Friday, February 19, 2021

Yet Another Strawman Attack On MMT — Brian Romanchuk

The number of bad takes on MMT have slowed down, but they are still arriving. I have a section on MMT critiques in my manuscript (the formatting of which I am supposed to be finishing off instead of ranting), but we have yet another data point to back my assertion that it is not worth responding to most MMT critiques, since they are terrible.

Yesterday on Twitter I was "entertained" by a thread which contained the following assertion*:
* "But MMT ran with it: central banks could "print money" to pay for any amount of spending. At the limit, they had a motto: there is no constraint on how much the government can spend. This is an absurd limit, wrong and backwards: CB reserves are just another form of borrowing."…
Bond Economics
Yet Another Strawman Attack On MMT
Brian Romanchuk


Andrew Anderson said...

"wrong and backwards: CB reserves are just another form of borrowing." Ricardo Reis

Sounds like Gold Standard thinking where banks might have once been thought to lend their gold reserves to the Central Bank and when gold was thought to back fiat rather than the correct view that fiat needs no other backing - being backed by the taxation authority and power of government.

It is bogus however that the Central Bank is allowed to create fiat for special interests such as for the banks and asset owners and not just for the general welfare.

Andrew Anderson said...

And far from "borrowing" gold reserves from private banks, the Central Bank was actually creating fiat (CB liabilities) for the banks in exchange for their gold. But that's fiat creation for private interests and thus violates equal protection under the law.

Matt Franko said...

Really the best thing that could happen right now (as far as these monetarist people... chaos aside...) is for Reserves to skyrocket up over $4T in the next few weeks and then the whole thing crashes...