Mike and panel members offer some commentary and analysis on current economic issues. Mike deftly works in (great job Mike!) some axioms of MMT towards the end of the piece (that sadly seem to go right over everybody else's head), debunking the "confidence fairy", "taxpayer on the hook" and where USD balances originate.
nice job working MMT in there, loved the comparison to Ford having to collect all their old cars to make new ones..
ReplyDeleteGreat job Mike. That was fun to watch.
ReplyDeleteWhat show and what time was this on? I'd like to email the show and thank them for having you on.
ReplyDeletelove it man. rock star material
ReplyDeleteThat was very good.
ReplyDeleteThat was lots of fun to watch.
Added it to my playlists.
Great Job Mike.
ReplyDeleteI like the analogy with the Ford collecting cars, it reminded me of watching one of Warren Mosler's videos, and he used a similar analogy with bus tickets. Such analogies definitely help get the MMT message out there.
BTW
ReplyDeleteIf anyone wants to help convert Bitcoiners over to MMT, I would definitely appreciate the help.
I think Bitcoin will make it easier to convert people than other forums, because to understand and have faith in the Bitcoin currency you must be able to accept the reality that Bitcoins are created out of nothing.
Therefore most Bitcoiners are half-way there, in that they acknowledge that currency is created out of nothing, they just need to be shown how such currency is created in a conventional economy.
The Myth of Government Debt
Is American Debt Default Really Possible???
Why do we need to Tax?
Let Greece Default!
Government Debt is the Source of Private Savings
Shaun Hingston
garys a douche. we should make the health care bill simple, make it single payer. i guess he is ok with serfdom. stuffed suit
ReplyDeleteDave,
ReplyDeleteThe "confidence" issue seems to be the last card that economic policy analysts on the political right have left to play right now... it is "on eleven" in the right media for the last month or so... Mike is correct, when we get more orders, businesses will hire... they should be focusing on macro policy that increases orders...
President Kennedy crushed the confidence fairy underfoot in his 1962 Yale Commencement Speech (the whole speech is excellent).
ReplyDeleteCorporate plans are not based on political confidence in party leaders but on an economic confidence in the Nation's ability to invest and produce and consume. Business had full confidence in the administrations in power in 1929, 1954, 1958, and 1960--but this was not enough to prevent recession when business lacked full confidence in the economy. What matters is the capacity of the Nation as a whole to deal with its economic problems and its opportunities.
http://www.jfklibrary.org/Research/Ready-Reference/Kennedy-Library-Miscellaneous-Information/Yale-University-Commencement-Address.aspx
Last night I stumbled over a summary of the counterinsurgency manual David Petraeus co-wrote.
ReplyDelete"The focus of counterinsurgency is the people: provide for the people, protect the people, and convince the people of their government‘s legitimacy..."
http://tinyurl.com/424ay2x
A pity our public officials focus instead on providing, protecting and convincing the campaign donor class.
"If anyone wants to help convert Bitcoiners over to MMT, I would definitely appreciate the help."
ReplyDeleteDon't know about the rest of bitcoiners, but the guy (or guys?) who invented bitcoins is an Austian, I guess. There is a nice article about bitcoins in the latest New Yorker (it is not free online) and it says that the mysterious programmer's Satoshi Nakamoto posting online were full of von Mises and such...
@ Peter
ReplyDeleteI wonder how they square Bitcoin with "sound money."
I like the digital currency concept precisely because it is unsound money that is under the control of neither the state nor the financiers. In the digital wold that we are now entering, I think it has legs.
Shaun,
ReplyDeleteI'm getting flipped around on the logic here. I see what youre saying wrt bitcoins " that currency is created out of nothing," or ex-nihilo but then again nothing can come from "nothing".
I see ex nihilo applying as to the bitcoins are not based on a weight of metal or some other substance or commodity, yes I see that... but it seems that bitcoin is some form of 'credit money' and it "comes from" the full faith and credit of the users and fellow users of the bitcoins...
State currency seems to "come from" the authority of the state wrt the states ability to collect taxes in that said same currency...
So in some ways I see an ex-nihilo characteristic (value doesnt come from a commodity) and then some ways I dont (state/govt taxation authority is a reality and is not literally "out of nothing")...
Hard to be logically consistent here.... Resp,
I am not sure, Tom, and hadn't time to explore it. From what I get, the guy (Satoshi) created a very, very sophisticated cryptographic system extremely resilient to attacks (Dan Kaminsky of the DNS vulnerability fame tried to hack it and failed). The system releases bitcoins in some sort of lottery - 21 mm over the next 20 yrs. So, it ensures the bitcoin supply is totally controlled. It is thus similar to gold supply, that is a function of mining - just that "mining" here happens virtually and is apparently very hard to compromise.
ReplyDeleteIt is a fascinating article, wish I could post a link, but it is not free online.
that's a great point matt.
ReplyDeleteI think the difference is between the creation of new DOLLARS versus the creation of a new CURRENCY.
New dollars within that currency are created ex-nihlio.
But a new currency does need to have some sort of "tie-in" to people's real life and real world. In a sense a new currency is really nothing more than a very, very formal sales pitch. With currencies it seems to me you can go two routes with the pitch:
#1. force it down their throats through taxes, jail, fines, etc.
#2. slowly and steadily incorporate the system into the society so that it is almost like a fixture that has a positive feedback mechanism built into it. Bitcoin is trying this way and for good reason considering the lack of force they have.
Mario,
ReplyDeleteYes that helps me... US dollars are created ex nihilo, currencies are not.
State currencies 'come from' the authority of the state. Private currencies 'come from' trust between counterparties or something like that...
Thanks a lot, 'm sure more to follow...
"Private currencies 'come from' trust between counterparties or something like that"
ReplyDeleteBut ultimately their value will be established by Tsy. If bitcoins simply appreciate in value against the dollar-- the word for that is "unrealized capital gains". But who determines what the bitcoin/dollar exchange rate is? Our friends at Tsy, naturally.
Any transaction conducted using bitcoins will have tax issues to consider at both the federal(income/capital gains, excise) as well as state level (sales, property, asset transfer, income). Once the Federales exercise their discretion to determine the bitcoin "exchange value" for tax purposes, the states will tag along.
@ Peter
ReplyDeleteOK, I get it. Accounts for why Bitcoins are being hoarded rather than used for exchange? Austrian economics considers "sound money" chiefly as a store of value.
Barter club currencies are presently working for exchange, even fairly large sums. I know people that regularly accumulate thousands of "dollars" in barter club currency when they anticipate using it in the near future.
ReplyDeleteSorry, should have mentioned that Bitcoin transactions clearly fall under IRS "bartering income" regulations. If Bitcoin isn't filing the annual transaction report for all US customers with the IRS, this falls into that unfortunate business model called "tax evasion".
ReplyDeleteIf you engage in barter transactions you may have tax responsibilities... Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter - barter for another’s products or services - you will have to report the fair market value of the products or services you received on your tax return...
Barter exchanges have an annual obligation to report your bartering proceeds to the IRS.
http://www.irs.gov/businesses/small/article/0,,id=188095,00.html
again great stuff Beowulf...just great.
ReplyDeletethis is exactly why I am not interested in other currencies or what have you. My dollars are fine with me.
If anything I look at longer term forex valuations and which currency is the best to house my money.
Other than that I don't need to re-invent the wheel and have to deal with the IRS and whatnot.
By the way, in the same New Yorker issue there is also a pretty good article on Keynes:
ReplyDeletehttp://www.newyorker.com/reporting/2011/10/10/111010fa_fact_cassidy
Out of paradigm at times, of course, but better than most stuff you hear nowadays in the media.
@ beowulf
ReplyDeleteRight. In the 80's IRS made it abundantly clear to the bater community that it was serious about tax obligations. Most people got that massage loud and clear when IRS conducted some big busts. I found out about it from friends who were active in the barter community at the time.