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Monday, June 5, 2023

Debt Ceiling

 

Art degree moron fest finally over… Now let’s see what happens…



 Consensus is bearish on the imminent Art degree figure of speech “liquidity drain!”…








14 comments:

  1. A tomato is not a vegetable.

    Public debt is not debt.

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  2. “…has given the Treasury Department the green light to resume net new debt issuance.”

    So the Treasury Department issues the debt, huh? So the “national debt crisis” and “debt ceiling crisis” is totally fake.

    I’ve explained the following item on many different blogs over the years. No one EVER wants to hear the truth. People would rather champion their own fuzzy and erroneous hypotheses. Mike Norman’s blog is the only place whose visitors have any intelligence.

    Here’s the deal…

    When you leave an agreed-to amount of money in a bank for an agreed-to amount of time, for an agreed-to rate of interest, you can get a certificate of deposit from the bank. Your money is on loan to the bank. Your money is owed to you. Your is in debt to you.

    The exact same thing happens when you buy a Treasury security. You leave an agreed-to amount of money in a federally-connected bank for an agreed-to amount of time, for an agreed-to rate of interest. A certificate of deposit from a Fed-connected bank is called a Treasury security. Your money is on loan to the bank. Your bank owes you that money. It is in debt to you.

    This is the “national debt.” It is money on loan to (i.e. deposited with) the Fed, not to the U.S. government.

    The U.S. government does not borrow any money in order to pay its bills. The U.S. government pays its bills with money created out of thin air.

    Federal laws say that the U.S. Treasury must sell enough Treasury securities to cover the federal deficit in a given fiscal year. This is a formality, a game of accounting sleight-of-hand. If the Treasury does not sell enough securities to cover the federal deficit, then the Federal Reserve “buys” the securities (i.e. zeroes them out). The “debt ceiling” is an arbitrary limit set on the amount of Treasury securities that can be sold. The US Congress can impose this arbitrary limit or remove it at will.

    It’s all a silly ritual. There is no chance of the U.S. government “defaulting,” since the U.S. government creates infinite money out of thin air. The media outlets pretend that there is a “crisis” in order to get views. It is click-bait.

    Trump exposed this charade on 9 May 2016...

    “People said I want to go and buy debt and default on debt, and I mean, these people are crazy. This is the United States government. You never have to default because you print the money, I hate to tell you, OK?”

    https://www.cnn.com/2016/05/09/politics/donald-trump-national-debt-strategy/index.html

    Trump’s honesty caused the media and the political establishment to have a seizure. “He spoke the truth! Truth is blasphemy!"

    In Sep 2018 Bob Woodward published a book-length attack on Trump titled Fear: Trump and the White House. In it Woodward noted that Trump said, “You just print the money.” Woodward pretended that Trump had lied, and that this was some kind of hidden scandal.

    MY POINT is that no one wants to hear these simple truths, except maybe the people here on Mike Norman’s blog. Most people would rather cling to myths, hoaxes, make-believe “crises, silly rituals, and outright lies.

    This happens to every civilization. Society’s b.s. forms a bubble that expands until it pops, whereon the civilization collapses.

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  3. Indeed.
    Even the fanatical belief in vaccines is no match for debt zealots.

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  4. “” No one EVER wants to hear the truth. People would rather champion their own fuzzy and erroneous hypotheses.”

    It’s their truth.. they think YOU are lying… and they are NOT hypotheses they are theses…

    It’s Modern Monetary THEORY…. NOT Modern Monetary HYPOTHESIS….

    It’s Monetarist THEORY …. NOT Monetarist HYPOTHESIS…

    Quantity THEORY of Money … NOT Quantity HYPOTHESIS of Money…

    “ Most people would rather cling to myths, hoaxes, make-believe “crises, silly rituals, and outright lies. ”

    That’s what they say YOU are doing…

    This is the Liberal Art methodology….

    It is competing THEORIES that are discussed and debated via dialogue with one Theory becoming dominant ….

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  5. Nobody technically competent is trained under it or uses it…

    It was abandoned by the technical community and replaced by the Scientific Method in 1860 when the Science Degree was established…

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  6. We should ban all of these people….

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  7. Move Accounting into STEM. Upon which it'll be known as STEAM.

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  8. @ Matt Franko: I call them hypotheses because they are guesses by “art degree” morons, who think that their guesses are Ultimate Truths. They get silly ideas in their heads, and they will never let them go.

    Meanwhile I regard a theory as a nexus of logic based on established facts that can be empirically observed, tested, and measured. For example we use the theory of aerodynamics to design aircraft. There are theories of hydrodynamics, thermodynamics, probability theory, information theory, music theory, the theory of gravitation, etc etc. This is true science.

    Modern Monetary Theory has enough facts to qualify as a theory, although some MMT people have fuzzy ideas about a “jobs guarantee,” which I ignore.

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  9. Hypotheses are testable … Theses are not testable…

    Darwin’s Theory of Evolution, the Big Bang Theory, etc..,

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  10. Joe wants to test the Big Bang Theory with Putin...

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  11. The Job Guarantee is central to Modern Monetary Theory. If you don't understand what it does (shift the stabilisation policy from the market for money to the market for labour) you haven't understood what MMT is actually saying.

    The JG 'fixes the bug' in conventional Keynesian Theory. The Job Guarantee solves the ‘missing equation’ problem of macroeconomics and is core to what we call MMT.


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  12. @ NeilW

    Exactly.

    Those who don't get this miss the systemic connection between finance and economics and therefore believe in all sorts of stuff like the neutrality of money.

    "Money" without a real anchor (like labor time or some commodity like energy or metal) is disconnected from the economy (production, distribution, and consumption - capital goods, land and labor).

    Many so-called sound finance advocates even believe that a real resource (commodity) like gold is "real money." This includes some on both right ("goldbugs") and left (orthodox Marxists). Marxists above all should get it since it restores the connection among finance (prices), commodity production (costs), and work (labor time).

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  13. Difference is that you can't horde labour like you can with metal. Also much more efficient in controlling inflation by creating more supply than forcing people to not spend.

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  14. @Neil Wilson and Tom Hickey,
    It is ludicrous to suggest that inlation can be “anchored” by fixing the “wages” of a few otherwise unemployed “workers” on JG schemes.
    .
    1. The proposed JG wage is not fixed. It is supposed to be a “living wage”, which rises in line with inflation.
    .
    2. The government can already fix the price of many of the items which it buys.
    It fixes the wages of civil servants, military personnel, teachers in health workers in state education and health facilities, etc. Why isn’t fixing these wages already an “anchor” to control inflation?
    .
    3. Especially during periods of high demand when inflation tends to be highest, wage bargaining between most private sector employers and employees is very unlikely to be significantly influenced by the minimum wage or the JG wage paid to low paid workers.

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