TPS Posted September 4, 2017 Posted September 4, 2017 Thanks - I appreciate you taking the time to explain. I admit that my lack of detailed understanding gives me a simplistic view of the subject. What I have trouble with is an ongoing political argument where one side uses taxation as a wedge issue - a way to appear to be champions of the downtrodden by campaigning for increased taxes on wealthy individuals and corporations, and promoting the belief that both are little more than scoundrels who attained their wealth by cheating honest Americans, then seeing someone from that political point of view say that we don't even need to tax anyone to fund our government. The two notions are completely contradictory to me. While MMT economists tend to be liberal, don't equate the argument with liberal politicos (I realize you are talking about someone here). Most "liberal politicians" don't know much about MMT. Even though Sanders brought on a very prominent MMTer to his presidential campaign, I'm told he was still very skeptical.
TPS Posted September 4, 2017 Posted September 4, 2017 http://www.businessinsider.com/weekender-the-trouble-with-MMTmodern-monetary-theory-mmt-2011-1 Another strawman-filled piece. Two examples. They claim MMTers say deficits don't matter, then quote one of the guys mentioned (Roche) who says, they do. They claim MMTers ignore the real economy. If you read my stuff, I said that is precisely what matters, real resources. I'm sure you can find many pieces that criticize mmt, especially from Austrians like these guys...
Dr.Sack Posted September 4, 2017 Posted September 4, 2017 Another strawman-filled piece. Two examples. They claim MMTers say deficits don't matter, then quote one of the guys mentioned (Roche) who says, they do. They claim MMTers ignore the real economy. If you read my stuff, I said that is precisely what matters, real resources. I'm sure you can find many pieces that criticize mmt, especially from Austrians like these guys... Most Austrians are also strong advocates of currency backed by commodities like gold, which we aren't going back to.
Joe Miner Posted September 4, 2017 Posted September 4, 2017 Another strawman-filled piece. Two examples. They claim MMTers say deficits don't matter, then quote one of the guys mentioned (Roche) who says, they do. They claim MMTers ignore the real economy. If you read my stuff, I said that is precisely what matters, real resources. I'm sure you can find many pieces that criticize mmt, especially from Austrians like these guys... https://krugman.blogs.nytimes.com/2011/08/15/mmt-again/
Dr.Sack Posted September 5, 2017 Posted September 5, 2017 https://krugman.blogs.nytimes.com/2011/08/15/mmt-again/ Krugman, comes from the same school of economics as former Fed chair Greenspan, that couldn't see the 2008 GFC crisis coming. What economists try to do is shut down competing ideology and allow for a very lively debate within the confines of their orthodoxy. MMT, Austrians, etc seek to challenge the establishment neoliberal Chicago school of Econ.
TPS Posted September 5, 2017 Posted September 5, 2017 https://krugman.blogs.nytimes.com/2011/08/15/mmt-again/ Krugman is a trade theorist who doesn't understand the basics of money and banking. See the comments to krugman's article by Scott Fulwiler (an mmter) and jkh.
/dev/null Posted September 5, 2017 Posted September 5, 2017 https://krugman.blogs.nytimes.com/2011/08/15/mmt-again/ Krugman, comes from the same school of economics as former Fed chair Greenspan, that couldn't see the 2008 GFC crisis coming. What economists try to do is shut down competing ideology and allow for a very lively debate within the confines of their orthodoxy. MMT, Austrians, etc seek to challenge the establishment neoliberal Chicago school of Econ. Krugman is a trade theorist who doesn't understand the basics of money and banking. See the comments to krugman's article by Scott Fulwiler (an mmter) and jkh. I'm somewhat unsure what to make of that Krugman article as I usually find myself disagreeing with him but he does have that beardy professor look that makes people want to think he's smrt
Joe Miner Posted September 5, 2017 Posted September 5, 2017 Krugman is a trade theorist who doesn't understand the basics of money and banking. See the comments to krugman's article by Scott Fulwiler (an mmter) and jkh. So at this point you will only accept an mmt believer to disagree with mmt?
TPS Posted September 5, 2017 Posted September 5, 2017 So at this point you will only accept an mmt believer to disagree with mmt?i addressed some of the problems with those critiques, and I suggested that you read some of the comments to two of those articles in order to read others' critiques. If you think there is a valid criticism in those, point them out and I'd be happy to address it. That said, I think there are valid criticisms of some positions taken by some MMTers, but the overall explanation for government financing is correct. Personally, I see it as just a resurrection of Abba Lerner's theory of "functional finance."
TakeYouToTasker Posted September 5, 2017 Posted September 5, 2017 Most Austrians are also strong advocates of currency backed by commodities like gold, which we aren't going back to.Oh, we'll definitely be headed back to sound money at some point.
Joe Miner Posted September 5, 2017 Posted September 5, 2017 i addressed some of the problems with those critiques, and I suggested that you read some of the comments to two of those articles in order to read others' critiques. If you think there is a valid criticism in those, point them out and I'd be happy to address it. That said, I think there are valid criticisms of some positions taken by some MMTers, but the overall explanation for government financing is correct. Personally, I see it as just a resurrection of Abba Lerner's theory of "functional finance." From my simpleton understanding of the subject, there is a large difference between money and wealth that if doesn't seem MMT understands. The basic premise that the govt can't run out of money because it creates money is one thing. But that doesn't mean the govt is creating anything of value.
TH3 Posted September 5, 2017 Posted September 5, 2017 Time to merge this thread with the "Global Warming is a Hoax" thread....
TPS Posted September 5, 2017 Posted September 5, 2017 From my simpleton understanding of the subject, there is a large difference between money and wealth that if doesn't seem MMT understands. The basic premise that the govt can't run out of money because it creates money is one thing. But that doesn't mean the govt is creating anything of value. That is the Austrian perspective which is similar to saying "of course government can print money." Government can't create wealth, but it can stimulate wealth creation. The radical implication of MMT goes against their belief. Yes, if government spending = its taxes, there's no net wealth creation, it's simply a transfer of resources (as I said). HOwever, as long as there are unemployed resources, spending in excess of taxes (deficits) generate surpluses (wealth) for the private sector (ignoring the foreign sector for simplicity). The traditional belief is that government has to borrow first, then spend, which supports the belief that it's taking resources from the private sector. MMT shows that government spending first creates the income (and bank reserves) necessary to then "fund" the bonds it is required to sell to "finance" its deficit. It's a radical notion that irks those who hate government intervention, unless you're a defense contractor....
Joe Miner Posted September 5, 2017 Posted September 5, 2017 That is the Austrian perspective which is similar to saying "of course government can print money." Government can't create wealth, but it can stimulate wealth creation. The radical implication of MMT goes against their belief. Yes, if government spending = its taxes, there's no net wealth creation, it's simply a transfer of resources (as I said). HOwever, as long as there are unemployed resources, spending in excess of taxes (deficits) generate surpluses (wealth) for the private sector (ignoring the foreign sector for simplicity). The traditional belief is that government has to borrow first, then spend, which supports the belief that it's taking resources from the private sector. MMT shows that government spending first creates the income (and bank reserves) necessary to then "fund" the bonds it is required to sell to "finance" its deficit. It's a radical notion that irks those who hate government intervention, unless you're a defense contractor.... That's the part that makes it a completely academic exercise. Let's assume mmt has the theory nailed and is exactly right about everything it suggests contrary to other economic models and beliefs and historical data. Put the sole responsibility of wealth creation into the hands of the morons in Washington and see what happens.
TH3 Posted September 5, 2017 Posted September 5, 2017 That is the Austrian perspective which is similar to saying "of course government can print money." Government can't create wealth, but it can stimulate wealth creation. The radical implication of MMT goes against their belief. Yes, if government spending = its taxes, there's no net wealth creation, it's simply a transfer of resources (as I said). HOwever, as long as there are unemployed resources, spending in excess of taxes (deficits) generate surpluses (wealth) for the private sector (ignoring the foreign sector for simplicity). The traditional belief is that government has to borrow first, then spend, which supports the belief that it's taking resources from the private sector. MMT shows that government spending first creates the income (and bank reserves) necessary to then "fund" the bonds it is required to sell to "finance" its deficit. It's a radical notion that irks those who hate government intervention, unless you're a defense contractor.... Love how the antigovernment lemmings on this board will glom onto just about anything that rhymes with Feds Do It Wrong....please go back and find all the hate against quantitative easing andleaven it with the pro MMT posts..... criminy
row_33 Posted September 5, 2017 Posted September 5, 2017 Love how the antigovernment lemmings on this board will glom onto just about anything that rhymes with Feds Do It Wrong....please go back and find all the hate against quantitative easing andleaven it with the pro MMT posts..... criminy English or some other suitable language people on earth speak?
DC Tom Posted September 5, 2017 Posted September 5, 2017 English or some other suitable language people on earth speak? From baskin? Good luck with that...
row_33 Posted September 5, 2017 Posted September 5, 2017 it started out as a snide attack on Conservatives, and then the acid kicked in.
row_33 Posted September 5, 2017 Posted September 5, 2017 and i'm not complaining, usually I'm told that my scrawls aren't interpretatable for man nor beast.
GG Posted September 5, 2017 Posted September 5, 2017 That is the Austrian perspective which is similar to saying "of course government can print money." Government can't create wealth, but it can stimulate wealth creation. The radical implication of MMT goes against their belief. Yes, if government spending = its taxes, there's no net wealth creation, it's simply a transfer of resources (as I said). HOwever, as long as there are unemployed resources, spending in excess of taxes (deficits) generate surpluses (wealth) for the private sector (ignoring the foreign sector for simplicity). The traditional belief is that government has to borrow first, then spend, which supports the belief that it's taking resources from the private sector. MMT shows that government spending first creates the income (and bank reserves) necessary to then "fund" the bonds it is required to sell to "finance" its deficit. It's a radical notion that irks those who hate government intervention, unless you're a defense contractor.... Feels like we've been through this before. Spending in excess of taxes (deficits) only generates surpluses (wealth) for the private sector if there are productivity gains in the private sector or there's successful investment by the private sector to generate new products & services. If your argument is that governments sometimes provide a needed liquidity boost when there's a hiccup in usually well-functioning markets to stabilize a potential calamity, then we agree. But if your argument is that simply throwing money at a problem will stimulate growth out of the sky, then we definitely don't agree.
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