Thursday, July 11, 2019

Ellen Brown - Democrats Can Have Their Progressive Policies and Pay for Them Too

I do like Ellen Brown, and even though you guys say she gets too much wrong, her heart's in the right place.

 Positive Money is a grass roots movement, and like Ellen Brown, they reach a lot of people.

MMT is more of a top down movement which can be very academic, although it's getting better now. Rather than fight each other, though, I think we should work together more.

Max Keiser wants to tie money to gold, to limit its creation to keep asset prices in check, but then businesses and government projects could become revenue restrained too unnecessarily dampening the economy.

The Democratic Party has clearly swung to the progressive left, with candidates in the first round of presidential debates coming up with one program after another to help the poor, the disadvantaged and the struggling middle class. Proposals range from a universal basic income to Medicare for all to a Green New Deal to student debt forgiveness and free college tuition. The problem, as Stuart Varney observed on “Fox Business,” is that no one has a viable way to pay for it all without raising taxes, a hard sell to voters. If robbing Peter to pay Paul is the only alternative, the proposals will die for lack of funding—just as Trump’s trillion-dollar infrastructure bill did. 
Fortunately, there is another alternative, one that no one seems to be talking about—at least no one on the presidential debate stage. In Japan, it is a hot topic; and in China, it is evidently taken for granted: The government can generate the money it needs simply by creating it on the books of its own banks. Leaders in China and Japan recognize that stimulating the economy is not a zero-sum game, in which funds are just shuffled from one pot to another. To grow the economy and increase the gross domestic product, demand (money) must go up along with supply. New money needs to be added to the system; and that is what China and Japan have been doing, very successfully.
Before the 2008-09 global banking crisis, China’s GDP increased by an average of 10% per year for 30 years. The money supply increased right along with it, created on the books of its state-owned banks. Japan under Prime Minister Shinzo Abe has been following suit, with massive economic stimulus funded by correspondingly massive purchases of the government’s debt by its central bank, using money simply created with computer keystrokes.
This has occurred without driving up prices, the dire result predicted by U.S. economists who subscribe to classical monetarist theory. In the 20 years from 1998 to 2018, China’s M2 money supply grew from just over 10 trillion yuan to 180 trillion yuan ($11.6 trillion), an 18-fold increase. Yet China closed 2018 with a consumer inflation rate that was under 2%. Price stability has been maintained because China’s GDP has grown at nearly the same fast clip, by a factor of 13 over 20 years.

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