Monday, June 13, 2011

Progressives, be progressive!

Warren Mosler urges progressives to quit being deficit chickens and embrace MMT instead.

The few lonely progressives, who do understand all this and have stayed the course with the progressive agenda, are those who recognize what has come to be known as Modern Monetary Theory (MMT). It is these MMT progressives who realize that a currency like the U.S. dollar is a simple public monopoly, and that the following are facts of actual monetary operations:
  1. Federal taxes serve to regulate aggregate demand, not to raise revenue per se.
  2. Federal borrowing serves to regulate the term structure of interest rates, and not to fund expenditures.
In other words MMT teaches us there is no such thing as the U.S. Government running out of dollars, that the U.S. Government is not dependent on foreign borrowing to be able to spend, and that hyperinflation comes only from sustained over spending far beyond full employment and our capacity to produce".


James E. Miller said...

Quick question: How does the government know what is the appropriate amount of "aggregate demand" the economy needs at any given time?

I mean, how can taxation be used to get millions of people to act in accordance to reach a specific goal without having any individual deviate from the plan?

WillORNG said...

James E. Miller The Job Guarantee is the ultimate automatic stabiliser.

Tom Hickey said...

Macro is based on aggregates. These aggregates show up as national accounting identities relating sectors of the economy. If non-government saving rises (falls), then the government fiscal balance must fall (rise) by that amount to maintain the identity. The relationship between government and non-government is inverse.

Aggregate data is available through the various agencies public and private that report it. The Treasury and cb track this on their models of the national economy based on national accounts. See Godely & Lavoie, Monetary Economics for how these models work. Wynne Godley developed his macro theory while at the UK Treasury. Bill Mitchell gives a short summary here.

While it is not possible to know individual behavior in particular cases at the scale of an economy, it is possible to know the results of individual behavior in aggregate based on sectoral balances and to develop policy proposals based on functional finance from this.

Individuals operate within certain parameters in an economy and in a monetary economy, a determing factor is monetary. Notional demand (desire to spend) only becomes effective demand (ability to spend) when there is the wherewithal available — income, drawing down savings, selling assets, or increasing debt, for example. Aggregate supply (goods sold) is equal to aggregate demand (goods purchased) from these financial resources.

Government can influence effective demand in aggregate by injecting net financial assets through deficit expenditure and withdrawing NFA through taxes. These fiscal operations affect aggregate demand (total spending) through effective demand (availability of financial resources). While individuals will make different choices, choices in aggregate must conform to available financial resources.

Calgacus said...

These are different questions.

Two basic goals are full employment and price stability. For these goals, the appropriate amount of demand is that which is necessary to attain full employment. A Job Guarantee spends the least amount necessary to attain full employment, and is countercyclical and disinflationary.

Taxation is used to get millions of people to act in a certain way (filing and paying taxes) because the government they have elected is more powerful than any individual who wants to deviate from the plan by not paying his taxes. Taxation is what gives value to money. Money is and always has been basically a tax credit.

James E. Miller said...


"taxation is what gives money value"
I suppose you can rationalize this for the present day and age economy, but the fact is that money gained value initially through its use in exchange OUTSIDE GOVERNMENT. Your world view seems to revolve around the idea that the government should control the money supply and is therefore entitled to it. That's at least my conclusion of part of the MMT perspective. Just because 51% of the population votes for a government doesn't make it right. Would you thus conclude that if 51% of the populous voted for a majority of politicians who set out to kill off, let's say, all Latinos in the country, than that is morally right?

@everyone else
I get the whole using aggregates thing to try and influence the economy, what I don't quite get is how a job guarantee program is an efficient use of resources. After all, we could all be paid to dig ditches or whatever and reach full employment right? I mean how do bureaucrats best decide how to allocate tax funds efficiently when they aren't necessarily considering profit losses? Or is that irrelevant?

And what exactly constitutes as "full employment"? Everyone that wants to work is able to find it?

Tom Hickey said...

Money enters the economy in one of two ways. Either comes from either private borrowing (loans create deposits) or government expenditure. Final settlement of transactions is through either bank reserves or currency exchange. Both bank reserves and currency are government created. The only alternative to this a modern monetary economy is barter.

A JG is standing offer for employment at a set wage and benefits. There are many ways it can be administered. There is a considerable literature on the function and advantages of a JG. Unemployment is the most economically inefficient and costly negative factor in an economy.

Full employment results when everyone willing and able to work has a job.

James E. Miller said...

@Tom Hickey

You are correct in how money enters the economy today, but it didn't exist that way when the concept of money was first utilized. We agree on unemployment though but not on the efficiency. Say 1 million people were employed by the government to jump up and down, does that mean its efficient and wealth is being created?

Tom Hickey said...

Who said anything about people jumping up and down. Right now, with unemployment insurance we pay people for doing nothing, when it is known that someone that is employed at is more employable than someone who is not. The deterioration of human resources that is taking place at present is hugely costly, not only now but in the future, and it is unnecessary based on affordability. A government that issues its own currency can always afford to purchase idle resources in order to employ them. Not to do so is more costly that to do so.

The daily losses from unemployment

James E. Miller said...


You still aren't answering my initial question, how does the government determine what is an efficient use of resources to employ somebody to use with taxpayer money?

Everyone knows that long termed unemployed are bad, their work skills deteriorate. Just because a government can theoretically (MMT doesn't seem to consider the law of scarcity in overall resources) afford to employ people doesn't seem to mean that the subsequent employment actually utilizes resources effectively and creates wealth in the end. Private markets aren't always efficient, but efficiency is encouraged through the shear lack of profits and capital.

Tom Hickey said...

There are different MMT proposal out there, but Randy Wray suggests the government using contractors for the administration and management of the JG, with the checks of auditing and oversight — much like Medicare is presently administered. He would also farm it down to the state and local level. The Federal government would simply fund the program nationally, since it alone has this financial capacity.

Calgacus said...

James - glad to see you here. I read your blog now and then and I have some hope we can convince you.

the fact is that money gained value initially through its use in exchange OUTSIDE GOVERNMENT This is historically false. Money is and always was a creature of the state. MMT/Creditary/Post-Keynesian economists write, read and think a great deal about the origin and nature of money. Keynes called this obsession "Babylonian Madness". Money and taxes came first, then markets with money prices.

Money is and always was a form of credit/debt, originally a tax credit in the ancient economies of the Middle East. Money is not a commodity, a thing, as in Menger's story. Money in all its forms is a social relationship between a creditor and debtor. Credit/debt becomes money when it becomes transferable.

As Alfred Mitchell-Innes held, the commodity theory of money, at the heart of Austrian and neoclassical economics, is probably the worst scientific theory of all time. Tom's two ways money enters the economy - really just one way - are exhaustive; they are the only way money has ever entered any economy.

There is no reason to believe that full employment will naturally occur in a monetary economy. Unemployment is a consequence of the taxation which is necessary for the value of money, which causes saving of money. So additional spending by the government is necessary for full employment, which is an obvious improvement in efficiency. Governments do not spend "the taxpayer's money" - the government has an infinite amount of money nominal spending power in its own currency.

James E. Miller said...


Thanks for the reply.

"This is historically false. Money is and always was a creature of the state. MMT/Creditary/Post-Keynesian economists write, read and think a great deal about the origin and nature of money."

Do you have a specific citation or anything? I mean, from my understanding, the concept of "money" evolved from the use of different goods being traded in order to be traded later for other goods. Eggs, butter, fish, or berries for instance were used for say farmer A to trade with farmer B. Instead of farmer A waiting to find a farmer willing to trade a cow for say a backhoe, he could trade his cow for 5 dozen eggs in order to trade the eggs later for the backhoe.

That's kind of the Austrian view of how money started. Money basically became a function of facilitating transactions. I think our view of what constitutes money is different, but I don't think you can dismiss money as a commodity. It still falls under the same purview of diminishing marginal utility for individuals.

Calling the Menger/Austrian theory of money the "worst" theory is a bit harsh. It seems to suppose that money would have never generated without the state, which is just plainly untrue unless you can prove otherwise.

And can someone explain exactly what the JG would compromise of? I get that the money would be passed down for contractors, but what would it be used for specifically? And how can you trust bureaucrats to use the money effectively and not just to buy votes sans FDR and WPA funding.

Tom Hickey said...

James, check out Wray's working paper entitled Money, Tcherneva's Chartalism, and Wray's books, Understanding Modern Money and Credit and State Theories of Money, for example.

There are also many references at the MMT Wiki under Theories of Money, including the articles by A. Mitchell Innes on debt-based money (1913-1914), which are historical.

Regarding an exact proposal for a JG, that would involve a specific policy proposal. I don't know that any MMT economist has worked up a specific policy proposal. There are several general notions that have been floated and I don't that that "MMT" has coalesced around a single proposal.

For example, should the JG replace unemployment insurance? Some say yes (Mitchell), others make it optional (Fullwiler). Should it be a national floor (Mitchell), or should it be variable to circumstance (Wray).

Would administration be chiefly federal, state, or local? What type of work woud qualify?

These are questions that different MMT economists approach somewhat differently.

The basic principle is that the JG would be a standing job offer for anyone willing and able to work that cannot find employment in the private sector. The JG base wage/benefits would be a price floor under the private minimum wage. The JG program would not compete with the private sector but rather constitute a buffer of employed in contrast to the present buffer of unemployed.

See Wray, Job Guarantee, Navigating the Jobs Crisis: Time for a New ‘New Deal’ Jobs Program, and The Job Guarantee: A Government Plan for Full Employment. Employment is Bill Mitchell specialty. See CofFEE. The definitive work to date is, Mitchell and Muysken, Full Employment Abandoned (2008).

James E. Miller said...

@Tom Hickey

Thank you for the resources, I just read some of the paper "Money" by Wray and I just can't get behind this assertion:

"If we begin with the proposition that goods cannot buy goods then we must look
elsewhere for the nature of money. And we cannot presume that markets come before
money for the simple reason that until money exists there cannot be “exchanges” (sales).
Further, money is not something that is produced—it is not a commodity that is produced
by labor (otherwise it would be a “good buying a good”), nor is it something sought to
directly satisfy the kinds of individual needs or desires that motivate production of

The whole things seems contradictory if you look at the beginnings of civilization as a bartering society. If one uses their land and labor to produce a fishing rod and then trades the rod for some kind of hammering device, did a good just not buy a good?

That whole theory of money rests on an incorrect assumption in my opinion. I mean how can you even say money is not produced, even in a fiat currency economy? Certainly computers and such linked to wire transfers of money count as machines made through production right?

I will read the rest of the paper, but that passage itself popped out immediately on my b/s detector.

James E. Miller said...

This also seems contradictory:

"Commodities obtain their value—they become commodities—by exchanging for the
universal representation of social value, money. By the same token, obtaining money
allows us access to all commodities that are trying to buy money."

That passage itself isn't contradictory, but the assertion that money isn't a commodity seems to contradict what this passage says about commodities. So commodities gain value because they are bought by money, yet money is still not a commodity how? Doesn't money have value to that extent as well considering its what is used to purchase commodities in the first place? So if money has value in order to buy commodities, it would seem by the quoted passage above, it would also fall under the purview of a commodity.

Tom Hickey said...

The Robinson Crusoe barter narrative is a story that is made up. Historians of money tell a different story based on historical evidence rather than speculation. "Modern money" is based on debt, and it is at least 4000 years old. See the Innes articles, for example, and Michael Hudson's work. See, for example, The Creditary/Monetarist Debate in Historical Perspective

James E. Miller said...


I don't have time to look over the article now, but will later tonight. I still find it hard to believe the Crusoe argument is made up, I mean how else would market transactions necessarily develop? I suppose the article answers that question, but I also find it weird that any paper would present accurate evidence of very ancient economies (I mean pre-aztec, pre-christ, etc.)

The Crusoe barter system seems like a logical conclusion to make based on the limited resources people had back then.

And what about my question on money as a commodity?

Tom Hickey said...

If all money is someone's financial liability, as the credit-based theory of money claims, and commodities are real goods, then money is not a commodity. Money is created either as government liabilities (tax credits) or bank liabilities (loans create deposits and deposits are bank liabilities). Similarly, other money-like financial assets are someone else's liability. Only wholly owned real assets are unencumbered.

James E. Miller said...


You are disproving the Crusoe barter theory by boxing money into a strict definition. I don't think money falls into that definition, but I guess that's where we differ. You are right from an accounting principle point of view but now from a praxeological view, hence why I can't really back MMT.

Tom Hickey said...

James, there are competing theories of "money,: as you know. MMT takes a stance in this controversy that his based on the credit and state theories of money. The credit theory states that all money is someone's financial asset and someone else's financial liability, and this shows up in the double-entry accounting record. State money acquires value because the state only accepts its own liabilities in satisfaction of liabilities to the state, namely, taxes, fees and fines. Modern money is state money that is credit based, that is, a liability of the state.

MMT economics do not like the term "money" because it is ambiguous, and they generally avoid it, using specific terms that designate precisely the form of money to which they are referring.

Wray uses "money" in his article since it is the statement of a theory of money, the credit-based theory that, combined with the state theory, underlies MMT. It is opposed to the commodity-based theory and metallism.

Again, see the summary and references to articles at the MMT Wiki for the theories of money and the MMT approach.

I find it difficult to understand how a commodity based theory of money or metallism can be defended at this point in time, when we have a global system based on fiat.

James E. Miller said...


I understand the premise of MMT and state determining the value of money, but how would you respond to this:

"As of Friday March 25, 2011 the State of Utah becomes the first in the World to make gold and silver coins minted by the United States Mint legal Tender since 1971. Governor Gary Herbert has signed the bill into law.
You can see the bill's status here:"

By your definition, doesn't metallic/commodity money now gain the kind of value fiat money does in Utah now? There are bills such as this being considered around the country now, one is in California and I think there may be one in Virginia (not sure though).

Tom Hickey said...

It won't actually, and Utah has admitted that this is symbolic. The coins themselves will not be used in transactions because of the fluctuating value of gold, and the fact that the coins will be denominated as a unit of account. As the value of gold increases against the nominal value of the unit, Greshham's law will drive them out of the market as they are hoarded, being worth more than the nominal value. Of course, prices in Utah could vary with the price of gold, but it is highly unlikely that they would do so, since Utah is linked to the wider US economy. It sounds good on the surface, but it is unworkable practically in a modern economy.

James E. Miller said...

@ Tom

You are right, the move is symbolic and most likely unworkable if every state doesn't adopt such measures. I was looking at it from the view of Utah accepting gold and silver for payment of taxes, thereby giving it legitimacy and value under the MMT definition of money.

But as gold continues to go up in price, Gresham's law will take effect as you say and gold will be held on to.

James E. Miller said...

Actually, on second thought, if Gresham's law were to be followed and gold and silver would continue to go up in value, wouldn't that then push the dollar out of use? I mean, if silver and gold are able to purchase more than the dollar, one would think that they would be used more than a devaluing currency. I guess it depends on the amount of gold and silver relative to the population in Utah.

Would gold and silver be hoarded? Maybe, but it would only be hoarded because it is perceived that it will go up in value later, thereby meaning that people were expecting the dollar to lose value.

I may have to think about this a little more, it seems like both possibilities could happen.

Tom Hickey said...

The problem with convertibility is money supply being fixed to the amount of the numeraire being relatively fixed. What happens is that saving reduces the money supply, making currency harder to obtain, not only cash but reserves. The restriction on reserves limited the amount of debt that can be issued.

This is deflationary, lowers aggregate demand, and creates high unemployment because the desire to save resulting in demand leakage cannot be offset with fiscal policy.

The reason for a non-convertible floating rate currency is to allow government fiscal space to address rising unemployment. The bugaboo here, which those preferring a fixed rate currency are concerned about, is inflation. MMT is the only macro theory at present that provides a path to full employment with price stability, using the current monetary system.

What people advocating a fixed rate system fail to realize is that such a system requires that the currency issuer, here the federal government, to forfeit monetary sovereignty and be ruled by the numeraire and its owners.

James E. Miller said...

okay, well now you are speaking Keynesian nonsense now. Do you honestly think that when money is saved, it doesn't go anywhere? I mean if it were placed in a mattress, that would be one thing, but if it is placed in a bank, doesn't it get lent out to be reinvested?

Savings is necessary for capital accumulation and investment in a hard money economy. Fiat systems may be different (that is the MMT perspective it seems), but I don't see fiat currency systems utilizing resources effectively precisely because money becomes virtually non scarce. MMT seems overly concerned with employment rather thane effective use of scarce resources.

And I thought the MMT perspective was that banks are not limited by reserves?

All savings are is a change in time preference of the individual, it is putting of current consumption for later consumption. Is it deflationary? Maybe. As long as prices and wages can freely adjust, then I don't see why there would be a problem. Wages are not as "sticky" as Keynes claimed, he just saw the effect of unionization.

The Austrian theory is the only one that takes into account a priori praxeology and individual purposeful action. Micro econ dictates macro econ ultimately, not the other way around.

Tom Hickey said...

" doesn't it (saving) get lent out to be reinvested?"

Not in a nonconvertible floating rate system, where banks do not lend out deposits, nor do they lend against reserves. They lend against capital. They put capital at risk when they extend loans and obtain reserves afterwards.

Tom Hickey said...

"All savings are is a change in time preference of the individual, it is putting of current consumption for later consumption. Is it deflationary? Maybe. As long as prices and wages can freely adjust, then I don't see why there would be a problem. Wages are not as "sticky" as Keynes claimed, he just saw the effect of unionization."

Saving results in demand leakage in that what is consumed is what is produced. If consumption falls, i.e., aggregate demand falls), then the economy is not producing at full capacity. Since S = I. rising saving results in rising involuntary inventory, which is a signal for business to reduce production or cut prices. Businesses typically choose to cut production instead of reducing prices, and this results in rising unemployment. The Austrian notion of falling prices and falling wages with employment remaining constant is just is not empirically true, even though it may sound good theoretically.

Tom Hickey said...

"The Austrian theory is the only one that takes into account a priori praxeology and individual purposeful action. Micro econ dictates macro econ ultimately, not the other way around."

Macro is not micro scaled up. There is a reason that they are considered different branches of economics. Those in the tradition of Keynes generally acknowledge this, while those not partial to Keynes deny it.

Tom Hickey said...

Regarding methodological foundations, there is a difference among extreme methodological individualism, methodological holism, and methodological localism. MMT is more aligned with methodological localism than either methodological individualism or methodological holism.

Austrian economics as many see it is based on extreme methodological individualism, which is ground in ontological individualism. Ayn Rand takes this to the far extreme in Objectivism.

MMT is basically institutionalist.

See Daniel Little on methodological localismmethodological localism.

Tom Hickey said...

James: "okay, well now you are speaking Keynesian nonsense"

Debates generally argue back to fundamentals and people disagree over fundamentals.

I generally don't waste time arguing with Austrians because it is just going to end in a disagreement over fundamentals.

James E. Miller said...

I apologize for those words, but I think the Austrian theory has done very well at disproving the notion that savings on the net are bad for an economy.

And you nailed it, we disagree on the fundamentals which means we probably won't convince each other on either of our sides. I see some of the value in MMT in explaining how a fiat economy works, but in the end I think an overly abundant money supply leads to misallocations of resources.

I do appreciate the discussion though.

Tom Hickey said...

"but in the end I think an overly abundant money supply leads to misallocations of resources."

MMT professionals generally say that misallocation is more a micro consideration than a macro one. Just as banks can and do make imprudent loans, so too government can make poor decisions in allocation to specific projects and programs. While firms are penalized by markets, government's decisions are subject to the democratic process and there are consequences for poor judgment, both for individual politicians and for parties. For example, the bailout was egregiously mishandled due to Wall Street influence, and there was a political cost.

MMT holds that malinvestment is generally cured by the market, since capital seeks the highest return and abandons poor return. At the micro level, this happens all the time, other than in busts, when things implode in the same time frame and then cascade.

While some say that the best thing to do in crises is to let the market deal with the malinvestment wholesale during crises, MMT disagrees and holds that this involves too great a cost in terms of foregone opportunity and high unemployment, often taking down the good with the bad. Better to cushion the fall and support employment not only for humane reasons, but also the cost/benefit. Economic crises are hugely costly in ways that can never be recaptured. The cost of the inefficient use of capital that occurs in malinvestment is comparatively less.

Moreover, owing to cash flow problems (liquidity) and debt-deflation, many otherwise viable firms are liquidated, as well as a great deal of residential and commercial RE. This can result in a debt-deflation depression that is difficult to recover from.

Economic policy involves trade-offs. Different groups disagree about what they should be, and also disagree over decision criteria.

James E. Miller said...

From that description, MMT seems very Keynesian to me. I guess it comes down to Austrians wanting to let the chips fall so that real economic recovery can began as soon as possible (which also serves as an incentive for the government and other actors to not make the same mistakes again) while Keynesian/MMT want to cushion the fall while dragging out the recovery even more. Of course MMT holds that stimulus efforts should be greater but political will seems unable to go along with that.

Tom Hickey said...

James, MMT is "Keynesian" in that it emphasizes the role of demand in leading investment, so when the economy is underperforming owing to demand deficiency economic policy should be addressed toward increasing effective demand by injecting net financial assets into nongovernment. Conversely, when demand exceeds the ability of the economy to meet it, then NFA need to be withdrawn by taxation. The difference between MMT and other "Keynesian" approaches is that MMT emphasizes fiscal policy over monetary policy.

I have asked MMT professionals about the Austrian malinvestment argument for liquidation and the response I got I stated above — basically, that a crisis not the time to address malinvestment, especially when debt-deflation is a major factor.

Ed Harrison of Credit Writedowns is an Austrian economist who accepts the MMT operational description but disagrees with MMT over its treatment of malinvestment.

James E. Miller said...


Thanks, I will be sure to check Harrison out!

Tom Hickey said...


Ed has a couple of posts on MMT that you should be able to locate at Credit Writedowns. If not, I have the URL's on file.

Best regards,

Anonymous said...

Just saying, for the record. Macro = Micro scaled-up must be the biggest bullshit spoken out out there.

It's completlly ignores how the real world and our current universe works with a pletora of laws which render this vision obsolete. Aparentlly most economists lack scientific formation and are unable to learn from other complexity sciences (which are actually, all, including physics, which does also take place in our caotic, uncertain and stochastic universe). And no, building pretty mathematical models w/o empirical foundations and not testable/falsable is not scientific.

Also 'austrian economics' ignore some of the things Marx actually got right: capital accumulation, falling rate of profits, etc. and the problems they cause in a procyclycal system (like capitalism is, thanks to the very nature of money, which is not just an evolution of 'barter economics' like the missguided Robinson Crussoe story tries to explain) and get disguised in the 'business cycle'

The solution from MMT perspective to this is inflationary (constantlly increasing the money supply, either by the means of debt-based money (credit money), or by the means of fiat, government based high powered money (and eventually, it's all about the fiat, as credit money is just a liability from the financial system to the CB/government, and MMT acknowledges this). I don't like this because I think the money problem is not just a flow problem, but also a stock problem. And building huge stocks of money supply is by its nature procyclical (asset bubbles, financialization and speculation-driven economy, etc.)

I would actually like a stronger proposal to propping up the money circulation instead on relaying in just ever increasing money supplies, for example a demourage interest rate on financial capital and top 1-10% (progressive taxes); well, even USA had this sort of socialist taxes not so long ago, but guesss what would happen today if politicians where to place 90% taxes on the rentier class. Good job on the 'austrian' propaganda by and for the rich, and great work neoliberalism on globalization of financial capital so it can't be controlled by political power.

But I guess making rich people richer will help us at some point, cleaning up all that malinvestment and stuff, right? A combination of Reaganomics, von Mises and Friedman will fix all our troubles.

P.D: Praexology is a joke from an epistemic point of view, you may just call it 'faith'.

Tom Hickey said...

Good work, Anonymous.

BTW, MMT is not just based on the sectoral balance approach and functional finance, with a JG as a buffer of employed and the JB wage serving as price floor.

A great deal of MMT analysis is Minskian, and MMT addresses the concern about asset price, wealth inequality, etc., on this basis. It is a reason that MMT prefers fiscal policy to monetary policy, since fiscal policy can be tightly targeted. Tax policy can be design to address the issues you and others raise.

For example, Michael Hudson proposes taxing economic rent — land rent, monopoly rent, and financial rent — to discourage rent-seeking behavior and encourage gains from productive contribution both by entrepreneurs and workers.

On the other hand, Warren Mosler focuses more on regulation to do this, and Bill Black observes that a lot of the present mess can be addressed legally by enforcing present statute, since it was a criminal enterprise emanating from the top and controlled by the top.

Obviously, just pouring money into the present system will just see it funnel to the top, and MMT economists are well aware of this. This sorry state of affairs must be addressed with fiscal policy, and regulation, enforcement, and strict accountability.

This will require a political revolution reversing the status quo, since a plutocratic oligarchy has captured the apparatus of the state. I don't think that MMT folks are naive about what is required and how difficult it will be to implement. If you look at Warren Mosler's proposals for the banking system, it would neuter the financial system and return it to old-fashioned banking.

That isn't going to easy to accomplish politically, given the power and influence of the financial sector that is skimming a significant portion of GDP with rent.