Beijing: China needs to decisively ramp up fiscal spending so it can support an economy damaged by Western restrictions on trade, according to a Chinese scholar studying an unconventional school of economic thought.The Star
Jia Genliang – the co-author of the new book Modern Monetary Theory in China and a professor at the Renmin University of China in Beijing – said China should lift its headline deficit ratio to above 5% of gross domestic product on average for the next decade.…
Jia is one of the most prominent Chinese proponents of Modern Monetary Theory (MMT), whose principle is that countries which borrow in their own currencies don’t face a real debt limit because they can print money to pay for it. That theory has attracted attention in China over the past few years as authorities relied more on fiscal stimulus and infrastructure investment to help a slowing economy.
Chinese scholar calls on Beijing to raise deficit ratio to 5%
Jia Genliang , professor at the Renmin University of China in Beijing and co-author of the new book Modern Monetary Theory in China
9 comments:
Arbitrary deficit limits for a sovereign currency issuer. So stupid.
The new Argentina President Javier Milei is right up Matt's street.
https://en.m.wikipedia.org/wiki/Javier_Milei
Or as Matt would say he is way right of this guy lol.
What a mess he is going to make that no doubt the state will end up bailing him and ideas out.
It has ALL be tried before and as history shows time and time again it doesn't work.
“Jia is one of the most prominent Chinese proponents of Modern Monetary Theory (MMT), whose principle is that countries which borrow in their own currencies don’t face a real debt limit because they can print money to pay for it.”
If your nation has monetary sovereignty (like the USA and China do) then all politicians in your government know this, although most politicians pretend to not know it for political reasons.
For example, if politicians do not want to spend money on something, then politicians claim that the central government is “broke” or “in debt.” They ask, “How will you pay for it?”
Conversely, when politicians want to spend, they simply order the money created out of thin air -- e.g. endless billions for Ukraine and Israel, or $2.2 trillion for the CARES Act.
None of these politicians have to be taught MMT, whether in the USA or China. All are fully aware of reality. They may deny reality, since politicians are professional liars. But they all know the truth.
I thought that Argentina guy is libertarian?
“ But they all know the truth.”
It’s not a true or false issue,,, it’s about technical understanding…
There is no evidence that they understand it…
Ask that “China scholar “ dude what basis of Accounting that China uses even he wouldn’t be able to tell you…
"There is no evidence that they understand it…
The evidence is that whenever politicians want to spend endless billions (or even trillions) on something, they simply order various agencies to order variuous banks to credit various recipients' acounts.
Voila: new money is created out of thin air.
Every politician knows how this game works, but they pretend not to know it. For example, House Republicans sent an added $13.4 to Israel to sustain the Gaza bombardment, while pretending to "pay for it" by cutting the IRS operating budget.
This is silly smoke and mirrors, and all politiians know it.
$13.4 billion.
The God of War creates money out of thin air. It's the least he can do.
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