Thanks for the link to her Substack blog. We should all celebrate her right to express her thoughts, but what a dangerous moron. This is one of many quotes that were scary
“If the government wants to boost spending on health care and education, it may need to remove some spending power from the rest of us to prevent its own more generous outlays from pushing up prices.”
Her theory defies any causal review of history, common sense, and current events.
Hi Old Guy! Can you explain why this statement from Kelton is wrong? I read her book and it seems interesting. She seems to argue from a view that access to real things is what limits the life that we can create. So if I understand her reasoning, if we want to build a hospital, for example, we need all the actual stuff the goes into a hospital and the people who can build and run a hospital. And if that stuff is used by someone else, then you will have some inflation problems.
One question is who provides the real stuff to build and run the hospital. Real stuff has been around since the beginning. It took somebody to figure out that it could be used for something, worked hard, took risk etc. to turn that useless real stuff into something that was valuable to humanity.
I like to think of this kind of discussion at a very micro level. Let's say we were a family sitting around the table talking about our wish lists and how much in total it would cost. It turns out that we have done this many times before, and Mom and Dad are working two jobs and are up to their eyeballs in debt. While one could feel constrained by not having access to real stuff, there is no money to pay for it. Do we ring up our neighbor and demand that they pay for our wish lists? Will they ring us up for theirs?
MMT is insane. I reiterate that it is great we can all discuss these issues, but there are no real world examples around the dining table or anywhere in history where it worked out.
A really great book on the topic is "Fiat Paper Money: The History and Evolution of our Currency". $5.99 at Amazon on Kindle. I read most of it, but after a few examples, you start to laugh. No matter who tried it, it always started out with high hopes, and then crashed and burned. Did not make any difference who tried it or where in time. Always the same outcome.
MMT "works" as long as your currency isn't convertible into another currency and no other currency is accepted within your borders. The Soviet Union and China maintained "stable" currencies along with grinding poverty for many years, until they needed foreign goods and it all fell apart.
MMT can work in an emergency, like a mobilization to fight total war, when surviving the war is the sole goal of the nation. The last US mobilization of that sort was WW II. It can work permanently in a totalitarian system when taxes can be set at whatever arbitrary level is required to maintain a non-inflationary return path, but the price in that system will be ever increasing corruption to titanic levels that eventually threaten regime survival. It can't work during normal times in a democratic republic. Politicians will always be able to get elected with promises of more free stuff and lower taxes, and then inflation runs away.
Not in MMT. Government spends whatever Congress appropriates, and taxes are the return path of money to the Treasury to limit money supply and prevent inflation.
Creating unlimited money is what kills the usefulness of velocity. It is GDP divided by money supply. If the denominator is infinity, the result will be zero unless the economy keeps pace. And that’s not happening.
MMT describes the way the system works today and every day since the gold standard was dropped. I don't know where to begin picking apart your article because you only offer up criticism of the person. You offer no better theory of how to manage the US fiscal flows. Its amazing that if the bi-partisan government wants $1trln for the defense/war/weapons no one bats an eyelid. The money just magically appears. Put the same system to updating infrastructure or social care and no one can agree on how to magic up the money. The fact that you reference Printing Money shows how ignorant you are about QE. Reserves stay within the system and do notvmake their way into the real world, so QE didn't cause inflation. That would be the supply shock and the over reliance of globalisation. If there was too much cash in the system and it was causing inflation you would destroy that cash by taxation. Taxation doesn't pay for the government spending by the way. The savings that were seen after the stimulus cheques went out has been taxed and destroyed back. But yet inflation is still running high, why? Because of high energy prices. Why is the US a net exporter? So maybe resist this bilge you wrote and come up with a decent way to reduce energy prices.
He doesn't even give an argument, he's just vaguely gesturing at inflation and assuming his readers readers already accept the implicit premise that it's caused by the quantity of money currently in circulation.
Dear QTR, What exactly do you dispute about MMT as a descriptive framework? Is it the description of Federal Reserve accounting, or the spending taxing sequence, or the government as the monopoly supplier of that which is necessary for taxes, or that government debt is nothing more than a balance in a Fed savings account? Your piece features screed and lacks analysis. Thank You
This blog post is so misinformed. Two questions: what is the limit of government spending? Can we actually run out of the money we create? If you think long and hard and your response is "inflation," then, congrats, you now understand MMT.
They say we can "never run out of money"...but what they're really talking about is never running out of purchasing power. And when you pursue MMT, you will find that your "money" will lose its purchasing power, until it no longer fulfills the triplicate roles of "money".
Also, another shout out to true free speech. We can lay out our beliefs and observations so that everyone can decide what is “truth” through learning from each other.
They lie because they are ignorant idealogues..read and listen to Michael Hudson..Rockefellors old econ guy and once the highest paid econ in the world..U of Chicago econ is religion not science..these folks are religionists
Any conclusion based on an infinite set of variables will never have the certainty of a scientific conclusion and therefore, can't be labeled as "incontrovertible and irrefutable natural laws...".
Economics is a philosophy wanting to be a science. Take the humans out of the equations and you may have a science, but leave them in with their infinite decisions and their fear and greed and you are now the meteorologist (also a philosopher) waiting for the next unpredictable storm.
The article was great. However, I am old enough to have suffered under the '70s and '80s inflation and high interest rates which sucked out my net business income. Could you include the actual rate of inflation based on the 1970 CPI index in addition to the watered-down current version?
I'm not sure numbers go that high. That's a joke, of course. Let me see if I can track down a way to un-fuck the CPI composition from the last 5 decades and get something in 1970's terms. Just re-adjusting for owners equivalent rent vs. housing prices puts us well over 10%.
Thanks for the link to her Substack blog. We should all celebrate her right to express her thoughts, but what a dangerous moron. This is one of many quotes that were scary
“If the government wants to boost spending on health care and education, it may need to remove some spending power from the rest of us to prevent its own more generous outlays from pushing up prices.”
Her theory defies any causal review of history, common sense, and current events.
“If it walks, talks, and acts like a communist cunt, it’s most likely a communist cunt”
- Woke1
Raven aint no smarty pants econ guy either...just an idealogue.. Invite Michael Hudson for a debate or Keen and get shredded
Hi Old Guy! Can you explain why this statement from Kelton is wrong? I read her book and it seems interesting. She seems to argue from a view that access to real things is what limits the life that we can create. So if I understand her reasoning, if we want to build a hospital, for example, we need all the actual stuff the goes into a hospital and the people who can build and run a hospital. And if that stuff is used by someone else, then you will have some inflation problems.
One question is who provides the real stuff to build and run the hospital. Real stuff has been around since the beginning. It took somebody to figure out that it could be used for something, worked hard, took risk etc. to turn that useless real stuff into something that was valuable to humanity.
I like to think of this kind of discussion at a very micro level. Let's say we were a family sitting around the table talking about our wish lists and how much in total it would cost. It turns out that we have done this many times before, and Mom and Dad are working two jobs and are up to their eyeballs in debt. While one could feel constrained by not having access to real stuff, there is no money to pay for it. Do we ring up our neighbor and demand that they pay for our wish lists? Will they ring us up for theirs?
MMT is insane. I reiterate that it is great we can all discuss these issues, but there are no real world examples around the dining table or anywhere in history where it worked out.
A really great book on the topic is "Fiat Paper Money: The History and Evolution of our Currency". $5.99 at Amazon on Kindle. I read most of it, but after a few examples, you start to laugh. No matter who tried it, it always started out with high hopes, and then crashed and burned. Did not make any difference who tried it or where in time. Always the same outcome.
MMT "works" as long as your currency isn't convertible into another currency and no other currency is accepted within your borders. The Soviet Union and China maintained "stable" currencies along with grinding poverty for many years, until they needed foreign goods and it all fell apart.
The DDR maintained stable bread prices and apartment rents until it didn't exist.
How about updating the Misery Index, I believe Carter founded that one.
The Misery Index was created by economist Arthur Okun.
Great article! Thank You!
I give up.
MMT can work in an emergency, like a mobilization to fight total war, when surviving the war is the sole goal of the nation. The last US mobilization of that sort was WW II. It can work permanently in a totalitarian system when taxes can be set at whatever arbitrary level is required to maintain a non-inflationary return path, but the price in that system will be ever increasing corruption to titanic levels that eventually threaten regime survival. It can't work during normal times in a democratic republic. Politicians will always be able to get elected with promises of more free stuff and lower taxes, and then inflation runs away.
It was practiced during Trump for the banks...read superimperialism by hudson
Taxes are what government spends, not what they take in.
Taxes are the government's way of stopping velocity in MMT. Super whack, right?
Not in MMT. Government spends whatever Congress appropriates, and taxes are the return path of money to the Treasury to limit money supply and prevent inflation.
Creating unlimited money is what kills the usefulness of velocity. It is GDP divided by money supply. If the denominator is infinity, the result will be zero unless the economy keeps pace. And that’s not happening.
MMT describes the way the system works today and every day since the gold standard was dropped. I don't know where to begin picking apart your article because you only offer up criticism of the person. You offer no better theory of how to manage the US fiscal flows. Its amazing that if the bi-partisan government wants $1trln for the defense/war/weapons no one bats an eyelid. The money just magically appears. Put the same system to updating infrastructure or social care and no one can agree on how to magic up the money. The fact that you reference Printing Money shows how ignorant you are about QE. Reserves stay within the system and do notvmake their way into the real world, so QE didn't cause inflation. That would be the supply shock and the over reliance of globalisation. If there was too much cash in the system and it was causing inflation you would destroy that cash by taxation. Taxation doesn't pay for the government spending by the way. The savings that were seen after the stimulus cheques went out has been taxed and destroyed back. But yet inflation is still running high, why? Because of high energy prices. Why is the US a net exporter? So maybe resist this bilge you wrote and come up with a decent way to reduce energy prices.
He doesn't even give an argument, he's just vaguely gesturing at inflation and assuming his readers readers already accept the implicit premise that it's caused by the quantity of money currently in circulation.
(another try)
Dear QTR, What exactly do you dispute about MMT as a descriptive framework? Is it the description of Federal Reserve accounting, or the spending taxing sequence, or the government as the monopoly supplier of that which is necessary for taxes, or that government debt is nothing more than a balance in a Fed savings account? Your piece features screed and lacks analysis. Thank You
This blog post is so misinformed. Two questions: what is the limit of government spending? Can we actually run out of the money we create? If you think long and hard and your response is "inflation," then, congrats, you now understand MMT.
They say we can "never run out of money"...but what they're really talking about is never running out of purchasing power. And when you pursue MMT, you will find that your "money" will lose its purchasing power, until it no longer fulfills the triplicate roles of "money".
Kelton and her Marxist friend, Elizabeth Warren will drag us into a dark hell of debt and collapse.
Government money is all going to zero value. What you want are privacy cryptocurrencies like Pirate Chain, Monero and Dero.
Also, another shout out to true free speech. We can lay out our beliefs and observations so that everyone can decide what is “truth” through learning from each other.
Why are you lying about MMT? What's your objective for spreading this false impression?
They lie because they are ignorant idealogues..read and listen to Michael Hudson..Rockefellors old econ guy and once the highest paid econ in the world..U of Chicago econ is religion not science..these folks are religionists
Any conclusion based on an infinite set of variables will never have the certainty of a scientific conclusion and therefore, can't be labeled as "incontrovertible and irrefutable natural laws...".
Economics is a philosophy wanting to be a science. Take the humans out of the equations and you may have a science, but leave them in with their infinite decisions and their fear and greed and you are now the meteorologist (also a philosopher) waiting for the next unpredictable storm.
The article was great. However, I am old enough to have suffered under the '70s and '80s inflation and high interest rates which sucked out my net business income. Could you include the actual rate of inflation based on the 1970 CPI index in addition to the watered-down current version?
I'm not sure numbers go that high. That's a joke, of course. Let me see if I can track down a way to un-fuck the CPI composition from the last 5 decades and get something in 1970's terms. Just re-adjusting for owners equivalent rent vs. housing prices puts us well over 10%.
John Williams of Shadowstats does that
Thank you.
Thanks greatly, I'm sure others will appreciate it too. https://www.in2013dollars.com/inflation-rate-in-1970#formulas
https://www.bls.gov/cpi/additional-resources/historical-changes.htm
https://www.bls.gov/cpi/data.htm
shadowstats calculates it the same way as in 1980 to be about 16%, maybe a little higher.
Thanks for bringing this source up. I've seen this before. http://www.shadowstats.com/alternate_data/inflation-charts
From the shadowstats chart, inflation is now worse than in 1982 when I remember it. Scary!