Pavlina Tcherneva:
There is nothing more crippling to a bold policy agenda than the myth that the government can run out of money. This myth is behind every But how will you pay for it? objection to proposals such as a Green New Deal and Medicare for All. New House Majority Leader Nancy Pelosi (D-Calif.) has even proposed instituting self-defeating PAYGO (pay as you go) rules, which would require all new government spending to be matched with increased revenue, wrongly prioritizing the balancing of the budget over the well-being of the public.
Dispelling this myth is at the heart of an economic approach that is rapidly gaining a global following, known as modern monetary theory (MMT). MMT stresses that, in the modern world, where government-backed currencies are no longer backed by gold or other commodities, federal governments can’t run out of financial resources. Unlike states and municipalities (which have hard constraints on spending), for the federal government, all funding shortages are artificially created. Understanding this changes everything—from the economic possibilities before us to what the public can demand from our government.
In These Times
PAYGO Is Based on a FallacyPavlina R. Tcherneva | program director and associate professor of economics at Bard College and research associate at the Levy Economics Institute
Max Sawicky:
Pavlina asserts that an ideology of fiscal rectitude, embodied in the How will we pay for it? mantra, places impossible barriers before progressive public spending initiatives. For a number of reasons, however, this isn’t quite right.…
There are a bunch of ways to justify additional public spending without recourse to MMT....In These Times
The Best Way To Argue Against PAYGO
Max B. Sawicky | independent economist and writer based in Virginia, formerly at the Economic Policy Institute in Washington, D.C.
Fadhel Kaboub:
The rising popularity of modern monetary theory (MMT) has inevitably brought misconceptions. Critics across the political spectrum often claim that MMTers want sovereign governments to “just print money” with no concern for the national debt or, as Max B. Sawicky suggests, inflation. Some, especially on the Right, point to Venezuela and Zimbabwe as classic cases of hyperinflation.
But MMT points to a different primary cause of inflation in developing countries: not domestic spending, but foreign debt and a resulting lack of “monetary sovereignty.”...
In These Times
Why Government Spending Can’t Turn the U.S. Into Venezuela—When poor countries fall prey to inflation, it’s not because they’re “too socialist.”
Fadhel Kaboub | associate professor of economics at Denison University, and president of the Global Institute for Sustainable Prosperity
Fadhel Kaboub | associate professor of economics at Denison University, and president of the Global Institute for Sustainable Prosperity
4 comments:
MMT is useless without bank reform. As things are now, the more money the government creates, the more money the bankers will suck up for themselves.
Regarding Nancy Pelosi, everyone knows that she is a liar who keeps the U.S. House working for Wall Street. This is what Trump Derangement Syndrome is for. It allows people to deny what they see with their own eyes.
PayGo allows military spending and corporate subsidies to keep increasing, while politicians falsely claim that that there is “no money” for social programs which help average people.
PAYGO Is Based on a Fallacy
This article is correct.
“The Best Way To Argue Against PAYGO”
The article is bullshit.
The author pretends to defend MMT in a lame attempt to refute it. For example, the author pretends that the US government borrows its spending money…
“The public’s aversion to such an expansion can be overcome by mobilization, not in support of any arcane economic theory, but on behalf of the nice things that more debt would make possible: Medicare for All, free college, etc.”
These things do not involve more debt, since the US government creates it spending money out of thin air.
The article calls leading Democrats “timid.” Nonsense. Leading Democrats work for Wall Street and the rich, just like Republicans. Leading Democrats pretend to oppose Republicans, when in reality they oppose progressive Democrats. Leading Democrats only care about getting personally re-elected with Wall Street’s money. They don’t care if Republicans gain a majority, since leading Democrats and Republicans are identical.
Why Government Spending Can’t Turn the U.S. Into Venezuela
“For developing countries, the problem begins with trade deficits and the resulting debt owed in foreign currencies.”
I’ve been saying this since I first started commenting on this blog. Nice to see than someone gets it.
“Postcolonial countries are typically unable to produce enough food and energy to meet domestic need, and they face structural industrial and technological deficiencies. Because of this, they must import food and energy, along with essential manufacturing inputs.”
If a nation is not self-sufficient, and if its currency is not widely negotiable outside its borders, then the nation will experience severe foreign debt and internal poverty. In order to survive, these nations take loans from the IMF, which further increase their indebtedness and poverty.
An example is Argentina. Nestor and Christian Kirchner, as presidents, got Argentina out of the hole by refusing to pay the IMF, and refusing to pay speculators that had bought Argentina's foreign debt.
The current president, Macri, has reversed this and has taken the biggest loans in IMF history. As a result, Argentina is now a nightmare for all but the rich.
MMT is NOT bold policy but spineless fraud
Comment on Pavlina Tcherneva on ‘Tcherneva, Sawicky and Kaboub on MMT and policy’
“There is nothing more crippling to a bold policy agenda than the myth that the government can run out of money. This myth is behind every But how will you pay for it? objection to proposals such as a Green New Deal and Medicare for All. New House Majority Leader Nancy Pelosi (D-Calif.) has even proposed instituting self-defeating PAYGO (pay as you go) rules, which would require all new government spending to be matched with increased revenue, wrongly prioritizing the balancing of the budget over the well-being of the public.”
Imagine PAYGO is institutionalized, does this prevent bold social policy? Not at all! Under PAYGO conditions, a Green New Deal and Medicare for All can be financed by a reduction of military spending and higher taxes for the rich. This, of course, is anathema among MMTers. Why? Because MMTers are fake Progressives.
MMT is about permanent deficit spending and this doctrine comes under the headline of Functional Finance. Now, macroeconomics tells one that Public Deficit = Private Profit and from this follows that permanent deficit spending amounts to a permanent free lunch for the one-percenters. The social benefits that can be achieved with deficit spending are paid for in real terms through stealth taxation by the ninety-nine-percenters themselves.
Self-styled MMT Progressives use the Green New Deal and Medicare for All as a pretext for public deficit-spending/money-creation that ultimately benefits the one-percenters. Because they are agenda-pushers for the Oligarchy, MMTers never answer the question How will you pay for it? with a cutting of military spending and taxes for the rich. The boldness of Progressives ends exactly where the Oligarchy loses their sense of humor.
To pay for social benefits with deficit-spending/money-creation is simply a political fraud.
Egmont Kakarot-Handtke
Don't feed the troll.
"MMT is useless without bank reform. As things are now, the more money the government creates, the more money the bankers will suck up for themselves."
we are all bankers are we not?
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