Unfortunately, while there is growing sympathy with the progressive goals themselves, the advocates of those goals still don’t have a convincing explanation or formula for how the federal government will pay for it all. The best they can come up with is that we’ll increase taxes on the super-wealthy and the big corporations—or that it’s simply unacceptable, conceptually, that the world’s richest democracy cannot manage to achieve these goals for a healthy society. So long as these are the progressive narratives—even if they manage to win the upcoming elections—the goals will never be achieved. To create genuine, wide-spread support for undertaking the big-ticket issues we face, it will be necessary to explain to America how its monetary system actually works....
Monday, August 12, 2019
A Modern Money Explanation — J. D. Alt
Subscribe to:
Post Comments (Atom)
3 comments:
“the Fed keystrokes the new dollars into the needful bank’s Reserve account in exchange for some collateral ponied up by the bank. The Fed now holds the bank’s collateral, and the bank holds the new dollars in its Reserve account—which enables the claims on those Reserves, generated by its expanded loan activity, to be fulfilled. Voila! New money that American enterprise has demonstrated it needs—by virtue of the willingness of people and businesses to borrow, and the willingness of banks to loan—has been created.”
This is incorrect.
MMT via their dialectic methodology: “loans create DEPOSITS”... loans don’t create Reserve Assets... loans are Assets themselves...
Bank Reserves are controlled by the Fed and now Treasury since Treasury no longer uses TTLs... they are Tier1 Assets banks can cite in their regulatory compliance reporting..
J. D. Alt is one of the better advocates for MMT’s theories, and here he makes another good effort to explain the inexplicable.
One of the difficulties with MMT is that is seems to believe that our current system is okay except for a few necessary modifications. MMT wants to maintain the current structure: the FED, money’s relationship to debt, Wall Street and the like. In effect. MMT thinks we are not very far away for the goal.
But MMT is wrong. Our systems of government and economics are failures and must be replaced. How can I say they are failures? I’m surprised you have to ask.
Any decent system of economics must give each citizen equal access to the rights, resources, opportunities, and protections that will give her a fair and honest chance to go as far in life as her talents and efforts can take her, thereby giving her a fair and honest chance to build long lives worth living for herself and her loved ones, including a secure, comfortable retirement.
Our current system of economics and our current management of our money supply do not even come close to fulfilling those requirements.
Furthermore, our system of government has constantly mistreated seven hated groups: the not-white, not-male, not-heterosexual, not-Christian, not-well-to-do, and the disabled. Nothing in MMY’s system solves this problem.
In addition, we seem to be creating an eighth hated group: schoolchildren. Any system of government that enables the mass murder by gunfire of its children while they sit in school, at their desks, studying for that hoped-for day when they will be able to assume control of their own lives and pursue their own happiness, is a failed system of government that has forever forfeited its right to govern and, according to the seven self-evident truths set out in the Declaration of Independence, must be replaced.
So, we need a new system of government as well as a new system of economics which will work together to provide to each citizen equal access to the rights, resources, opportunities, and protections that will give each citizen a fair and honest chance to go as far in life as her efforts and talents can take her, thereby giving her a fair and honest chance to build long lives worth living for herself and her loved ones, including a secure and comfortable retirement.
MMT’s system of economics fails to deliver on those requirements and any changes it may make to the current system of government will have little no effect on the fulfillment of these requirements.
J. D. Alt is one of the better advocates for MMT’s theories, and here he makes another good effort to explain the inexplicable.
One of the difficulties with MMT is that is seems to believe that our current system is okay except for a few necessary modifications. MMT wants to maintain the current structure: the FED, money’s relationship to debt, Wall Street and the like. In effect. MMT thinks we are not very far away for the goal.
But MMT is wrong. Our systems of government and economics are failures and must be replaced. How can I say they are failures? I’m surprised you have to ask.
Any decent system of economics must give each citizen equal access to the rights, resources, opportunities, and protections that will give her a fair and honest chance to go as far in life as her talents and efforts can take her, thereby giving her a fair and honest chance to build long lives worth living for herself and her loved ones, including a secure, comfortable retirement.
Our current system of economics and our current management of our money supply do not even come close to fulfilling those requirements.
Furthermore, our system of government has constantly mistreated seven hated groups: the not-white, not-male, not-heterosexual, not-Christian, not-well-to-do, and the disabled. Nothing in MMY’s system solves this problem.
In addition, we seem to be creating an eighth hated group: schoolchildren. Any system of government that enables the mass murder by gunfire of its children while they sit in school, at their desks, studying for that hoped-for day when they will be able to assume control of their own lives and pursue their own happiness, is a failed system of government that has forever forfeited its right to govern and, according to the seven self-evident truths set out in the Declaration of Independence, must be replaced.
So, we need a new system of government as well as a new system of economics which will work together to provide to each citizen equal access to the rights, resources, opportunities, and protections that will give each citizen a fair and honest chance to go as far in life as her efforts and talents can take her, thereby giving her a fair and honest chance to build long lives worth living for herself and her loved ones, including a secure and comfortable retirement.
MMT’s system of economics fails to deliver on those requirements and any changes it may make to the current system of government will have little no effect on the fulfillment of these requirements.
Post a Comment