Monday, June 18, 2012

Warren Mosler — Greece after math

After you do the maths it still doesn’t add up.
It can’t add up.
Given today’s institutional structures- pension funds, insurance reserves, etc.- that include massive, tax advantaged, demand leakages where private sector credit expansion is bound to periodically fall short full employment levels. And with the private sector necessarily pro cyclical, counter cyclical fiscal adjustments are, for all practical purposes, entirely in the realm of the issuer of the currency- the ECB, and not the users of the currency- the euro member nations.
In other words, as previously discussed, the maths can’t add up without the ECB, directly or indirectly, writing the check.
And that includes the banking system, which, to serve public purpose, requires credible deposit insurance, again meaning support from the issuer of the currency.
Read it at The Center of the Universe
Greece after math
by Warren Mosler


Charles Hayden said...

This week: Warren at Occupy Dallas

Saturday June 23rd.

First United Lutheran Church 6202 E Mockingbird Ln, Dallas, TX 75214-2619

Speech at 11 am.

PeterP said...

OT, but I highly recommend to read what one historian writes about medieval European states' ability to issue debt and economic growth. He is definitely out of paradigm as he thinks they had to borrow their money (from whom???). It would be very interesting to expose him to MMT and see why his account contradicts what one would expect based on MMT and David Graeber's work - money as debt, driven by taxes or other state- or church-imposed liabilities.

Ryan Harris said...

Hmm I wonder if I could get an autograph on my 7DIF.

Matt Franko said...


This is a huge problem with the academe of history.

It looks like the main thesis is that the size of the City-State alone would provide access to "credit", but they have nothing from the archeological record and no surviving documentary evidence.

It looks to me that they assume exogenous "money" like the orthodoxy of economics also does today, and both are way wrong on this. It would be interesting to see if the academe of history would come around on this if confronted with the illogic, or if they would dig in with the economists...

Interesting find...


y said...


You should read Alfred Mitchell-Innes:

'What is Money' (1913)

'The Credit Theory of Money' (1914)