Thursday, January 17, 2019

John T. Harvey — But Can The Government Afford It?

We’ve been hearing that a lot lately, being asked about things like the proposed US-Mexico border wall, the possibility of universal health care, and even regarding existing programs like Social Security. It’s a relevant question, to be sure, but 99 times out of 100 (or maybe 999 out of 1000), the context in which it is placed is completely wrong.
I say this because the question is almost always asked regarding whether or not we have enough money. If there is one place where the economics discipline has most substantially let down the general public, it’s in explaining how the financial sector works.
Long story short: money is not a scarce resource. Labor is, oil is, clean water is. Money is not.
Money can be and is created with a keystroke, just as easily as I am typing these words. This is true in both the public and private sectors....
Forbes — Pragmatic Economics
But Can The Government Afford It?
John T. Harvey | Professor of Economics, Texas Christian University


Bob Roddis said...

This MMT "professor" claims: Imagine if we really had to wait for people to save up enough cash for entrepreneurs to build restaurants, shopping centers, movie theaters, car dealerships, etc. Economic expansions would be very few and very weak.

That's the BIG LIE of Keynesian analysis and MMT. At least someone has finally stated this nonsense in a clear, unambiguous statement.

There is no basis in fact, evidence, history or logic to support this assertion.

Calgacus said...

It's not a big lie. Investment including government investment/spending comes before and causes savings, not the other war around. The reasoning in Austrian economics is not bad - the problem is that it starts from a bad theory of money. There isn't any other kind of money than funny/fiat/credit money and there never was or could be.

AXEC / E.K-H said...

Bob Roddis, Calgacus

Both, the Austrian and Keynesian theories of saving/investment/profit are false. The correct relationship is given by Q=I−S for the elementary case and by Q=I−S+Yd or Qre=I−S for the case with profit distribution.#1

Obviously, you have not understood anything to this day. This is the unassailable proof that you are hopeless idiots.#2 So any explanation of the macroeconomic Profit Law would be futile.

The good news for you that there are hordes of self-appointed economists in the same situation.#3 The bad news is that all of you go down the scientific drain.

Egmont Kakarot-Handtke

#1 How Keynes got macro wrong and Allais got it right

#2 Economists simply don’t get it

#3 DrainTheScientificSwamp

Noah Way said...

Don't feed the troll.

Bob Roddis said...

AXEC: There is no "profit law".

Marxists: Marxism hinges upon the truth of the "labor theory of value". It is pure nonsense. Value is purely subjective. The ultimate value of everything is subjective so that the amount of labor hours applied to a particular good or product is irrelevant to its sales price.

S400 said...

Bob Roddis wrote:
”I want money that maintains its value over the years.”

Bob Roddis wrote:
”Value is purely subjective. The ultimate value of everything is subjective.

So Bob wants money to keep its subjectiv value which is what? Bob Roddis subjective value of money?

Bob Roddis said...

Value is completely subjective but certain commodities tend to maintain their value over time. That's all pretty self-evident and undeniable. Leave it to MMTers to deny the undeniable.

S400 said...

So the value of money is completely subjective which means that if the value of money fluctuates it’s just subjective at any given time.
So you if any should accept fiat funny money.