Getting the word out.
Favorite line:
Gar Alperovitz: Let me just say one thing. I’m from Racine, Wisconsin. I had an aunt who ran a little tiny Jewish bakery. She used to say, “You know, during the Depression there wasn’t any money around. Then they decided to run a war, and there was all kinds of money around. Why can’t we do that when we want to do that?”real economics
How are you going to pay for it? Why Understanding Monetary Theory and Policy Is Critical For the Left
Tony Wikrent
See also
Portugal Dared to Cast Aside Austerity. It’s Having a Major Revival.
Liz Alderman
See also
At a time of mounting uncertainty in Europe, the country has defied critics who insisted on austerity as the answer to the Continent’s economic and financial crisis.Rigged Game
Portugal Dared to Cast Aside Austerity. It’s Having a Major Revival.
Liz Alderman
cross-posted from The New York Times
Q. “During the Depression there wasn’t any money around. Then they decided to run a war, and there was all kinds of money around. Why can’t we do that when we want to do that?”
ReplyDeleteA. We can’t do that because average people (most of them) have been programmed to believe and defend the lies. When anyone proposes having social programs, average people ask, “How will you pay for it?”
No one asks, "How will you pay for it?” whenever the government wants to create more billions of dollars for war, weapons, and Wall Street bailouts.
Bernie Sanders echoes the lies by calling for tax increases, which are not necessary, since the U.S. government creates its spending money out of thin air.
The New York Times article is misleading. It causes readers to think that austerity is always bad. In reality, austerity is bad for nations that have monetary sovereignty and whose currencies are widely accepted (like the U.S. and U.K.).
ReplyDeleteHowever austerity is unavoidable in nations that do not have monetary sovereignty, and do not have a trade surplus (like Portugal has).
Portugal had a trade deficit until 2013. And since the Portuguese government cannot create its spending money out of thin air (Portugal adopted the euro on 1 Jan 1999) the Portuguese government was forced to take loans from the Troika and from bankers (who create their loan money out of thin air).
Since 2013, Portugal has continually swung back and forth between having a trade surplus and a trade deficit. This means that Portugal brings in euros via a trade surplus, but has those same euros sucked back out again by next month’s trade deficit, and by debt payments.
“While countries from Greece to Ireland — and for a stretch, Portugal itself — toed the line, Lisbon resisted, helping to stoke a revival that drove economic growth last year to its highest level in a decade.”
I am very skeptical of this claim. In Jan, Feb, April, and May of 2018, a total of 2.2 billion euros was sucked out of Portugal’s economy by the trade deficit. This is not a “revival of economic growth.”
The New York Times article is full of statements like the following...
“Foreign investment in aerospace, construction and other sectors is at a record high.”
I deny this. As long as your nation has [1] a trade deficit, and [2] no monetary sovereignty, your nation will have ever-increasing austerity, debt, and recessions, no matter what.
The entire Times article sounds fishy.
MMT is gangsta economics
ReplyDeleteComment on Tom Hickey/Tony Wikrent on ‘How are you going to pay for it? Why Understanding Monetary Theory and Policy Is Critical For the Left’
The journalist’s qualification consists of only one skill and that is how to write an emotion-catcher. First, the you-can-trust-me personality frame: I am from Racine, Wisconsin, then comes auntie with her heart-warming practical wisdom: “She [my aunt] used to say, ‘You know, during the Depression there wasn’t any money around. Then they decided to run a war, and there was all kinds of money around. Why can’t we do that when we want to do that?’” Gotcha, politicians, auntie from Wisconsin sees through your shenanigans!
The educated answer to the apparently dumb question How are you going to pay for it? is nobody because in a fiat money system WeThePeople/Government/Central Bank can easily produce money in any quantity. This MMT standard answer is, of course, true, but only technically.#1
Let us come back from BS journalism to reality. The correct answer is: Dear questioner, it is YouThePeople who pays for it through stealth taxation and economically it does not matter at all whether the governments deficit-spending is for military or social purposes. The first thing to grasp is: YOU pay in real terms, either through open or stealth taxation.
But that’s not all. Because of the macroeconomic Profit Law it holds always and everywhere: Public Deficit = Private Profit. So, it does not matter how the deficit money is spent, in any case, it increases macroeconomic profit by the same amount ― to the penny.#2 WeTheOligarchs say thank you to YouThePeople!
There is one correct way for the central bank to inject out-of-thin-air money into the economy and that is by financing a growing wage bill. The false way is the counterfeit-money-printer’s way, that is, to spend the additional money on current output. This leads to stealth taxation via the price mechanism or, as the euphemism goes, via the invisible hand.
Why do MMTers always laugh at the question How are you going to pay for it? Because they know that it is always the sucker who asks. Yes, it’s a rigged game, and journalists, economists, and MMTers are part of the plot.#3 That’s rather funny as any auntie from Wisconsin can tell you.
Egmont Kakarot-Handtke
#1 For the full-spectrum refutation of MMT see cross-references MMT
http://axecorg.blogspot.com/2017/07/mmt-cross-references.html
#2 Keynes, Lerner, MMT, Trump and exploding profit
https://axecorg.blogspot.com/2017/12/keynes-lerner-mmt-trump-and-exploding.html
#3 The Kelton-Fraud
https://axecorg.blogspot.com/2018/07/the-kelton-fraud.html
There is one correct way for the central bank to inject out-of-thin-air money into the economy and that is by financing a growing wage bill. AXEC / E.K-H
ReplyDeletePlease elaborate.
Andrew Anderson
ReplyDeleteFor more enlightenment follow the link:
MMT: Richard Murphy’s battle-for-money hoax
https://axecorg.blogspot.com/2018/06/mmt-richard-murphys-battle-for-money.html