An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Tuesday, February 26, 2019
Zero Hedge — MMT Is Even More Dubious Than AOC's Green New Deal
Robert Murphy again. Nothing new. Just posting for the record.
The MMTers are “right” in the sense that yes, modern governments that issue fiat currency need never default on their bonds. But they are wrong if they think this observation absolves Alexandria Ocasio-Cortez from explaining how she will pay for the Green New Deal. The printing press doesn’t create real resources, it only obscures the method by which the government siphons them away from the private sector.
"Tis but a scratch", says Tom "Black Knight" Hickey.
Are you seriously denying that Austrians have noted for decades that a government could emit and/or spend as much fiat funny money as it wanted in lieu of taxation?
Also, I've noted here since 2011 that your policy proposals do not follow from your BIG INSIGHT (which is not new or previously unknown).
The idiot author (one Robert Murphy) says that any Green New Deal would have to be paid for with massive tax increases, since the US government runs on taxes. He says the AOC’s references to MMT are a “cop out.” He says MMT is correct, but it’s wrong because it’s not new. He admits that the US government can create infinite money, yet he clings to the question of “How will you pay for it?”
No, "Konrad", I find you inspiring. No one said "that any Green New Deal would have to be paid for with massive tax increases, since the US government runs on taxes."
What Murphy said was. "The printing press {or electronic computer generated fiat money} doesn’t create real resources, it only obscures the method by which the government siphons them away from the private sector."
Since that is demonstrably true and one of the many fatal flaws of MMT proposals, it must be mocked or ignored. Your anticipated inability to engage it inspires me.
Today Rep. Pramila Jayapal (D-Wash.) will introduce her Medicare for All Act of 2019.
MMT neutralizes the “How will you pay for it” ruse. This is why so many morons are attacking MMT.
Idiot Roddis says there are “no real resources” to spend federal dollars on. There are no doctors, hospitals, or clinics. No goods or services.
In other words, ”ZIMBABWE!”
People across the USA are literally dying because they can't afford insulin or the cancer treatment they need. Why? The USA is the only major country that does not guarantee healthcare to our residents. Why?
Because of idiots like Roddis shouting, ”ZIMBABWE!”
In other words the government is utterly unable to create money. MORON ALERT
"Noah Way" is lying. He is unable to engage the argument because there is no evidence that either Murphy or I or any Austrian has claimed that the government is unable to create money. The use of the term "inflation" is meant to concede that the government can create money to obtain resources. Murphy gives example after example of famous Austrians acknowledging for decades that the government has this ability if it wants it. In fact, I thought Murphy overdid it. I guess I was wrong since you numbnuts still missed the argument. On purpose?
Idiot Roddis says there are “no real resources” to spend federal dollars on. There are no doctors, hospitals, or clinics. No goods or services.
"Konrad" is lying. I never said there were "no real resources". What I said and what Murphy said was, "The printing press {or electronic computer generated fiat money} doesn’t create real resources, it only obscures the method by which the government siphons them away from the private sector."
Because that is THE fatal flaw in MMT proposals, MMTers cannot and dare not engage it and must distort the arguments of the people who point it out. Also, MMTers seem compelled to act like 4th graders and call their critics pathetic names while ignoring counter arguments
All resources belong to the private sector. Government has no right to interfere with the private sector. The government may not use violence (taxes) against the private sector.
By direct inference, the government has no right to protect citizens (the "public sector"). Therefore government should be abolished so that the private sector can lie, cheat, steal, and murder without restriction, as is being done right now without MMT.
What I said and what Murphy said was, "The printing press {or electronic computer generated fiat money} doesn’t create real resources, Bob Roddis
Nor does lazy, risk-free fiat hoarding beyond legitimate liquidity needs.
it only obscures the method by which the government siphons them away from the private sector." Bob Roddis
The government-privileged usury cartel drives business, State and local governments and the population into debt but does not provide the required interest except as more debt (except for the little they recycle into the economy via consumption).
Fiat creation can provide that interest.
Do you object to people, etc. being able to pay their debts, Bob?
Given that money is an inter-mediating commodity that provides a connecting relationship to real resources there was always going to be an issue of either the private sector clearing banks or government or both creating too much money relative to the real resources and so means of rapidly withdrawing the excess is needed to prevent abnormal inflation.Of course those who extract "rent" from lending money to government are going to fight tooth and nail pretending the mechanism for giving money credibility is not available to government. Such a belief is beyond stupidity it's purely venal.
The whole idea of fiscal space is that government is creating funny money to fill the gap created by saving desires. The arguments should be over the priorities and productivity of that spending not the terminology. MMT is only possible because people tend to hoard money. The entire proposition is that it's possible to spend more WITHOUT causing ANYANY additio inflation. Obviously, not strictly true because government tends to spend in hot areas and hoard the skilled labor in shortest supply while refusing to hire and train those most in need, but none the less, the ideology and theory, while superficially revolting as Roddis always points out, is what it is. Ugly or not, it should work as long as wacky progressives don't completely destroy productivity.
"The arguments should be over the priorities and productivity of that spending"
Yes.
"MMT is only possible because people tend to hoard money"
No. What does money hoarding (and let's be clear here, it is the < 1% that is hoarding money) have to do with making MMT possible?
"government tends to spend in hot areas and hoard the skilled labor in shortest supply while refusing to hire and train those most in need"
Government spends in areas that reward and benefit the donor class (< 1%). Hoarding labor? Hahaha - private industry pays better, unless you're a politician and ride both horses.
Now define "productivity". Is it human and environmental health or how much money you can squeeze out of anything (especially money)?
Fiscal space and unemployment are typically caused by savings and import leakages. Other real and financial causes too but for monetary purposes, those are the big issues caused by the system itself.
By increasing productivity I generally mean using fewer inputs to produce a unit of output. And vice versa.
You have to consider not just govt employees but also private sector people doing work for the govt. When the govt wants a project done often times they "hoard" private sector workers for their projects by overpaying. A guy who used to do a lot of work on my home in Ga got to do some govt contract work at times and it was well worth his while to drive 10-12 hrs and hire guys closer to where the project was, even if just for a week or two of work. So the govt gets their stuff done in front of private sector projects when they want to by dangling big carrots. Funny enough a lot of these guys are anti "big govt" but they sure don't complain when the gravy train rides through their living room. This is how we get the proverbial 400$ toilet seats.
It doesn't always involve small guys like the above story but usually involves someone connected to the donor class as you say. Dont get me started on "productivity", a simple cut in wages by a few percent that doesn't decrease your output is magically an increase in productivity!! No ones done anything special or innovative. ,
The government is the biggest employer, directly or indirectly, and yes, you don't here those who benefit screaming SOCIALISM! That was not the point. I was referring to policy that benefits a specific class. Bigger picture.
"Fiscal space and unemployment are typically caused by savings and import leakages."
Bullshit, they are caused by policy choices.
"using fewer inputs to produce a unit of output"
Like commodities trading, buying up a company then breaking it up and selling off the parts, Ponzi schemes, criminal accounting, monopolization, bribery, fraud, tax avoidance, reduced labor costs, etc. Productivity is up! Woo Hoo!
"Bullshit, they are caused by policy choices." "Like commodities trading, buying up a company then breaking it up and selling off the parts, Ponzi schemes, criminal accounting, monopolization, bribery, fraud, tax avoidance, reduced labor costs, etc. Productivity is up! Woo Hoo!"
What is that all about? Do you need to vent some frustration with the financial system? Go on then. I'll put the kettle on. Tell us how you would fix the economy.
The problem is a bad value system. Money is the measure of everything, but the only thing that money really measures is itself. It does not measure the quality of your food, the cleanliness of the air, the condition of your health. Businesses are not judged by what they contribute to society but rather by their profitability, which is often at the expense of society. Movies are measured by box office receipts.
The social democracies of Northern Europe are consistently rated as having the happiest people on earth. They use money as a tool to serve this purpose and would serve as a good model.
We don't need competition, we need cooperation. Do you step on somebody to reach higher, or do you reach down and help lift someone up?
Agree. The total factor productivity models used by econ and government stats agencies are negligently and willfully blind in discriminating quality and quantity based on transaction value. I don't know how to fix it. So much goes un measured internally and externally in a transaction, it's hard to know what to do though without being arbitrary. A lack of regulatory harmony between trading adversaries like EU and China and US are absolutely inexcusable because it certainly produces perverse incentives to cheat one another.
The MMTers are “right” in the sense that yes, modern governments that issue fiat currency need never default on their bonds. But they are wrong if they think this observation absolves Alexandria Ocasio-Cortez from explaining how she will pay for the Green New Deal. The printing press doesn’t create real resources, it only obscures the method by which the government siphons them away from the private sector.
ReplyDelete"Tis but a scratch", says Tom "Black Knight" Hickey.
Are you seriously denying that Austrians have noted for decades that a government could emit and/or spend as much fiat funny money as it wanted in lieu of taxation?
Also, I've noted here since 2011 that your policy proposals do not follow from your BIG INSIGHT (which is not new or previously unknown).
Corrected link:
ReplyDeletehttps://www.zerohedge.com/news/2019-02-26/mmt-even-more-dubious-aocs-green-new-deal
The idiot author (one Robert Murphy) says that any Green New Deal would have to be paid for with massive tax increases, since the US government runs on taxes. He says the AOC’s references to MMT are a “cop out.” He says MMT is correct, but it’s wrong because it’s not new. He admits that the US government can create infinite money, yet he clings to the question of “How will you pay for it?”
It's so stupid that Roddis finds it inspiring.
No, "Konrad", I find you inspiring. No one said "that any Green New Deal would have to be paid for with massive tax increases, since the US government runs on taxes."
ReplyDeleteWhat Murphy said was. "The printing press {or electronic computer generated fiat money} doesn’t create real resources, it only obscures the method by which the government siphons them away from the private sector."
Since that is demonstrably true and one of the many fatal flaws of MMT proposals, it must be mocked or ignored. Your anticipated inability to engage it inspires me.
Actually, what Murphy said was "the government has three ways of financing its spending, namely (1) taxes, (2) borrowing, or (3) inflation"
ReplyDeleteIn other words the government is utterly unable to create money. MORON ALERT
No wonder Roddis likes him.
Today Rep. Pramila Jayapal (D-Wash.) will introduce her Medicare for All Act of 2019.
ReplyDeleteMMT neutralizes the “How will you pay for it” ruse. This is why so many morons are attacking MMT.
Idiot Roddis says there are “no real resources” to spend federal dollars on. There are no doctors, hospitals, or clinics. No goods or services.
In other words, ”ZIMBABWE!”
People across the USA are literally dying because they can't afford insulin or the cancer treatment they need. Why? The USA is the only major country that does not guarantee healthcare to our residents. Why?
Because of idiots like Roddis shouting, ”ZIMBABWE!”
In other words the government is utterly unable to create money. MORON ALERT
ReplyDelete"Noah Way" is lying. He is unable to engage the argument because there is no evidence that either Murphy or I or any Austrian has claimed that the government is unable to create money. The use of the term "inflation" is meant to concede that the government can create money to obtain resources. Murphy gives example after example of famous Austrians acknowledging for decades that the government has this ability if it wants it. In fact, I thought Murphy overdid it. I guess I was wrong since you numbnuts still missed the argument. On purpose?
Idiot Roddis says there are “no real resources” to spend federal dollars on. There are no doctors, hospitals, or clinics. No goods or services.
"Konrad" is lying. I never said there were "no real resources". What I said and what Murphy said was, "The printing press {or electronic computer generated fiat money} doesn’t create real resources, it only obscures the method by which the government siphons them away from the private sector."
Because that is THE fatal flaw in MMT proposals, MMTers cannot and dare not engage it and must distort the arguments of the people who point it out. Also, MMTers seem compelled to act like 4th graders and call their critics pathetic names while ignoring counter arguments
Roddis is cute when he's mad.
ReplyDeleteAustrian "philosophy":
ReplyDeleteAll resources belong to the private sector.
Government has no right to interfere with the private sector.
The government may not use violence (taxes) against the private sector.
By direct inference, the government has no right to protect citizens (the "public sector"). Therefore government should be abolished so that the private sector can lie, cheat, steal, and murder without restriction, as is being done right now without MMT.
What I said and what Murphy said was, "The printing press {or electronic computer generated fiat money} doesn’t create real resources, Bob Roddis
ReplyDeleteNor does lazy, risk-free fiat hoarding beyond legitimate liquidity needs.
it only obscures the method by which the government siphons them away from the private sector." Bob Roddis
The government-privileged usury cartel drives business, State and local governments and the population into debt but does not provide the required interest except as more debt (except for the little they recycle into the economy via consumption).
Fiat creation can provide that interest.
Do you object to people, etc. being able to pay their debts, Bob?
Given that money is an inter-mediating commodity that provides a connecting relationship to real resources there was always going to be an issue of either the private sector clearing banks or government or both creating too much money relative to the real resources and so means of rapidly withdrawing the excess is needed to prevent abnormal inflation.Of course those who extract "rent" from lending money to government are going to fight tooth and nail pretending the mechanism for giving money credibility is not available to government. Such a belief is beyond stupidity it's purely venal.
ReplyDeleteThe whole idea of fiscal space is that government is creating funny money to fill the gap created by saving desires. The arguments should be over the priorities and productivity of that spending not the terminology. MMT is only possible because people tend to hoard money. The entire proposition is that it's possible to spend more WITHOUT causing ANYANY additio inflation. Obviously, not strictly true because government tends to spend in hot areas and hoard the skilled labor in shortest supply while refusing to hire and train those most in need, but none the less, the ideology and theory, while superficially revolting as Roddis always points out, is what it is. Ugly or not, it should work as long as wacky progressives don't completely destroy productivity.
ReplyDelete"The arguments should be over the priorities and productivity of that spending"
ReplyDeleteYes.
"MMT is only possible because people tend to hoard money"
No. What does money hoarding (and let's be clear here, it is the < 1% that is hoarding money) have to do with making MMT possible?
"government tends to spend in hot areas and hoard the skilled labor in shortest supply while refusing to hire and train those most in need"
Government spends in areas that reward and benefit the donor class (< 1%). Hoarding labor? Hahaha - private industry pays better, unless you're a politician and ride both horses.
Now define "productivity". Is it human and environmental health or how much money you can squeeze out of anything (especially money)?
Fiscal space and unemployment are typically caused by savings and import leakages. Other real and financial causes too but for monetary purposes, those are the big issues caused by the system itself.
ReplyDeleteBy increasing productivity I generally mean using fewer inputs to produce a unit of output. And vice versa.
Noah
ReplyDeleteYou have to consider not just govt employees but also private sector people doing work for the govt. When the govt wants a project done often times they "hoard" private sector workers for their projects by overpaying. A guy who used to do a lot of work on my home in Ga got to do some govt contract work at times and it was well worth his while to drive 10-12 hrs and hire guys closer to where the project was, even if just for a week or two of work. So the govt gets their stuff done in front of private sector projects when they want to by dangling big carrots. Funny enough a lot of these guys are anti "big govt" but they sure don't complain when the gravy train rides through their living room. This is how we get the proverbial 400$ toilet seats.
It doesn't always involve small guys like the above story but usually involves someone connected to the donor class as you say. Dont get me started on "productivity", a simple cut in wages by a few percent that doesn't decrease your output is magically an increase in productivity!! No ones done anything special or innovative.
,
The government is the biggest employer, directly or indirectly, and yes, you don't here those who benefit screaming SOCIALISM! That was not the point. I was referring to policy that benefits a specific class. Bigger picture.
ReplyDelete"Fiscal space and unemployment are typically caused by savings and import leakages."
Bullshit, they are caused by policy choices.
"using fewer inputs to produce a unit of output"
Like commodities trading, buying up a company then breaking it up and selling off the parts, Ponzi schemes, criminal accounting, monopolization, bribery, fraud, tax avoidance, reduced labor costs, etc. Productivity is up! Woo Hoo!
"Bullshit, they are caused by policy choices." "Like commodities trading, buying up a company then breaking it up and selling off the parts, Ponzi schemes, criminal accounting, monopolization, bribery, fraud, tax avoidance, reduced labor costs, etc. Productivity is up! Woo Hoo!"
ReplyDeleteWhat is that all about? Do you need to vent some frustration with the financial system? Go on then. I'll put the kettle on. Tell us how you would fix the economy.
The problem is a bad value system. Money is the measure of everything, but the only thing that money really measures is itself. It does not measure the quality of your food, the cleanliness of the air, the condition of your health. Businesses are not judged by what they contribute to society but rather by their profitability, which is often at the expense of society. Movies are measured by box office receipts.
ReplyDeleteThe social democracies of Northern Europe are consistently rated as having the happiest people on earth. They use money as a tool to serve this purpose and would serve as a good model.
We don't need competition, we need cooperation. Do you step on somebody to reach higher, or do you reach down and help lift someone up?
Agree. The total factor productivity models used by econ and government stats agencies are negligently and willfully blind in discriminating quality and quantity based on transaction value. I don't know how to fix it. So much goes un measured internally and externally in a transaction, it's hard to know what to do though without being arbitrary. A lack of regulatory harmony between trading adversaries like EU and China and US are absolutely inexcusable because it certainly produces perverse incentives to cheat one another.
ReplyDelete