You can see how Treasury issuance has been exceeding non-govt savings (ofc unqualified call this “the debt!”) starting last year after shutdown policy was implemented and still being maintained at > $1T...
And it has largely been accomplished by increasing issuance of bills...
So govt has been forcing the non-govt to save in an additional $1T + balance of short-term Treasury Bills that the non-govt neither wants or needs... hence longer dated US bond prices are suffering...
6 comments:
The MMT fraud in slow motion, so that even economists can get it
Comment on Matt Franko on ‘Treasury issuance’
The macroeconomic 4-sector Profit Law reads Q≡(G−T)+(I−S)+(X−M)+Yd. Let us reduce it to 3 sectors (household, business, government, and Yd=0, I=0), i.e. to Q≡(G−T)−S. In plain language it now says: The profit of the business sector Q is equal to the government's budget deficit (G−T)>0 minus the household sector's saving S.
So, if the budget deficit (G−T) increases and household sector saving S remains unchanged the business sector's profit Q increases by the same amount. The Profit Law implies Public Deficit = Private Profit. That's pretty straightforward. So, what can be expected from the increased deficit-spending/money-creation that has been started by Mr. Trump and is continued by Mr. Biden is a profit explosion subject to the secondary condition that household sector saving S and the foreign trade balance (X−M) remain fairly stable.#1
The business sector can hold the increased monetary profit as cash/deposit or buy interest-bearing bills/notes/bonds. Figure 6 shows how every single item increased in 2020.
Matt Franko comments: “You can see how Treasury issuance has been exceeding non-govt savings (ofc unqualified call this “the debt!”) starting last year after shutdown policy was implemented and still being maintained at > $1T... And it has largely been accomplished by increasing issuance of bills... So govt has been forcing the non-govt to save in an additional $1T + balance of short-term Treasury Bills that the non-govt neither wants or needs.”
The peculiarity of Matt Franko's comment consists of the fact that he does NOT differentiate between household sector and business sector but talks of the non-government sector and that he does not differentiate between household sector saving and business sector profit. The business sector vanishes, three sectors are reduced to two: gov and non-gov.
In formal terms, Matt Franko takes the Profit Law Q≡(G−T)−S and rewrites it as Q+S=(G−T) and calls the left part (Q+S) non-government saving. Thus, the business sector and profit vanish and he ends up with the MMT slogan Public Deficit = Non-Government Saving or as Stephanie Kelton is wont to say: The government’s ‘red ink’ becomes our ‘black ink’. What people always overlook is that “our” does not mean WeThePeople but WeTheOligarchy.#2
The false We/Our and the rewriting of the Profit Law are the semantic and formal tricks that MMTers use to deceive WeThePeople. The rest of the economics profession is either too stupid to check the fraud or complicit.#3
Egmont Kakarot-Handtke
#1 Keynes, Lerner, MMT, Trump, etc. and exploding profit
https://axecorg.blogspot.com/2017/12/keynes-lerner-mmt-trump-and-exploding.html
#2 Stephanie Kelton’s legendary Plain-Sight-Ink-Trick
https://axecorg.blogspot.com/2019/01/stephanie-keltons-legendary-plain-sight.html
#3 Look, how they jump on the deficit/profit bandwagon
https://axecorg.blogspot.com/2021/02/occasional-tweets-210210b-look-how-jump.html
In system analysis, you can measure the time domain response across any node in the system...
iow it’s not that one has to measure response only at one node on the system...
I could do this same cash basis analysis for an individual household or an individual person, individual firm, etc.. in addition to across multiple nodes which form a sector...
Everyone already knows that business makes bazillions of USDs all the time it’s not unique or interesting ...
I understand your analysis that business sector makes tons of munnie ... no problem... I just don’t think it’s interesting everyone already studies that ... this is what you learn in MBA degree programs we graduate 1000s of them every year...
FD I’m not a commie I could care less how much munnie business sector makes or all of your commie “class!” bullshit..... I’ve never studied it, am not interested in it , can’t give a shit about it, and think those who do possess a deficiency of intelligence.... they can’t cut it technically..
as long as businesses are allowed to make enough munnie to get the real production done which they usually do.. unless moron unqualified incompetent Art degree govt policy makers make a big technical policy error.. analysis of these errors are what I am interested in...
S&P 500 firms make like 1.2T per year... they payout half of that in dividends, 30% is used for capex.. and 20% is retained earnings...roundabout +/-... everyone already knows this... they are public companies and have to disclose...
Duh.... WHO TF CARES? They do this every year... so what? Why do you get your panties all in a bind over this?
Nobody cares until the guillotines start slicing.
Matt Franko
You say: “Everyone already knows that business makes bazillions of USDs all the time it’s not unique or interesting ...”
Agree, but why then does profit Q (= balance of the business sector) not appear in the MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0? *
Could it be that then even the blind could immediately see that Public Deficit = Private Profit and that MMTers are NOT the nice-progressive-humanitarian-righteous champions for WeThePeople but rather the rotten-mendacious-stupid-corrupt agenda pushers for the Oligarchy?
Egmont Kakarot-Handtke
* Google pics
https://2.bp.blogspot.com/-GNP9h-5i8vg/WkgM57Ijq8I/AAAAAAAABqw/7pJteihxsDMl95nX-Oha1P9V2gr_iSGnwCLcBGAs/s1600/MMT%2BWarren_Matt_Washington_Sectoral_Balances.gif
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