As Jeff Deist and Bob Murphy have explained, MMT is not modern, not monetary and not a theory. It's more appropriately viewed as political propaganda playing on the compelling (to some) fantasy of creating something out of nothing.
Kelton's book, the Deficit Myth, is recommended reading in the sense that it will demystify the premises behind MMT and reveal its thorough malignance.
Hearing people like Kelton (and Francis Collins, Fauci, Yellen, et al) makes it very obvious the emperors have no clothes. We're currently led by incompetent scam artists. These people haven't grappled with the basic ideas of their own fields of study, much less broader societal impacts. Or if they did grapple with them, they lost. I can now fully appreciate the term "useful idiots."
Unfortunately, what is becoming most frightening is that they are hiding it less and less these days and we continue to call out the bullshit. We are arriving at the point where they are being unmasked....yet don't care anymore and push their agenda harder.
No worries, just inflate it away. Except for all those whose incomes don't increase at the same rate those relying on superannuation, social services, renters and the unemployed.
"The economics of this are not complex. Every economist knows there’s no such thing as a free lunch. Printing mass amounts of money cannot solve the problem of scarcity. This fundamental economic reality, that we have limited resources and limitless wants, seems lost on Kelton.
“The carpenter can’t run out of inches,” she tweeted in 2019. “The stadium can’t run out of points. The airline can’t run out of [frequent flier] miles. And the USA can’t run out of dollars.”
Kelton’s tweet reflects a fundamental misunderstanding of scarcity. "
Artificial Scarcity manufacturing is the establishments main income generator. So Global-Feudalist mouthpieces and useful idiots are unlikely to say it's a bad thing.
NPR is just the DNC's Pravda. Of course their angle is the deficit doesn't matter - if the powers that be started to think it did they'd be first to meet the headsman.
As usual, everyone ignores the elephant in the room: private banks create all dollars, and the only way to get new dollars into circulation is by borrowing from banks (proofs at bankLIES.org). We will be forever trapped in endless cycles of booms, busts, and debt-traps if we don't abolish the bank-controlled money scam. The power of money creation needs to be taken away from private banks and restored to the government OR the free market.
Dude. Mainstream economists in the 1980s said Reagan's deficits would destroy the country. Every deficit scare monger across American history has -- so far -- been wrong. Wrong. Wrong.
Eventually they will be right. I agree. But when? That's the question.
So far, nobody has a systematic, lucid way of thinking about that with any empirical success.
You could be right. That's a very plausible idea, I agree.
Time will tell. But an equally "interesting" question is: why is nobody buying it except the Fed? That's not so easy, and in my view gets in to complicated cultural analysis. It's hard to reduce that to a threshold number, i.e. after the debt gets to "x" nobody buys it.
Yep, the old Hemingway bankruptcy quote, "Gradually then suddenly".
I don't in any way dispute the size of the debt or the potential problem. But I'm a little burnt out from years of Doom&Gloom that never seems to come true. And I've believed it -- I'm a sucker for macro doom & gloom! I was gullible and credulous. Every doom & gloom I looked up and saw an asteroid. But it hasn't happened! Another one: We've had 10+ years of "Europe is going to implode any day now, Target 2 balances are off the charts. There'll be rebellions and revolutions among the PIGS. (Portugal, Italy, Spain, Greece_) The euro is toast." Yada yada. Never happened. Maybe some day, yes.
Everyone here knows US debt at end of WW2 was about where it is now as a % of GDP. What happened after? We know that too.
Will this time be different. Sure. Maybe. Maybe it will all explode next month. Or next year. Or in 10 years. Or the dollar will crater next year, or this year. I don't know. But one thing I've learned, I can imagine lots of things that never happen. Why they didn't happen? That gets complicated. And I rarely see anyone seriously grapple with that question.
Take a look at what happened to Yugoslavia and the Soviet Union. Those countries collapsed and fell apart under debt and inflation.
Why is no one buying treasuries? Various US administrations have weaponized the dollar, i.e., freezing a countries assets? That's one reason. With inflation, the money you lend today will get repaid with less purchasing power. That's another reason.
A few years ago, the US was the worlds biggest power without much in the way of competition and USD was king of the roost (and the reserve currency). Today, that's changing. There is up and coming competition for power and although the majority of world trade still transacts in USD, it's a smaller majority and falling.
I don't remember the name of the agreement but the US promised to defend Saudi Arabia if oil was paid for in USD and the USD's then invested in US Treasuries. Saudi's agreed. Recently, Biden told the Saudi's that 'we're going green'. Unless that was just for optics, that isn't a great sales pitch for US treasuries.
There're many more reasons.
This could still change for the better and doomsday could be avoided with responsible governance. We the People, both Canadians and Americans haven't seem to have wanted that. We wanted to be safe and taken care of by gov. Maybe that's changing. I see signs, how it will work out in the next elections remains to be seen for you later this year and for us next year.
All true. The "Petro dollar" is breaking down in front of our eyes. But responsible governance has been at the center of the American experience from Day 1. From Shays Rebellion through Civil War, with local insurrections peppering the decades, organized labor, unions and related conflicts. It's always been a street brawl.
USA got out of WW2 debt burden in part cause it was world's only surviving factory. But only in part. Expanding suburbia gave it a tailwind too, with all the economic activity that required.
It's hard to see now what is comparable to all that. The Fed was created with an act of congress. Maybe it gets so bad the Fed is restructured via act of congress, whereby it can simply extinguish the Treasury debt it now holds and get's empowered to buy a lot more.
Would that actually work? It might! As incredible as that would seem.
Economists always analyze money and debt as if they're Newtonian particles with mass and velocity. At the local level it is Newtonian, but at the macro level it's quantum (which is an inversion of physical reality). Money at macro level is all imagination, more analogous to quantum states and jumping probabilistic wave functions. And there we get into what used to be called Political Economy and cultural pyschology and group psychology.
In my view most of history's great inflations had antecedent conditions of breakdowns in cultural order. I think this stuff gets very complex and the moving parts which most economics sees are only surfaces or shadows of deeper and more nuanced underlying political/social realities. I think math is great and I love math -- but there's more than math. What did Einstein say, "Not everything that counts can be counted, and not everything that can be counted counts."
You're right: I remember that time – $100 billion deficit was going to end life as we knew it. But in hindsight, Reagan started with a debt/GDP - roughly 30% - that was the lowest in the last 80 years. For an empirical analysis, and a rough answer as to the "But when?" "This Time is Different: Eight Centuries of Financial Folly", is thorough, detailed, yet surprisingly readable. Are we richer today than then? Yes, but there's an argument that absent the pile of debt, we'd actually be even richer. See Hoisington Management's quarterly economic reviews - free on-line, some of which are readable.
NPR disgusts me. It absolutely is the case of extorting my money to purvey, preach, proselytize, and other spread putrid filth to which I reject at every level imaginable. It's very similar to the plan where, despite having no children, my money is stolen via property taxes and used to teach children to hate people like me and the values in which I believe (i.e., individual liberty, responsibility, and freedom).
They are the court or at least a significant layer or even stronghold of it, for the Court Intellectuals to be given the heir of legitimacy.
This article was well written at the start and then he/she moved into conspiracy theories and NPR! Gimme a break. They are showing an opposing point of view and for most people, who think, it is good to know all points of view to make informed decisions.
"It’s unclear why the media network chose to interview an economist with such discredited views to explain away the country’s mountain of debt."
Not really. NPR is the intellectual propaganda wing of the Dem party. And we must all know that the economy is just fine, there is no inflation, prices are not really high, and the debt never really comes due. Vote Blue... Morons!
Kelton doesn't know anything about the rest of the world. Countries with command economies, i.e., communist, thought they could print money to infinity.
Money printers eventually break and so do the countries that used them. Bad management is bad management at any level, household or state level.
The US doesn't feel it right now because it's an election year and you-know-who will keep things looking pretty until at least the end of the year. After that, especially if DJT wins, look out world.
As I understand it, government has three ways to pay debt. Go bankrupt and collapse, pay it off, and thru the use of inflation. Seems like our government has chosen the third course, but I'm pretty sure we are headed for the first. Of course, the second option is completely out of the question....
As Jeff Deist and Bob Murphy have explained, MMT is not modern, not monetary and not a theory. It's more appropriately viewed as political propaganda playing on the compelling (to some) fantasy of creating something out of nothing.
Kelton's book, the Deficit Myth, is recommended reading in the sense that it will demystify the premises behind MMT and reveal its thorough malignance.
Hearing people like Kelton (and Francis Collins, Fauci, Yellen, et al) makes it very obvious the emperors have no clothes. We're currently led by incompetent scam artists. These people haven't grappled with the basic ideas of their own fields of study, much less broader societal impacts. Or if they did grapple with them, they lost. I can now fully appreciate the term "useful idiots."
Unfortunately, what is becoming most frightening is that they are hiding it less and less these days and we continue to call out the bullshit. We are arriving at the point where they are being unmasked....yet don't care anymore and push their agenda harder.
USA to borrowers some day soon: https://www.youtube.com/watch?v=MYQCb3qrBpo
Haha! Flounder!
No worries, just inflate it away. Except for all those whose incomes don't increase at the same rate those relying on superannuation, social services, renters and the unemployed.
"Time is cruel master. So is compound interest." - Lawrence Lepard
https://inverttheinversion.substack.com/p/ch-112-money
"The economics of this are not complex. Every economist knows there’s no such thing as a free lunch. Printing mass amounts of money cannot solve the problem of scarcity. This fundamental economic reality, that we have limited resources and limitless wants, seems lost on Kelton.
“The carpenter can’t run out of inches,” she tweeted in 2019. “The stadium can’t run out of points. The airline can’t run out of [frequent flier] miles. And the USA can’t run out of dollars.”
Kelton’s tweet reflects a fundamental misunderstanding of scarcity. "
Artificial Scarcity manufacturing is the establishments main income generator. So Global-Feudalist mouthpieces and useful idiots are unlikely to say it's a bad thing.
NPR is just the DNC's Pravda. Of course their angle is the deficit doesn't matter - if the powers that be started to think it did they'd be first to meet the headsman.
As usual, everyone ignores the elephant in the room: private banks create all dollars, and the only way to get new dollars into circulation is by borrowing from banks (proofs at bankLIES.org). We will be forever trapped in endless cycles of booms, busts, and debt-traps if we don't abolish the bank-controlled money scam. The power of money creation needs to be taken away from private banks and restored to the government OR the free market.
Dude. Mainstream economists in the 1980s said Reagan's deficits would destroy the country. Every deficit scare monger across American history has -- so far -- been wrong. Wrong. Wrong.
Eventually they will be right. I agree. But when? That's the question.
So far, nobody has a systematic, lucid way of thinking about that with any empirical success.
Instead, it's all polemics.
Wake me up when you do.
It's the debt not the deficits, and the time when shit will blow up is when no one is buying treasuries except the Fed, and that time is now.
You could be right. That's a very plausible idea, I agree.
Time will tell. But an equally "interesting" question is: why is nobody buying it except the Fed? That's not so easy, and in my view gets in to complicated cultural analysis. It's hard to reduce that to a threshold number, i.e. after the debt gets to "x" nobody buys it.
It may increase until it reaches a panic-level. Then events happen quickly.
Yep, the old Hemingway bankruptcy quote, "Gradually then suddenly".
I don't in any way dispute the size of the debt or the potential problem. But I'm a little burnt out from years of Doom&Gloom that never seems to come true. And I've believed it -- I'm a sucker for macro doom & gloom! I was gullible and credulous. Every doom & gloom I looked up and saw an asteroid. But it hasn't happened! Another one: We've had 10+ years of "Europe is going to implode any day now, Target 2 balances are off the charts. There'll be rebellions and revolutions among the PIGS. (Portugal, Italy, Spain, Greece_) The euro is toast." Yada yada. Never happened. Maybe some day, yes.
Everyone here knows US debt at end of WW2 was about where it is now as a % of GDP. What happened after? We know that too.
Will this time be different. Sure. Maybe. Maybe it will all explode next month. Or next year. Or in 10 years. Or the dollar will crater next year, or this year. I don't know. But one thing I've learned, I can imagine lots of things that never happen. Why they didn't happen? That gets complicated. And I rarely see anyone seriously grapple with that question.
Take a look at what happened to Yugoslavia and the Soviet Union. Those countries collapsed and fell apart under debt and inflation.
Why is no one buying treasuries? Various US administrations have weaponized the dollar, i.e., freezing a countries assets? That's one reason. With inflation, the money you lend today will get repaid with less purchasing power. That's another reason.
A few years ago, the US was the worlds biggest power without much in the way of competition and USD was king of the roost (and the reserve currency). Today, that's changing. There is up and coming competition for power and although the majority of world trade still transacts in USD, it's a smaller majority and falling.
I don't remember the name of the agreement but the US promised to defend Saudi Arabia if oil was paid for in USD and the USD's then invested in US Treasuries. Saudi's agreed. Recently, Biden told the Saudi's that 'we're going green'. Unless that was just for optics, that isn't a great sales pitch for US treasuries.
There're many more reasons.
This could still change for the better and doomsday could be avoided with responsible governance. We the People, both Canadians and Americans haven't seem to have wanted that. We wanted to be safe and taken care of by gov. Maybe that's changing. I see signs, how it will work out in the next elections remains to be seen for you later this year and for us next year.
All true. The "Petro dollar" is breaking down in front of our eyes. But responsible governance has been at the center of the American experience from Day 1. From Shays Rebellion through Civil War, with local insurrections peppering the decades, organized labor, unions and related conflicts. It's always been a street brawl.
USA got out of WW2 debt burden in part cause it was world's only surviving factory. But only in part. Expanding suburbia gave it a tailwind too, with all the economic activity that required.
It's hard to see now what is comparable to all that. The Fed was created with an act of congress. Maybe it gets so bad the Fed is restructured via act of congress, whereby it can simply extinguish the Treasury debt it now holds and get's empowered to buy a lot more.
Would that actually work? It might! As incredible as that would seem.
Economists always analyze money and debt as if they're Newtonian particles with mass and velocity. At the local level it is Newtonian, but at the macro level it's quantum (which is an inversion of physical reality). Money at macro level is all imagination, more analogous to quantum states and jumping probabilistic wave functions. And there we get into what used to be called Political Economy and cultural pyschology and group psychology.
In my view most of history's great inflations had antecedent conditions of breakdowns in cultural order. I think this stuff gets very complex and the moving parts which most economics sees are only surfaces or shadows of deeper and more nuanced underlying political/social realities. I think math is great and I love math -- but there's more than math. What did Einstein say, "Not everything that counts can be counted, and not everything that can be counted counts."
You're right: I remember that time – $100 billion deficit was going to end life as we knew it. But in hindsight, Reagan started with a debt/GDP - roughly 30% - that was the lowest in the last 80 years. For an empirical analysis, and a rough answer as to the "But when?" "This Time is Different: Eight Centuries of Financial Folly", is thorough, detailed, yet surprisingly readable. Are we richer today than then? Yes, but there's an argument that absent the pile of debt, we'd actually be even richer. See Hoisington Management's quarterly economic reviews - free on-line, some of which are readable.
NPR disgusts me. It absolutely is the case of extorting my money to purvey, preach, proselytize, and other spread putrid filth to which I reject at every level imaginable. It's very similar to the plan where, despite having no children, my money is stolen via property taxes and used to teach children to hate people like me and the values in which I believe (i.e., individual liberty, responsibility, and freedom).
They are the court or at least a significant layer or even stronghold of it, for the Court Intellectuals to be given the heir of legitimacy.
This article was well written at the start and then he/she moved into conspiracy theories and NPR! Gimme a break. They are showing an opposing point of view and for most people, who think, it is good to know all points of view to make informed decisions.
Thanks for putting Murray Rothbard back on my radar. What an excellent summation of what I've suspected for decades.
"It’s unclear why the media network chose to interview an economist with such discredited views to explain away the country’s mountain of debt."
Not really. NPR is the intellectual propaganda wing of the Dem party. And we must all know that the economy is just fine, there is no inflation, prices are not really high, and the debt never really comes due. Vote Blue... Morons!
Kelton doesn't know anything about the rest of the world. Countries with command economies, i.e., communist, thought they could print money to infinity.
Money printers eventually break and so do the countries that used them. Bad management is bad management at any level, household or state level.
The US doesn't feel it right now because it's an election year and you-know-who will keep things looking pretty until at least the end of the year. After that, especially if DJT wins, look out world.
As I understand it, government has three ways to pay debt. Go bankrupt and collapse, pay it off, and thru the use of inflation. Seems like our government has chosen the third course, but I'm pretty sure we are headed for the first. Of course, the second option is completely out of the question....