting $ in states and locales, all the talk of long run supply investment. We may not all be MMTers now, (least publicly) but does feel we're getting closer.

[@MOONSIP2]

Bear in mind that Yarmuth was about to retire, so the risks were negligible. Having said that, imo more office holders should step up and tell the truth. We need to pressure them to do so.

[@richardhoner7842]

Politicians love MMT because they love spending other people's earnings.

[@jamescooley6771]

Public finance is not other people's earnings. Taxes do not fund government spending. One of the basic teachings of MMT you seem to have missed.@@richardhoner7842

[@MattCRHughes]

The graph at 10:46 makes prima facie sense (if gov’t prints all $, only $ they have printed are in circulation), but when you consider private bank money creation, it starts to break down. At scale, those loans are creating notional currency into existence that marginally should accrue as interest when loans get paid off, right? If that’s actually happening, then this graph can’t be accurate.

[@Rob-fx2dw]

You are right about the graph not considering that most money in the economy is created by private banks. But your assumption that there is something different from the money the reserve bank creates is wrong. They are all fiat credit money no mater who creates it. Government with the assistance of the actual creator of money which is the Reserve bank and that amount is about create only a out 10 to 15% of all money in the economy. Government gets that money from the reserve bank by selling treasury securities (bonds and notes). All of that borrowed money (e.g )dollars has to be paid back when the bonds sold to get the money mature. Those bonds all mature in time and all of the money is paid back by government with tax dollars that it takes from the private sector. There is no other lot of dollars in circulation. It is all fiat credit money.

[@kulls13]

The graph is an aggregate. Every dollar loaned or "created" by a bank is offset by a liability in the economy. So it cancels out. Even with M2/M3 money supply taken into account the graph holds true.

[@Rob-fx2dw]

@@kulls13 I do not disagree that everything balances out eventually. The detail that is important in respect to the issue of deficits and government funding is that when government funds deficits by borrowing from the reserve bank the government does not pay for that deficit because the treasury securities that they sell to the reserve bank eventually mature and the payout on maturity means existing money from the private sector part of the economy is used via taxation to pay off those maturing securities. So effectively deficits are hidden taxation that is paid after the deficit is created be it funded by the reserve bank or by treasury sales to the private sector. It is not free money for the private sector and o not a saving for the private sector but is a debt liability.

[@PressureOnJulian]

@@Rob-fx2dw And the detail that is important, that you've ignored about MMT, is that the government does not have to fund spending by borrowing or taxation....that is the whole point........

[@Rob-fx2dw]

@@PressureOnJulian You don't understand that doing that contravenes the law. If the law did changed to allow it then it would and has led to the same fate of nations who did so out of ignorance of historical fact and abandonment of accounting principles. That is because every new unit of fiat currency created involves an equivalent amount of det to be created. Abandonment of the present correct accounting would result in a situation which occurred in places like Uganda in the 1970's where the president Idi Amin Dada ordered the reserve bank to create more money to pay for the shortfall in taxes and called the financial advisors who opposed him as "stupid " for not just doing so. The result was financial chaos of course and the reason for that is understood by all who have a good understanding of credit and finances. So how would a government finance budget deficits by not borrowing form someone?

[@herbwiseman9084]

Inflation is the imposition of liabilities on society by those with the power to set and/or raise prices. It requires an ever-increasing transfer of assets from members of society to those who impose the liabilities and set the prices. When central banks signal the private banks to raise interest rates additional liabilities are imposed on society and more assets are transferred to those setting the higher interest rates. Thus in addition to the factors fuelling inflation, the means of combatting it ALSO actually increase both inflation and inequality because you facilitate the transfer of wealth to those able to set higher prices and interest rates. Society then has to find a way to meet the two sets of additional liabilities which is easy for those receiving the assets but not for those on fixed incomes or lower wages. They have no trouble meeting the higher liabilities because they have our assets available. There is no rule or law that says prices must go up when supply is diminished and demand remains the same or even climbs. We used to call that profiteering.

[@tspark1071]

I think the word MMT is not appropriate. What is modern?

[@danguee1]

As soon as I see a talk starts with a slide saying 'MONEY Is a scary topic!' - with cartoon characters shaking with fear and an exclamation mark - I know it's not a good start.... So, more of - not technical explanation - but 'how do you feel about this?'. The way our modern generations get so wrapped in cotton wool bay-talked to with everything is alarming. We're doing them a huge disservice in denying them the opportunity to grow from skilling up, learning to have intellectual strength and be self-reliant.

[@ChannelMath]

you should have watched the rest

[@drunkrtard]

Hard to hear, so quiet.

[@elmerfudd7202]

Whats the point of keeping score if it represents nothing of value or import?

[@Rob-fx2dw]

The whole idea of government being a scorekeeper is just self deluded rubbish. No scorekeeper participates in a game . Games are for players in the game or on the field. They record the results and do not participate whereas government is a participator trying to alter what people can do by their spending and taking control of resources and altering what otherwise would have happened. Randall Wray either has never been to any game or played one or just didn't know what happened when he attended as a spectator. Or maybe he just believes what someone told him instead of actually thinking about what happens.

[@controldata972]

@elmer fudd Where do you get the idea that a national currency is of no value or import? If you have any 💸💰💲that you don't want, then please send them to me. I'll take them off yours hands for you. I find them useful as tax-credits. The government will accept them to extinguish tax liabilities, fees, fines etc. 🤑🤑🤑 Don't listen to Rob on here. He's an old curmudgeon who can't stand a discussion of viewpoints different from his own. The analogy to a game with scorekeeping is intended to show that money is a man-made construct dependent on man-made rules, just like a game. You shouldn't stretch the analogy too far.

[@Rob-fx2dw]

@@controldata972 It is very appropriate you say "Don't listen " because that indicates what you are :- namely someone who wants to control others who have expressed a different opinion than yours.. You are the one saying 'don't listen '! Why would that be ? - Because you also don't want others to question what you say. The idea that money is tax credit that puts value into it utterly stupid thinking. It failed in over 30 countries in the past 100 years where the so called "tax credit" became worthless through inflation despite taxes existing. Even their own governments rejected it. So much for that badly thought out MMT belief you have put forward. You have learned nothing from history so are just repeating a bad idea again. Nothing but wishful thinking on your part. No wonder you don't want anyone else to listen to what I have said - The facts ruin your theory.

[@controldata972]

@@Rob-fx2dw You are a vociferous commenter on MMT youtube videos, always disparaging and negative. In my opinion, you don't bring any light to the discussion. For example, Elmer Fudd here has asked an odd question: "Whats the point of keeping score if it represents nothing of value or import?" Instead of helping Elmer understand Wray's position on money and how value is determined, you have indulged his misunderstanding of the analogy and the whole lecture. I am trying to understand and evaluate the ideas here myself. I want everyone's understanding to improve. That's our best hope of getting rational and fair outcomes from our economy. So let's understand what Wray is saying about govt spending. kzbin.info/www/bejne/faO3YaB4ZZJ1lZY The Central Bank is the 'scorekeeper'. It administers the central 'scorecard', just a database, a robust spreadsheet for keeping a ledger of Central Bank Reserves. We should understand that there is no longer any link to Gold Reserves or any other commodity (still a persistent misconception, maybe the source of elmer's question). There is not even a direct link between govt spending and govt tax receipts. Spending can (in fact, logically must) occur before taxation. Wray explains that govt deficits are private sector financial assets. He then explains how reducing govt debt destroys net financial wealth, with the historical example of the Clinton era deficit reduction. Please watch and listen to Wray - he has studied this for his whole academic career. He has some great insights. I suspect that you haven't even listened to the lecture. You just scour youtube for MMT and start posting canards, points that have already been refuted a thousand times. It's time you moved on and learned something new.

[@Rob-fx2dw]

@@controldata972 based on your statement that (I am trying to understand and evaluate the ideas here myself. I want everyone's understanding to improve. That's our best hope of getting rational and fair outcomes from our economy." why would you just take for granted what Randall Wray says and not look into it rationally. Firstly just look at what the idea of being a scorekeeper is. Scorekeepers do not participate in a game or activity and merely record the past events. So the analogy he draws is just misleading and not descriptive or like what happens in reality. The central bank (reserve bank) is not a scorekeeper by any means but a player in the economy which alters the situation by their policy. It's policy changes to make real alterations to the already observed situation in order to affect change.. You say "You just scour youtube for MMT and start posting canards, points that have already been refuted a thousand times." Where and when has this happened ? Why can't you understand that the central banks is not a scorekeeper but an active participant? Don't you know the basics of what central banks do? . If not then you need to read what they do by accessing the sites and actually taking their explanations seriously and not what some academic who has never performed their activities is trying to tell you which conflicts with their explanation and does not fit with the historical facts.

[@crawkn]

What I have not until now heard anyone, including advocates of MMT, say is that resource constraints only need exist in the short term. Of course the short term matters in formulating policy, but short term policy must also meld with longer term policy. If access to sufficient supply of a resource is a limiting factor, then the short-term goal needs to be to mobilize the resources which are available, to increase supply of the constraining resource. Or perhaps to work around the constraint, where possible. Earthbound resources aren't going to run out, they will only become harder to access, and eventually we will import virtually unlimited resources from space. If ever human labor becomes a constraint, (which it's not now and never has been), machine labor can be substituted.

[@TheCommonS3Nse]

This talk made me realize something about the demand side argument. If inflation is a result of excess money in the system, is that an acknowledgement that inflation is effectively price gouging? If companies are raising their prices because people have more money and not because their input costs have gone up, that means they are artificially raising their prices above normal market value. They are effectively price fixing because they know they can get away with it. If you argue that scarcity is the reason the prices are going up, then you are admitting that it’s a supply side problem. You don’t have enough supply to keep up with demand, therefore the cost goes up.

[@Rob-fx2dw]

You forgot they are all in competition with each other and being price competitive which makes your statement wrong. They are not in a position to just raise prices like governments raise taxes and charges because they are monopolies. The other fact is rising prices also come from the businesses' suppliers if your idea is consistently applied. Why did you ignore this factor which negates your statement wrong when you say "not because their input costs have gone up" ?

[@TheCommonS3Nse]

@@Rob-fx2dw Yes, exactly. For inflation to be demand driven, firms would have to be raising their prices voluntarily, but they can't do that because of competition. The only time that the demand side argument for inflation makes sense is in cases of monopoly (or defacto monopoly), when firms can engage in price fixing. If the price increases are coming from suppliers, then that is supply-driven inflation, not demand-driven inflation. It makes sense to me that inflation is therefore mostly a supply problem and that there will be some demand-driven inflation is sectors that lack competition. The argument that all or even most of the inflation is demand driven falls apart because of what you pointed out, competition.

[@user-ks1hp2pb5g]

@@TheCommonS3Nse i agree with you but on Rob's assertion, it doesn't make sense. Perfect competition=price-takers, imperfect competition=price-makers & of course the degree of imperfection, type of market, elasticities or demand/supply etc... are all factors too in the pricing power of firms within a given market.

[@TheCommonS3Nse]

@@user-ks1hp2pb5g I'm not sure why you guys are pointing out all the different factors that can impact price. I completely agree with you on that, but it has nothing to do with the argument I am making. I am arguing against Milton Friedman's assertion that inflation is everywhere and always a monetary (aka demand) phenomenon. For inflation to be mainly demand-driven, you need to assume a complete lack of competition. As you guys have rightly pointed out, that is a stupid assumption to make. Therefore, the demand argument doesn't make sense. You can point out 1000 other causes of inflation and it won't change that fact. All it does is reaffirm that there are many other factors which cause inflation besides the amount of money available in the market. Basically, I am making an argument saying answer is not "X and only X." Then you guys are saying "You're ignoring A, B, C, D, etc." I'm not ignoring them. I am saying that the answer includes all of them and not just X.

[@user-ks1hp2pb5g]

@@TheCommonS3Nse Fair enough. Yes, Friedman's assertion ignores endo money theory too,

[@thomasd2444]

01:09 -

[@bryanbell9103]

I don't understand, how is providing a guaranteed job at assuming prevailing wage going to help inflation? That puts the private sector in competition for those jobs and all wages will have to be increased. Labor is the one commodity that all businesses have in common. If we have to pay every food service, factory worker and manual laborer $35 an hour that's going to cause massive inflation!! That's what happened in the last 2years I work construction in real estate. We couldn't get anyone to come to work because the government was paying them to stay home (unemployment). End prices went up by 50% to consumers. Seniors couldn't afford to get their roofs fixed and there plumbing fixed so they just live in a ever more deteriorating house. Sounds like he thinks the labor shortage is engineers and crane operators but what we need is factory workers and laborers. Can some one explain??

[@Rob-fx2dw]

Of course you are right. But being right doesn't mean anything to these MMT economists who are pushing a failed theory. They can't even answer questions about that deliver the facts because it will show their theory is false.

[@Charles-pf7zy]

Slightly unrelated but a lot of rich bastards nowadays are saying the fed needs to help raise the unemployment rate to ease inflation, like you said when the supply of labor is low the cost goes up. So they want us to willingly throw out 2-3 or whatever % of workers onto the street with monetary manipulation, so that our prices can be lower as the poor get a pay cut. Isn’t it funny how it’s always the rich that advocate for human sacrifice? Everyone that’s willing to work deserves to have a job, and not be coerced into taking dirt pay because the Fed decided to artificially induce unemployment. Let people have jobs. Whatever inflation happens we can just take from the wealthy elite. They’ve been promoting human sacrifice policies for decades and getting rich off of it. They can afford to take a massive pay cut. In fact, they *owe* it to us. Also, spending money on necessary industries like food production will lead to food prices dropping because of increased supply. The only inflation that will come from the funding of necessary industries is the inflation of luxury goods that do not get a boost in production from the people. Meaning the rich will have to pay twice as much for their new yacht. We can push inflation out of the necessary goods market and into the luxury goods market. And the rich will pay. Fuck em

[@Rob-fx2dw]

@@Charles-pf7zy It appears you have very strange understanding of the situation which is contributing to your situation. Firstly who are these "rich bastards". Most likely those who profited from government interventions that contributed to your anxiety. Secondly why would you think that government politicians whom those such as Randall Wray promise so to improve the situation would actually turn out to be so when their policies will result in just more inequality of income than presently because it is easy to see the result of actions they support did previously.

[@Charles-pf7zy]

@@Rob-fx2dw How convenient it is that the best policy the Rich think will help the economy is to fire more workers, which just happens to come with the benefit of saving their own money from decreased wages, while keeping their record breaking profits for themselves. How convenient. If you wanna be a good boy by not rocking the boat and believing that narrative they spun up, that’s your perogative.

[@Charles-pf7zy]

@@Rob-fx2dw “Billionaire David Rubenstein says inflation won’t fall significantly until the unemployment rate is almost double what it is now” -Fortune Magazine That’s what I’m referring to. And he’s not the only billionaire calling for a rise in the unemployment rate. You gonna eat it up?

[@jones1351]

At about 1:05:00 I've been thinking for years that we treat Capitalism/The Market like we used to the Earth. Once we thought our planet was the center of the Universe, and everything orbited us. It was a complicated, messy and wrong model. But it held for centuries. Once we put the Earth in its proper place - 3rd rock from... Things started making a lot more sense. I believe the same is true for the 'Free Market'. There may be a place for that market in a functional/functioning society, but that place is definitely not the center of the Universe - which is, unfortunately, how we currently operate,

[@rightwingsafetysquad9872]

True, I think what you say describes a necessary set of steps. But if we zoom out further, beyond the solar system, the Sun stops being the center. And if you zoom out beyond the galaxy there is no apparent center. At that point you just define the center wherever it makes the math the simplest. It could be the Sun, or it could again be the Earth. Similarly, as you said, the free market should not be the center of our society. But I think once we've gone through more pervasive socialism, we should move back toward the free market being the default operating mode. There are certainly areas like healthcare that cannot be effectively handled by the free market and that should be majority controlled by the state. But there are other areas like food and housing that the government is very bad at providing, but still require state intervention to make sure everyone can have access. And still further there is almost everything else that the state can have oversight and veto power over, but doesn't need to be directly involved. Like you said, it's about seeing the whole picture and deciding what's important and what the most effective way of achieving that end is rather than following any particular system dogmatically.

[@richardhoner7842]

DIsagree. Capitalism - free markets - make the best decisions about resource allocation in an economy without any government interference.

[@cwhit0110]

@@richardhoner7842 didn’t free markets in America lead to slavery? Was that the best decision? We can obviously understand why treating people as assets on a balance sheet is economically a better decision than a salary expense on the income statement. Or didnt free markets incentivize Purdue pharma to sell heroin to people in mass and lie to doctors about the addictive nature of their delayed time release products?

[@erickborling1302]

Ha ha another zombie argument previously laid to rest even before MMT. "Free market" never existed, and when it even got close (to existing) it ultimately results in monopoly. The US has laws guarding against it for that reason, no matter how crappy the implementation of that policy due to widespread ignorance about "the economy."

[@jamescooley6771]

An article of faith since at least Adam Smith, but one that should be constantly reexamined in the light of its effects on the earth's ecology and carrying capacity. @@richardhoner7842

[@kaya051285]

Unemployment is close to zero The headline Unemployment includes people who are very temporarily unemployed So in the US or UK when you see Unemployment is 4% what that should day is. Thise who have been unemployed from 1 day to 6 months is 4% If you look at the more reasonable measure which is employment percentage for those unemployed for 6+ months the figure is around 1% That is to say the MAJORITY of Unemployment are those moving between jobs so even if someone is unemployed for just 2 weeks they show up in that 4% unemployed It's like a bath tub 4% is the water level Every day some people lose their jobs that is the tap filling up the bath tub And every day some unemployed get jobs that is like the plug reducing the water level

[@kaya051285]

Having watched all this I dont think the idea that you just spend what you like is reasonable I would change the idea though to roughly 1: Governments should have debts as the counter is the private sector has credits which is good 2: This figure might be sustainable up to maybe 300% of GDP there is some upper limit but its a bit fuzzy 3: You can't go from 100% debt to 300% overnight it would take decades (least you want a collapse) so yeah maybe the government could run a 5% nominal deficit for 50 years in a growth environment of 2% taking debt from 100% of GDP to 250% However I don't think the above which is more reasonable turns people on as it says your normal deficit spending of 3% maybe you can up it to 5% as that additional 2% isn't really life changing in the way some people hope MMT means you could run 10% deficits

[@J0HN3]

Rising oil prices - Thanks Biden for that!

[@stavroskarageorgis4804]

The long and the short of it is way, way too much "income support" went to those who neither needed it to "survive" nor even to "repair" their balance sheets. Whatever we actually did to ease the supply-side issues and reduce "price gouging" we undermined by our moronic sanctions on RF for the SMO in Ukraine.

[@Rob-fx2dw]

MMT is so introverted that it fails to understand that the meaning of "default " is only in actual numbers of dollars repaid and not in the actual purchasing power of those dollars. Applying the MMT understanding would mean the Weimar Republic after WW1 never defaulted on repaying the war reparations and other debts when it defaulted in value of it's debts by massive printing of their currency to pay the debt. The reality is it defaulted in value whenever it could. I suppose Randall Wray would if true to his own understanding of default be happy with anyone paying his income in an equivalent amount of worthless dollars instead of dollars that have retained their value and actually can buy things instead of dollars taht hav become valueless.

[@cwhit0110]

MMT would argue the acceptance of the London Ultimatum led heavy speculative selling of the Mark, thus depreciating the currency. Also the German government purchased foreign currencies at higher prices adding to the downward spiral of the Mark’s valuation. As a result of these policies, the rising import prices, employee wages and private sector wages were the source of the hyperinflation. In accordance with MMT, the currency was a monopoly set by the government but the government was willing to accept lower and lower prices for the Mark through their imports and the purchase of foreign currency at lower and lower prices. Once that policy was changed the inflation stopped. If the United states started purchasing foreign currencies and increasingly unfavorable rates, I wonder how that would impact the dollar?

[@Rob-fx2dw]

@@cwhit0110 Of course it was that. The Weimar government had an initial policy of expanding the money supply to pay for things that backfired on their own people by reducing the purchasing power of their own currency and making their savings worthless. When the Rentenmark was introduced the inflation effectively stopped because it was based on the requirement to restrict expansion of the money supply to the price real goods and services. It is really as simple as that without the political spin put on it by MMT pushers. .

[@cwhit0110]

@@Rob-fx2dw If your representation of MMT is governments can spend without consequence, then idk if you’re fairly representing the concept. I wonder if your opposition is political rather than economic. MMT often argues that inflation is the key marker to determining the proper monetary or fiscal policies. It’s also kind of disingenuous to present printing more money was the only issue as if the reparations and need to rebuild a war torn country weren’t also important factors in the economic turmoil. I don’t think an MMT economist would have responded in the same fashion as Weimar. Especially considering they purposely increased inflation to try to relieve the cost of the reparations. Which would be contrary to the MMT doctrine. Maybe a better criticism of MMT would be regarding the sell off in the Japanese bond market this year. But idk I have to do more research on that.

[@Rob-fx2dw]

@@cwhit0110 Thank you for your reply. Prompted by your mention of the Japan bond sales market I will definitely look at the Japanese bond sales market sell off when I get time . Look at what they say. They say inflation is the limiting factor as you pointed out. Now look again at the distorted reasoning of what the the order of their priorities actually is. They say inflation can be controlled by taxing money back after it has created inflation (measured in prices) by their deficit spending. That would require all and more of the money they had over spent being taxed back which effectively means budget surplus to take out more money from the economy to remedy the inflation. They also say money from taxes is destroyed and not used for government spending and neither is money from bond sales so you have to look at where the money the government spends actually comes from. So where in their idea does money for government spening come from? They can't explain how if government had no tax money how the government would spend apart from getting money borrowed from the reserve bank which has seldom been the situation apart from a few percent (apart from WW2). These are historically recorded facts of previous government spending in the USA. Their idea contradicts the historical facts as shown in the historical tables of spending (deficits and surpluses) which are available online via the Whithouse historical budget papers table 1.1 Summary of receipts, outlays, supluses and deficits. - www.whitehouse.gov/omb/budget/historical-tables/ They also say taxes make the money valuable despite the historical fact that taxes did Nothing at all to put any value into the money of countries where inflation made the money worthless and even their own governments dumped their own currency. That includes Zimbabwe (trillion dollar notes) and the Weimar republic, Chile, Peru, Hungary and others. If anyone can't see the glaringly obvious fallacies in those conflicting ideas then they should never say anything about how the economy works until they go back to basics and learn how money is created today and the order of how all wealth is created in economies and always has been as well as basic accounting facts. .

[@Rob-fx2dw]

@@cwhit0110 The situation of the MMT economists is they do say the inflation was caused by other than monetary expansion. That is despite there was massive monetary expansion. They give a reasons for it that precludes monetary expansion despite the facts it was caused by government expanding the amount of money on a continuous basis preceding other problems. They don't take that into consideration in their claims of inflation always being something else that sometimes is not factually correct at all because it did not happen or was so insignificant it is of relatively little consequence compared to the actual level of money expansion.

[@m.h.f3350]

The sad situation is, that the gouvernment shouldn't go into debt, but private companies should through investing, but it has to because the private sector became a net savor. Private companies literally killed the market economy and forced the government to take the role of the investor

[@richardhoner7842]

"...forced the government"??? I hardly think so.

[@Rob-fx2dw]

@@richardhoner7842 Yeah. - Like the private sector forces the government to hand over more money for what is called called tax. Oh. - . I think I will put more tax on the government to pay for what I decide to spend next year and jail some politicians if they don't pay! Isn't that how it works ? Or have I got it the wrong way around?

[@Rob-fx2dw]

Yeah. - Like the private sector forces the government to hand over more money for what is called called tax. Oh. - . I think I will put more tax on the government to pay for what I decide to spend next year and jail some politicians if they don't pay! Isn't that how it works ? Or have I got it the wrong way around ? The reality is:- I don't think I have it the wrong way when I say MMT is actually just a fantasyland dreamworld on steroids that tries to redefine concepts like saying debts are people's assets on steroids . If government debt is private sector surplus on their diagram at 10:25 of this video then private debt is government surplus so they should be encouraging more of the private sector going into debt debt when they are Not. After all it is balance sheet and things flow each way in a balance sheet.

[@FelonyVideos]

These MMT guys always get lost in the weeds when they try to explain evidence that MMT is correct.

[@J0HN3]

Reagan and Thatcher were neoliberal? Supply side is the problem 100%? 😂

[@karlalbert4969]

The best way to get rid of the curse of currencies, including the dollar, disasters, collapses, monopoly ogress, crises and wars Scientific and technical development in general opens horizons that did not exist in areas that no one has addressed before, as it develops work and elevates it My humble opinion is that the economic system and the mechanisms of its employment and directing this development and the speed of its response to it is the key I want to repeat my presentation under my main name in the civilized dialogue website and its basis The best benefit we can get through artificial intelligence to calculate the value through one measurement knowledge of scientists for the value just like the units of measurement in the ISO system such as meters, joules, lots, pascals, volts, amperes and bits..... And blockchain technology to manage its circulation and get rid of the concept of currency To get rid of the curse of coins

[@karlalbert4969]

The idea of expressing value without currency was actually proposed by Marx and Robert Owen Marx's idea was theoretical and mathematical, but Owen's idea was more practical with what he called units of measurement of work, but they faced the practical difficulty in calculating it. I searched a lot about those who studied value, and I came up with the idea of measuring the value with one measurement that economists know, and we use artificial intelligence to calculate it and manage it with the Blockchain technology that the designers of the electronic currency used. This scientific aspect we owe to its creators, but of course we do not want it for the digital currency because it is a new monopoly tool that we want to exchange value I didn't know that Marx and Owen had already proposed the idea until after reading this by chance This encourages us to lay a foundation from which to proceed, starting with the idea of this single standard of work value for Owen and Marx, and then developing or modifying it according to the results of the studies.

[@karlalbert4969]

And the value in one way is a measurement calculated by the method of neural networks and floating logic in artificial intelligence through dynamic weighting and adjustment processes that can enter social values, the amount of need, the degree of benefit, creativity, energy and effort ........ Yes, we can calculate the value thanks to this technological development, unlike what was in the era of Marx and Owen. We can put it as a clearly defined tool. We call it, for example, WorkCoin or ValeoCoin..... and put a definition for it (a value that needed such and such amount of work and energy with such a degree of creativity, with such a degree of benefit, with such a degree of need, with such a degree Social concern and demand for such-and-such with the possibility of such-and-such destruction or such-and-such damages...............

[@Glrk10]

Word salad of the week

[@1Skeptik1]

MMT = something for nothing? I try to be open minded and ask if the average American is better off today than they were 40 years ago? I think not. I would argue the average American is better "educated" and working longer and harder for less. Consider: Over 60% of Americans are living hand to mouth. Look around your house or office, can you find anything made in America? Personal debt (credit card) is climbing well above the inflation rate, bankruptcy are increasing, college loan default is in the 40% area, pensions are underfunded and disappearing and our dollar is far from durable. MMT = something for nothing? I am less than convinced. It takes about $12 to purchase the same goods or services as $1 bought 50 years ago. (I'm. 72 and lived it.) I would further argue the Covid "crisis" was a manufactured event and a failed printing experiment. I will be delighted to have any of this wrong. What am I missing? Anyone?

[@calebf2373]

MMT doesn't argue that we get something from nothing, it redefines what that "something" should be measured by. MMT argues that a nation-state has a set amount of resources, and that a nation-state can create debt freely so long as 1.) The nation is currently producing less than it could be and 2.) The debt goes directly towards increasing the nation's ability to use those resources. Imagine a pretend nation of "Sheepland" where the only resources are sheep and the only way to utilize those resources is to hire shepards. If Sheepland has so many sheep running around that the shepherds are physically unable to herd them all, then Sheepland is producing far less than it could be. In that scenario, there are a bunch of Sheeplanders who have no jobs and a bunch of un-herded sheep are being completely wasted. MMT argues that Sheepland can (and should) go into debt in order to hire enough shepherds to herd all the sheep. MMT argues this is not only good, but a very smart financial decision because now Sheepland is herding all of its sheep and no resources are being left on the table. MMT actually doesn't want infinite government spending, it wants the government to spend enough to make sure that all of its resources are being utilized. MMT does not argue that a government can spend infinitely, it argues that a government can spend exactly as much as it needs to in order to make sure the nation is operating at its highest possible capacity. WW2 actually is an example of MMT working. During that period, the US government went into huge amounts of debt, but used that debt specifically to increase the US utilization of US resources, and that led to the incredible GDP growth that the period is known for. MMT shouldn't be thought of as "governments are infinite money printers" but rather "governments should make sure they are spending enough money to keep their country working at near full capacity". MMT actually agrees with you, and you agree with MMT more than you think. MMT also argues that if all of the sheep were herded but Sheepland continues to print money anyway, then we would actually see inflation and a reduction of living standard. It's not about infinite money, but about making sure no resources are wasted. The confusion about infinite money comes from MMT responding to arguments from politicians or the economists of two generations ago. Those people (and many modern politicians) like to fearmonger about the national debt, usually something along the lines of "if debt gets too high the economy collapses". The goalposts from this argument have been moved over the decades. First it was when we hit 75% of GDP we will collapse, which did not occur. Then it was 100%, which did not occur, then 125% etc. etc. The part about a government not being able to default on itself is a response to that specific argument. MMT doesn't say "the government can have infinite debt" it says "There is no arbitrary debt % at which the economy collapses so long as the debt is being put to good use". That's what MMT proponents mean when they say these things, which is admittedly very confusing for people because it's an argument made against the economists of the past rather than the people of today. Does that help at all?

[@Rob-fx2dw]

@@calebf2373MMT is garbage. It says the government can deficit spend creating more money then tax it back if it causes inflation. Why would anyone or any country spend too mush and then try to take it back when the historical evidence is if you spend more than you have it is debt which has to be paid back. Out of ignorance of the importance of marginal prices in the economy it says that it can use excessive spending to bring what it calls idle resources back into production but the problem with that is the idle capacity is already there for economic reasons which includes being too costly or being out of date or unable to produce goods that are in demand at a competitive price. You say in response to concerns of the size of government debt "The part about a government not being able to default on itself is a response to that specific argument.". and " MMT doesn't say "the government can have infinite debt" it says "There is no arbitrary debt % at which the economy collapses so long as the debt is being put to good use". That statement itself indicates you consider either there is no amount of government debt that is problem or that you somehow know what it is in relation to what you call "good use" . What is 'Good Use" and at what price is so called "good use" ? Why have you avoided explaining or considering what "good use is price at compared with other uses ? Or is it just a throw away line that anyone can use which appears the case so far.

[@Rob-fx2dw]

@@calebf2373 You have the story of debt in WW2 all wrong. The debt was paid for by the loss of living standards of milions of people in the U.S. during WW2 where many more people including millions of women were taken into the workforce working long hours to produce munitions and equipment for the war instead of goods that peole needed which were in shorter supply during the war. As an example the production of vehicles for consumers in that war was virtually ceased. Not only that but the deficit borrowing of WW2 all had to be paid back after the war by the U.S. taxpayers.

[@ivantsanov3650]

MMT 😅😂🤪 (Magic Money Tree)

[@richardhoner7842]

Exactly. It's all a bunch of BS.

[@arofhoof]

Saying that government debt is non-government surplus to justify exonomic policies is hilariously stupid😅😅😅

[@Rob-fx2dw]

Agreed. He puts up a sectoral balance chart graph that shows government debt (deficit spending) being a private sector surplus and doesn't even consider that balance situation must be just that so private sector debts would be government surplus because it is a balance situation. But then he completely ignores the balance and argues solely for government debt increases. Of course the whole sectoral balance and government debt being a benefit is garbage that relies on ignoring the reality that when government spends in deficit it means the private sector is obliged to pay off via taxation the maturing treasury securities which were used to fund that deficit spending. Government does Not pay off its own debt but taxpayers do.

[@JustROFLGaming]

"A country cant default because it can always print more to pay off its debt, there is no possibility of default." Well a country would quickly find out that, no one will lend you money if your going to massively increase the money supply and then pay them back with a devalued currency. So they would lend to you in a different currency, one you don't control and so cant just print more to pay them back. Its a terrible assumption to just assume people/countries will endlessly loan you money in a currency you control if you continuously print more to pay them back. It just one of the many terrible assumption which cause MMT to break down.

[@sandworm9528]

Why borrow from other countries?

[@Rob-fx2dw]

You are absolutely right. The reality is MMT is just a politically based idea to gain more power for the Federal government at the expense of everyone else. The is no end to the amount of misinformation, distortion of facts and gross misrepresentation of facts in their theory . An example is MMT saying that the private banks are agents of government because they are licensed. The reality is the term "agent" only applies to intermediaries who do not trade in the goods that are being created loaned or sold from one party to another. An example is real estate agent who is an intermediary merely facilitates the process of a buyer finding a seller without themselves being a buyer or seller. Legally and factually agents are just that whereas private banks actually create the fait money (credit) they lend and make profits or losses from it. There is no "agent" at all involved in their lending process because they do it themselves without any money from the reserve bank.

[@PressureOnJulian]

Your logic is flawed. A reason government bonds are attractive is precisely because they can never default - they guarantee a return on the investment. And those that purchase bonds are private entities rather than states in the main.

[@Rob-fx2dw]

@@PressureOnJulian Firstly - Government bonds nearly always default in value even over the shorter term but especially over the longer term. If you bought them ten years ago or more you would find they are worth less than they were then even with the interest. If they didn't lose that value then everyone who is serious investor would buy them in preference to other investments. Do you know of anyone who has become wealthy by purchasing government bonds? I would guess you don't because they do not exist.

[@PressureOnJulian]

@@Rob-fx2dw Yet they still buy them…. Also it is not a default - if I pay my mortgage every month I’m not defaulting just because that money is worth less due to inflation….I’m servicing the debt as agreed.

[@TeleportlabsETH]

I've been giving this topic an open mind but this guy talking smack about crypto is just too much. I had to turn away purely out of principle. The guy is a clear representation of the idea that people are only smart in their own lanes.

[@clarestucki5151]

"Inflation" (erroneously defined as rising prices) is neither a "demand-side NOR a supply side problem", it is a monetary problem. The real definition of the word 'inflation" was always and still is, ""Raising the ratio of amount of the money in circulation to the amount of goods and services (GDP) in the marketplace, leading to higher prices"!!!.

[@dieterhoffmann6449]

Yes and no😂 Inflation can have more than one reason, as the Professor so brillantly explained. Scarcity rises prices

[@freemarley639]

Not always monetary, pretty much always though. As stated scarcity and also reduced consumer spending can create inflation.

[@curryattack8985]

@@dieterhoffmann6449No! Inflation is caused by an increase in the money supply. Scarcity of any item does NOT cause inflation, it merely causes the price of that item to rise until scarcity is eased or demand falls.

[@timc1604]

You seemed to be referring to the quantity theory of money, not inflation, although they are of course related.

[@clarestucki5151]

@@dieterhoffmann6449 'Inflation' can have more than one reason only if you mis-define it to make it synonymous with 'rising prices'. We should eliminate the word 'inflation' from the language and replace it with 'price inflation' and 'monetary inflation'.

[@kimfreeborn]

"We don't need capitalism involved in providing Health Care, Housing, Food supply, Child Care these don't have to be for-profit activities we can provide these as public goods The public sector doesn't have to grow. The public sector has to meet people's needs but it doesn't have to grow year after year."

[@stevefitt9538]

The sound is wat too low. Good bye.

[@Glrk10]

More govt spending helps people? We have the worst public schools in the developed world and terrible schools exist in well funded and poor districts alike. This theory, like Kanyes’s, assumes everyone is a good yankee spendthrift who craves education and lives responsibly. As a public defender with six years experience I can say the poor in this country are the exact opposite of the good yankee. More welfare=more single moms and more government dependency. People like this guy should spend a few months as a social worker or any job dealing with delinquent youth. If that doesn’t clear your head of politically correct fantasies nothing will. This man says cutting taxes for the rich does not grow the economy. Agreed. Who do you think buys govt. debt and collects the interest? How does paying billions in interest to sovereign wealth funds help America’s poor?

[@Rob-fx2dw]

The idea that a government debt is somehow different from private debt is just because it is created by government is just an illustration of denial that all debt of one entity is an asset of another entity. There is nothing new about this but what is peculiar about Randall Wray's attitude is his willingness to completely ignore firstly the fact that the debt created by the government has to be repaid when the treasury securities that were sold to fund the spending matures and must be paid back by the private sector taxes whereas the debt created by the private sector is paid back by the private sector. Anyone can draw a graph of money flows and leave out the critical factors to make it look like a what is real when it is not so. Randall Wray's graph of the sectoral balance completely ignores this fact so it it not representative of the whole situation which when revealed shows it is grossly inaccurate and totally misleading since the creation of government debt to fund deficits means the private sector is burdened with the cost of paying off the debt because government does not incur the burden of paying off their own debts. The government passes it on by collecting taxes to do so. Samuelson the economist who predicted that the economy of USSR would outgrow the US within a period of ten years because it was centrally planned. When it didn't he again predicted it would outgrow the US again and when that did not happen some 20 years later he predicted it would still outgrow the US but it didn't and fell into a recessive hole because it was centrally planned (really it was because he couldn't emotionally or mentally handle admitting he was no good at macro economics all those years and he had wasted his time by not learned and understood something more thoroughly). The score keeper analogy for what happens with government spending is just misleading and wrong for the reason that firstly the government spending does not happen after the effect of spending happens but the scoring in a game happened only after the playing of the game. Secondly no game has a score keeper participating in the play which is vast contrast to the government in the economy. Scorekeepers are just passive recorders of the game whereas the government participates in the economy with policy driven spending and taxing. The fact that he uses this analogy shows he has applied no understanding of the sequence of events in the economy or the fact that consequences of participants decisions and action like government or any other body are always relevant. I would not be surprised if Randall Wray has either never been to a baseball game or was blissfully ignorant of what happens with scoring in games because his observations are so poorly made or thought through. Another issue that Randall Wray ignores in his limited version of the wealth of the economy is shown by his statement about wealth being destroyed when the national debt is reduced by paying it off. He flies in the face of historical fact and ignores the fact that wealth does not come from excessive amounts of growth of the money in the economy. If it did Zimbabwe would have become the wealthiest country in the world per head of population instead of one of the poorest. Secondly he also ignores the fact that the private banks create most of the financial assets including money in the economy which amounts to approximately 90% of all money and those financial assets are not part of the national debt that was used to created by government to fund deficit spending. That private asset segment is not destroyed by reduction in the government's national debt but is enhanced in spending power by it. An historical illustration of this is the situation in Australia where from late in the mid 1990's until 2008 the national debt fell per capita and the income per capita rose by over 50%. Historical facts do not lie but some mislead others by ignoring them and Randall Wray's understanding of this aspect of finance and the macro economy is thus woefully inaccurate and grossly misleading.

[@controldata972]

I think you are unnecessarily wound up by the MMT perspective. What exactly is it that's causing you to grind your gears? On your 1st point, govt debt denominated in its own currency (no promise for convertibility to gold or other currency) *IS* different from private debt. There's no default risk, right? Interest-bearing govt liabilities (bond payments etc) are made in the same way as any other govt payments. The central bank marks up private bank reserve balances (and the private banks mark up the recipients bank balances). Cash notes are govt debt but there's no interest accrued, and no time limit for redemption. Your referral to taxation makes me suspect that your real problem with MMT is that you don't like govt spending / taxation. You think MMT promotes more govt spending and more taxation. Am I right?

[@Rob-fx2dw]

@@controldata972 You make the mistake of saying "There's no default risk, right?". This is clearly wrong. - go and see what has happened in countries where the value of the money has fallen dramatically and that was the default risk. The US dollar default risk is the value of the currency has fallen sometimes 15% per year or more in a year. That is a default in value and the value of an investment in currency that defaults on it's purchasing power is still a default. If you disagree then give me all of your investments and I will pay you back 15% less in purchasing power in every year which is half in less than 5 years in time. Who of any reputable experience in the Reserve bank actually confirms what you say ?

[@controldata972]

@@Rob-fx2dw You make the mistake of assuming that there is any guarantee of future purchasing power when you accept payment with any currency. Where do you get that idea from? The currency is at least backed by the authority of a sovereign government with a mandate for maintaining stability in the monetary system plus the authority and ability to levy tax obligations. MMT is a perspective for analysing the monetary system. It tells us how govt spending actually works and it has a policy, the Job Guarantee, that would stabilise over business cycles more effectively than the popular mechanism of relying on interest rate changes. You've been whining about MMT for years now, and yet your arguments fall flat.

[@Rob-fx2dw]

@@controldata972 You say "The currency is at least backed by the authority of a sovereign government with a mandate for maintaining stability in the monetary system plus the authority and ability to levy tax obligations". The mandate that for maintaining stability has little to do with the purchasing power. It is the ability to spend it and get goods or services that makes it worth something. The is no mandate enacted by government to make it stable and the evidence is the inflation rate policies that make it worthless next year than it is this year so government can continually borrow more from the central reserve bank to make it easier to pay off the previous debt they have created. They are running a Ponzi scheme. The job guarantee would mean government which is funded by the private sector taxes would compete in employment with the private sector on an even more unequal footing than than they do now which will lead to more distortion and lower productivity.

[@Rob-fx2dw]

@@controldata972 You say "MMT is a perspective for analyzing the monetary system. It tells us how govt spending actually works". Yet despite that your MMT theorists cannot even answer the simple questions of why they claim taxes make the currency more valuable and keep it accepted in spite of the fact it failed to do anything of putting value into the currency of countries where inflation left the money valueless. The MMT theorist can't explain why the official explanations of the people who create new money like the central banks differs from your MMT theorists. MMT theorists can't explain why they say the national debt does not have to be paid off and is not a burden for the future when the bonds that form it mature and must be paid off. MMT theorists can't explain why they continue to say these things despite their obvious failure to meet the facts. You have not been able to can't explain this either.

[@badxerge]

Misusage of MMT did cause inflation.

[@bexhill8777]

Rubbish, More Mathamajics.

[@bernardmccole3215]

Good stuff - I only wish you would keep your political (climate catastrophe) rhetoric out of this type of talk - It makes me fearful that people will throw away your good ideas because of your poor ones.

[@an000n]

There is an impending climate catastrophe to deny it is retarded

[@calebf2373]

I think this is the first I've ever seen of someone accept MMT but deny climate change, usually people see both as "left" and reject both. Would you be able to talk a little about why you trust modern economists but not modern scientists? Is there anything specific that led you to trust one but not the other?