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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Sunday, September 3, 2023
Amazon is promoting the eBook version of The Deficit Myth. A one-day promotion @ $3.99
I glanced at some of the negative reviews of Kelton’s book. As always the naysayers don’t like to admit that they have stupidly believed lies, so they make false assumptions in order to defend the lies.
Example: “MMT claims that we can create and spend whatever we like without fear of inflation.”
Wrong. No MMT expositor has ever dismissed the role of inflation, or politics, or international trade balances. MMT simply says that sovereign currency issuers do not have the same kinds of constraints that non-currency issues have. This does not mean that sovereign currency issuers need not worry about inflation.
For example, during the world wars the U.S. government created all the money it needed out of thin air. (The “gold standard” was a political gimmick that no government ever really adhered to.) During the wars, the excess dollars in circulation, combined with the scarcity of consumer goods caused by rationing, created a threat of inflation. So the U.S. government needed to remove dollars from circulation once the dollars had been spent. To do this, the US government encouraged people to buy “war bonds,” and falsely told people that these “war bonds” and “liberty bonds” were needed to “fund the war.” In addition, during WW II the US government also instituted the federal withholding tax, again telling the peasants (falsely) that federal tax revenues were needed to “fund the war.”
In reality the bonds and taxes were never needed to “fund the war.” Their function was to control inflation. The average peasant did not understand inflation, but he understood the need to “fund the war.” Therefore the lie worked. Inflation was controlled.
So yes, the potential for inflation must always be taken into account. MMT correctly says that inflation only arises if the money supply outraces the production and consumption of goods and services. Or outraces the availability of goods and services.
Other MMT naysayers dismiss reality by calling MMT “communist” or “part of the Great Reset.” Again, they don’t like to admit that they have STUPIDLY BELIEVED LIES, so they angrily spout labels and buzzwords.
“MMT is Marxist! I win!” “There is no free lunch!” I win!” “MMT is a fantasy! There, I win!” “MMT is fringe economics! I win!” “MMT is overly simplistic and deeply flawed! I win!” “MMT says the national debt is not a crisis. You might as well claim that gravity does not exist! I win!”
Same idiocy, over and over.
And these "geniuses" wonder why they remain peasants.
"MMT correctly says that inflation only arises if the money supply outraces the production and consumption of goods and services. "
That's incorrect.
What MMT says is that when the *transaction flow* outraces the production of goods and services.
We can run the entire economy with a single $10 bill if we want. We just have to make it go around fast enough and ensure nobody saves it.
Money supply is a monetarist obsession. There is no 'spending coin' and 'saving coin' just a variable amount of liabilities and credit of various types all of which get swapped around in settlement.
“We can run the entire economy with a single $10 bill if we want. We just have to make it go around fast enough and ensure nobody saves it.”
Not if there is little or nothing to spend $10 on. My point was that inflation is usually a product of the ratio between (1) the supply / velocity of money and (2) the availability of goods and services.
If there is an imbalance between #1 and #2, there is inflation or deflation.
Hyperinflation is a separate phenomenon, usually caused when a nation is attacked in one way or another by one or more other nations. For example, Weimar Germany’s hyperinflation was caused when the Allies saddled Germany with odious demands for “war reparations.”
“ MMT claims that we can create and spend whatever we like without fear of inflation.” Wrong. No MMT expositor has ever dismissed the role of inflation, or politics, or international trade balances.”
They could be making that case right now but we are under Democrat policy so they won’t point this out…
So people are right to think that … as nothing but crickets from the MMT people on the current “inflation” and it’s causes…
I glanced at some of the negative reviews of Kelton’s book. As always the naysayers don’t like to admit that they have stupidly believed lies, so they make false assumptions in order to defend the lies.
ReplyDeleteExample: “MMT claims that we can create and spend whatever we like without fear of inflation.”
Wrong. No MMT expositor has ever dismissed the role of inflation, or politics, or international trade balances. MMT simply says that sovereign currency issuers do not have the same kinds of constraints that non-currency issues have. This does not mean that sovereign currency issuers need not worry about inflation.
For example, during the world wars the U.S. government created all the money it needed out of thin air. (The “gold standard” was a political gimmick that no government ever really adhered to.) During the wars, the excess dollars in circulation, combined with the scarcity of consumer goods caused by rationing, created a threat of inflation. So the U.S. government needed to remove dollars from circulation once the dollars had been spent. To do this, the US government encouraged people to buy “war bonds,” and falsely told people that these “war bonds” and “liberty bonds” were needed to “fund the war.” In addition, during WW II the US government also instituted the federal withholding tax, again telling the peasants (falsely) that federal tax revenues were needed to “fund the war.”
In reality the bonds and taxes were never needed to “fund the war.” Their function was to control inflation. The average peasant did not understand inflation, but he understood the need to “fund the war.” Therefore the lie worked. Inflation was controlled.
So yes, the potential for inflation must always be taken into account. MMT correctly says that inflation only arises if the money supply outraces the production and consumption of goods and services. Or outraces the availability of goods and services.
Other MMT naysayers dismiss reality by calling MMT “communist” or “part of the Great Reset.” Again, they don’t like to admit that they have STUPIDLY BELIEVED LIES, so they angrily spout labels and buzzwords.
“MMT is Marxist! I win!”
“There is no free lunch!” I win!”
“MMT is a fantasy! There, I win!”
“MMT is fringe economics! I win!”
“MMT is overly simplistic and deeply flawed! I win!”
“MMT says the national debt is not a crisis. You might as well claim that gravity does not exist! I win!”
Same idiocy, over and over.
And these "geniuses" wonder why they remain peasants.
Those "geniuses" are well-paid pundits. Those who parrot what pundits say are peasants.
ReplyDelete"MMT correctly says that inflation only arises if the money supply outraces the production and consumption of goods and services. "
ReplyDeleteThat's incorrect.
What MMT says is that when the *transaction flow* outraces the production of goods and services.
We can run the entire economy with a single $10 bill if we want. We just have to make it go around fast enough and ensure nobody saves it.
Money supply is a monetarist obsession. There is no 'spending coin' and 'saving coin' just a variable amount of liabilities and credit of various types all of which get swapped around in settlement.
“We can run the entire economy with a single $10 bill if we want. We just have to make it go around fast enough and ensure nobody saves it.”
ReplyDeleteNot if there is little or nothing to spend $10 on. My point was that inflation is usually a product of the ratio between (1) the supply / velocity of money and (2) the availability of goods and services.
If there is an imbalance between #1 and #2, there is inflation or deflation.
Hyperinflation is a separate phenomenon, usually caused when a nation is attacked in one way or another by one or more other nations. For example, Weimar Germany’s hyperinflation was caused when the Allies saddled Germany with odious demands for “war reparations.”
"Money supply is a monetarist obsession"
ReplyDelete100%
John Bolton says that if you don’t like the U.S. government, or any part of it, then you are controlled by China.
ReplyDeleteHe says that China controls U.S. public opinion “without letting anybody know they’re doing it.”
He says that China seeks to “fragment us politically.”
Whatever problems or disagreements people have in the USA, “China did it.”
https://nypost.com/2023/09/03/john-bolton-says-china-engaged-in-asymmetric-warfare/
At age 74, Bolton's dementia is more severe than ever.
In the case of Bolton, it's rabies.
ReplyDelete“ MMT claims that we can create and spend whatever we like without fear of inflation.” Wrong. No MMT expositor has ever dismissed the role of inflation, or politics, or international trade balances.”
ReplyDeleteThey could be making that case right now but we are under Democrat policy so they won’t point this out…
So people are right to think that … as nothing but crickets from the MMT people on the current “inflation” and it’s causes…
btw baby back ribs at COSTCO yesterday $2.79/lb I remember paying $3.99 years before Covid,,,
ReplyDeleteHow is that Art degree figure of speech “inflation!” ?
The price is LESS…. 🤔
“ ensure nobody saves it.”
ReplyDeleteRight ie a fiscal balance….
Well, hot dayum! I almost totally agree with Konrad's first post. PP corrected the part he got wrong. Whew...
ReplyDelete