An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Great title.I think its a perfect start toWhy yes they can. The U.S. Treasury could, if they so chose, to print 5, ------10,000 Trillion dollar notes$$$$$.Send them to the bankers/money "people", and say WE'RE EVEN. NOone has any debt in your evil casino. Its a new start and we don't need your lies anymore.We do have a United States Treasury that can do everything the "federal reserve" does now, and and and it can be done without endless usury .
The US founding fathers said that the US treasury can coin money. The term ' to coin money' was how people said in those days that the government has the right to print money. Nowadays the Conservatives have reinterpreted that to literally mean the government can only mint coins.Today, the government mints our cash supply which included notes and coins. But due to money becoming increasingly electronic, with cards being used instead of cash, the government money supply in circulation has dwindled to below 3%, so most of the money supply is now made by private banks. The conservatives have interpreted the term, ' to coin money' to meaning that the government can only mint coins, even though it has always minted notes as well. They have done this to to limit the amount of money that the government can make. Although, the Federal Reserve can print £trillions in electronic money to bail out bankers, the conservatives have limited the treasury to minted notes and coins only, or we rather, with their interpretation, to just coins, it would seem.So some monetary reformers have suggested that the government mint a $trillion coin, or even coins, and send them to the Federal Reserve which will then be obliged by law to exchange them for currency which the government can then use to rebuild America and bring it out of recession. Although I'm not an expert on MMT yet, I'm fascinated by it. From an economic point of view, it could finish off the Right, which is why they are so scared of it. The right will still have xenophobia and pathological lying on their, as well as psychopathology, but economically they could be finished, and with a bit of luck, that will be the end of them.
“That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.“Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.“But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 per cent, whereas the currency pays nobody but those who directly contribute to Muscle Shoals in some useful way.” … if the Government issues currency, it provides itself with enough money to increase the national wealth at Muscles Shoals without disturbing the business of the rest of the country. And in doing this it increases its income without adding a penny to its debt.“It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people. If the currency issued by the Government were no good, then the bonds issued would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious values of gold.“Look at it another way. If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency on Muscle Shoals, instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?” Thomas EdisonNote that even non-interest paying sovereign fiat is still technically a debt of the issuing government but otherwise Edison nails it.
"at the hands of men who control the fictitious values of gold"He's talking about a different system
Where is your compensation for the people who defer present consumption?
Why compensate people for deferring consumption. That is done on the mistaken view that saving provides the funds that are either used for investment directly (true), in which case one receives the dividend in stead of interest, and also the funds that are loaned for investment (false).The reward as interest for deferred consumption is justified on the basis that the funds contribute to the stock of loanable funds, when there is no such stock.So why should there be an interest reward for not consuming. That just deflects productive investment directly.Of course, people need to save for various legitimate reasons, but why should that receive a subsidy to do so. They don't need an incentive is the saving is actually necessary. Necessity is the motivation.
Tom, petit bourgeois desires as wannabe rentiers, that's why :DMost of political and economical issues come around this, who you skin off to extract a rent so you can live "the good life".
Right, Ignacio. Most social, political and economic problems in an acquisitive consumer society arise from the cultural emphasis on living "the good life" individually rather than seriously and sincerely inquiring what it means to live a a good life individually and together in a good society.When propaganda replaces inquiry, this is the outcome, where most people don't have a clue abut the difference between the important and the trivial, or how to distinguish them. Cultural influences not only inhibit people from making these crucial distinctions, so but also these influences actively prevent them from doing so. Doing so would profoundly alter the culture and those gaining from the status quo would be disrupted.The result is mass neurosis (psychopathology) with outbreaks of mass psychosis (sociopathology)
Where is your compensation for the people who defer present consumption? FrankoIn 100% private hands since positive interest on sovereign debt constitutes welfare proportional to wealth and not need.
Well then just cap it...
The risk free rate is a regulatory parameter... Its a lot more complicated than just a sophomoric "free money for rich people!"
Well then just cap it... FrankoNo, because the poor often have NOTHING they can spare for saving.Its a lot more complicated than just a sophomoric "free money for rich people!" FrankoIf welfare is needed then let's supply it generously but not welfare for the rich.Besides, the world has not fallen apart with even negative interest rates on sovereign debt.
Its a lot more complicated than just a sophomoric "free money for rich people!"Agree, but so far there is no debated of the actual issues as MMT illumines them. Not that I think that MMT economists have said the last word either.
Not the rate, the amount...
The amount is what I meant.
The cb necessarily sets the rate under the present system. The question is whether it should be set to zero. Or some other constant rate. This is really a question about monetary policy. Should unelected technocrats overwhelming linked to the financial sector be setting interest rates, especially if interest rates have the power to influence the entire economy as monetarism assumes.That raises the further question as to whether the fundamental assumption of monetarism about the effects of interest rates is correct. There are a lots of issues involved, many conflicting assumptions, different ideological conceptions about policy, etc.The VSPs have ruled out even mentioning this, let alone discussing it. They scoff at the idea that their assumptions and methods could be off base. Moreover, they assume technocracy is superior to democracy.
Not that I think that MMT economists have said the last word either. Tom HickeyThey hadn't even considered that a large amount of wealth inequality could be reversed by an equal, metered distribution* of new fiat to individual citizen accounts at the central bank in step with a metered elimination of government-provided deposit insurance.How's that for lame? That's what comes from ignoring ethics as a guide wrt to money/credit.*Plus forbidding the central bank from creating fiat except for the monetary sovereign - eg to finance the equal fiat distribution in exchange for "trillion dollar coins."
"a large amount of wealth inequality could be reversed"How can you say that somebody who DIDNT save deserves MORE than somebody who DID save?
How can you say that somebody who DIDNT save deserves MORE than somebody who DID save? FrankoWhere do you get that? An equal fiat distribution would ADD to savings equally, poor and rich alike, yet reduce the ratio of a rich person's savings to a poor person's savings.
Oh I thought you said savers didnt get anything.... have to think about that...
The cb necessarily sets the rate under the present system. TomEqual distributions of new fiat to individual citizen accounts at the cb can drive interest rates in fiat to zero if desired but in a fair manner that does not favor the rich or the banks. What's not to like?
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