Matin Armstrong shoots from the hip at MMT — and hits himself in the foot.
Yes, you can just create money to fund the government and it is confined by inflation. That is a true statement if taken by itself. However, you cannot then borrow with no intention of paying down the debt because the accumulative interest payments will end up representing 100% of the debt. This theory fails for it ignores dealing with the debt.A currency sovereign can always service its debt — principal and interest — by issuance. The constraint is still inflation and that is a consequence of availability of real resources to meet effective demand.
Armstrong Economics
New Monetary Theory is Like Sleepwalking
Martin Armstrong
“Yes, you can just create money to fund the government and it is confined by inflation. However, you cannot then borrow with no intention of paying down the debt because the accumulative interest payments will end up representing 100% of the debt. This theory fails for it ignores dealing with the debt.”
ReplyDeleteHuh? The US government does not borrow one penny of its spending money from anyone. And even if it did, why does this clown think the US government would borrow with no intention to repay? With stupidity of this caliber, I’ll bet this moron has a Ph.D.
”This theory that they are now teaching kids is not practical. It is only a theory, not a solution.”
What theory? MMT? Is that being taught to children? Where?
Also, this twit does not understand the difference between a hypothesis and a theory. A hypothesis is an educated guess, whereas a theory (e.g. MMT) consists of a nexus of facts. A theory provides a reliable, objective, and testable explanation. A theory is not a hunch or a guess.
“We must first address the entire social system in place because so many people think they are entitled to something.”
We are all entitled to decency and respect. Rich people feel entitled to be worshipped.
The system as-is cannot be sustained. We have to go through a monetary system reset in which we deal with the debt.
Which debt are you talking about? Public or private? Be specific or shut your hole.