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.
The $94 trillion doesn't represent what the government paid back. It represents all the debit or credit transactions to the government account for any purpose.
Elwood: redemption = clearing a debt. It's a simple definition.
PUBLIC DEBT REDEMPTIONS , Daily Treasury Statement ,Table III-B, column 3, line 11, through Oct.24, 2016 equals an amount rounded to $6,119,108,000,000.00 . So, just 24 days into fiscal 2017 consolidated govt. has paid off over 6 TRILLION in debt. Bet any 12 year old comprehend this.
I would strongly suggest learning to read a spreadsheet or maybe you should just stick to the political bs you spout on your ridiculously half-assed blog. DUH. -Delvecchio
$94 trillion in wortless fiat money. Hyperzyperdooper inflation will cripple the galaxy. I don't know when it's going to happen, but it's going to happen. SOME TIME!!!
Guuuuuuuundlaaaaach! Sorry, but I couldn't help myself!
Hi, Mike. I read your article and watched your video, and I can't figure out if you are intentionally misrepresenting your own data, or if you truly don't understand what you're quoting. Your own exhibit demonstrates the fallacy in your argument. For FY 2016, which you cite, the government redeemed $94T, but it also sold $95T in securities. You only mention half the equation. Then you say, see, we paid out $95T and the economy didn't collapse, so it must not be a problem. In fact, we took in $1T more than we paid out and that's why things are still OK. But what would have happened if only 10% of those purchasers of securities didn't buy from us? We would have taken in $86T and paid out $94T, a net decrease of $8T. That's when bad things happen.
And, as to your suggestion that the government put money into the economy by spending more than it took in, maybe that's true but it's also irrelevant to the subject. Every security documented in III-A is first purchased by someone, someone like me. I have bought T-bills for years, with dollars that I earned, and then paid to the government in exchange for a promise to get back more later. That's an important point. I put in my money, and get back more later. It isn't just moving numbers on paper, it is actual money out of my hand and then back into my hand. It is a loan from me to the government, and I expect to get paid back!
@STeve D, maybe before you insult others, you should take your own advice. For anyone who cares, instead of spoon-feeding you the answer, I'll just say read the bottom line. You quote one number from the middle of the page. What does the very next line say? Here's a hint, we took in more than we paid out. You are just twisting numbers to try to make them say one thing when in fact they say the exact opposite. I bet a 12 year old would think they understand what you said, but maybe it takes an adult to see how you are being deceptive.
You write for REALMONEY and you have NO IDEA how $ + debt works. GO READ: "The Creature from Jeckyl Island" (GRIFFIN) to get educated. The govt will get to 30, then 40, then 50T in Debt and keep their "zero debt" activities going for some time but it is the BANKRUPT SSI Trust Fund that will tank the US - in 10 years. Regardless, your flippant attitude towards endless gov't spending is a clear warning signal that even the so-called experts have no clue nor care about the long-term consequences.
Hello Scott. I don't think you'll be able to fool anyone around here with the statement "but it is the BANKRUPT SSI Trust Fund that will tank the US - in 10 years", but for entertainment purposes, why don't you go ahead and try.
You didn't really "loan" the government anything; you instead exchanged one government liability (reserve balances) for another (treasury securities). Eventually you will exchange them back. The government creates both reserve balances and treasury securities and has an unlimited supply of both.
Before we go off into a series of rants, MMT presents an operational analysis of how the existing momentary system works. This is different from what is generally presumed, leading people that don't understand it to false conclusions. The basic mistake is thinking that the government that issue its own currency is on the same level operationally as those that use the currency. This is a grave mistake from which a mountain of mistakes flow. The currency issuer is the mirror image, so to speak, of currency users as the sole supplier of the currency that others must obtain since they don't issue it.
I recommend looking at Eric Tymoigne's series on money and banking at New Economics Perspectives.
Understanding this requires being knowledgeable in monetary operations and that required understanding income statements, balance sheets, and national accounts as they apply to government (Treasury and central bank) and the banking system that acts as the interface between government and non-bank users of the currency.
First...the "Government" HAS NO BANK. The "Federal Reserve Bank"...Is a PRIVATE institution...PRIVATE...Not GOVERNMENT...PRIVATE...That's the first problem with this confusing article. And second...it is a DEBT. It is a debt owed to the "Federal Bank"...remember...this is a PRIVATE institution...not a Government institution. Just because it uses the word "Federal" does not make it a Federal Government Entity. That one distinction alone makes this whole article a waste of space.
13 comments:
The $94 trillion doesn't represent what the government paid back. It represents all the debit or credit transactions to the government account for any purpose.
Elwood, Table 3-A, right side, total redemptions
Elwood: redemption = clearing a debt. It's a simple definition.
PUBLIC DEBT REDEMPTIONS , Daily Treasury Statement ,Table III-B, column 3, line 11, through Oct.24, 2016 equals an amount rounded to $6,119,108,000,000.00 . So, just 24 days into fiscal 2017 consolidated govt. has paid off over 6 TRILLION in debt. Bet any 12 year old comprehend this.
I would strongly suggest learning to read a spreadsheet or maybe you should just stick to the political bs you spout on your ridiculously half-assed blog. DUH. -Delvecchio
$94 trillion in wortless fiat money. Hyperzyperdooper inflation will cripple the galaxy. I don't know when it's going to happen, but it's going to happen. SOME TIME!!!
Guuuuuuuundlaaaaach! Sorry, but I couldn't help myself!
Hi, Mike. I read your article and watched your video, and I can't figure out if you are intentionally misrepresenting your own data, or if you truly don't understand what you're quoting. Your own exhibit demonstrates the fallacy in your argument. For FY 2016, which you cite, the government redeemed $94T, but it also sold $95T in securities. You only mention half the equation. Then you say, see, we paid out $95T and the economy didn't collapse, so it must not be a problem. In fact, we took in $1T more than we paid out and that's why things are still OK. But what would have happened if only 10% of those purchasers of securities didn't buy from us? We would have taken in $86T and paid out $94T, a net decrease of $8T. That's when bad things happen.
And, as to your suggestion that the government put money into the economy by spending more than it took in, maybe that's true but it's also irrelevant to the subject. Every security documented in III-A is first purchased by someone, someone like me. I have bought T-bills for years, with dollars that I earned, and then paid to the government in exchange for a promise to get back more later. That's an important point. I put in my money, and get back more later. It isn't just moving numbers on paper, it is actual money out of my hand and then back into my hand. It is a loan from me to the government, and I expect to get paid back!
@STeve D, maybe before you insult others, you should take your own advice. For anyone who cares, instead of spoon-feeding you the answer, I'll just say read the bottom line. You quote one number from the middle of the page. What does the very next line say? Here's a hint, we took in more than we paid out. You are just twisting numbers to try to make them say one thing when in fact they say the exact opposite. I bet a 12 year old would think they understand what you said, but maybe it takes an adult to see how you are being deceptive.
You write for REALMONEY and you have NO IDEA how $ + debt works. GO READ: "The Creature from Jeckyl Island" (GRIFFIN) to get educated. The govt will get to 30, then 40, then 50T in Debt and keep their "zero debt" activities going for some time but it is the BANKRUPT SSI Trust Fund that will tank the US - in 10 years. Regardless, your flippant attitude towards endless gov't spending is a clear warning signal that even the so-called experts have no clue nor care about the long-term consequences.
Hello Scott. I don't think you'll be able to fool anyone around here with the statement "but it is the BANKRUPT SSI Trust Fund that will tank the US - in 10 years", but for entertainment purposes, why don't you go ahead and try.
You didn't really "loan" the government anything; you instead exchanged one government liability (reserve balances) for another (treasury securities). Eventually you will exchange them back. The government creates both reserve balances and treasury securities and has an unlimited supply of both.
Before we go off into a series of rants, MMT presents an operational analysis of how the existing momentary system works. This is different from what is generally presumed, leading people that don't understand it to false conclusions. The basic mistake is thinking that the government that issue its own currency is on the same level operationally as those that use the currency. This is a grave mistake from which a mountain of mistakes flow. The currency issuer is the mirror image, so to speak, of currency users as the sole supplier of the currency that others must obtain since they don't issue it.
I recommend looking at Eric Tymoigne's series on money and banking at New Economics Perspectives.
http://neweconomicperspectives.org/money-banking
Understanding this requires being knowledgeable in monetary operations and that required understanding income statements, balance sheets, and national accounts as they apply to government (Treasury and central bank) and the banking system that acts as the interface between government and non-bank users of the currency.
As always, Tom explained things better than me. Thanks, Tom.
First...the "Government" HAS NO BANK. The "Federal Reserve Bank"...Is a PRIVATE institution...PRIVATE...Not GOVERNMENT...PRIVATE...That's the first problem with this confusing article. And second...it is a DEBT. It is a debt owed to the "Federal Bank"...remember...this is a PRIVATE institution...not a Government institution. Just because it uses the word "Federal" does not make it a Federal Government Entity. That one distinction alone makes this whole article a waste of space.
http://www.publiceye.org/conspire/flaherty/Federal_Reserve.html
https://www.federalreserve.gov/faqs/about_14986.htm
https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks
https://www.law.cornell.edu/uscode/text/12/chapter-3
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