Jared Bernstein, total idiot. You have to see this to believe it.

You know that scene in The Big Short, when after the collapse there's a distinct vibe of "man that was so obvious, how were people so impossibly stupid?"

If you are loaning money to the Federal Government (ie if you own government bonds), the *only* reason you should feel… https://t.co/KgutE7xeIv

— Erik Voorhees (@ErikVoorhees) May 3, 2024

Absolutely idiotic hit piece on MMT by 3 clowns at the Richmond Fed.

This is one of the worst hit pieces I have ever run across. Loaded with ridiculous strawman arguments, making claims MMT never made. A display of sheer ignorance and dogma. The authors clearly never read any of the MMT academic papers or literature. This should be a total embarrassment for the Richmond Fed or an indictment of how wedded they are to a deeply ignorant and inapplicable dogma.

Starts off with this ridiculous statement

During the past 25 years, low interest rates and highly expansionary monetary policy with little apparent inflation have created the illusion that a government can simply print money to fund exorbitant deficit spending with no repercussions. This core tenet of so-called "modern monetary theory" ignores the fact that deficit spending is constrained in the long run by a government's ability to satisfy creditors.

Satisfy creditors? "Exorbitant spending." They even start off talking about monetary policy when MMT spends little time on that, and in fact has stated how that's ineffective. MMT deals with fiscal policy space of a currency issuer. 

Even invokes the completely idiotic comparisons to Weimer Germany and Zimbabwe.

...economic history is awash with disastrous attempts to finance government spending and debt simply by printing money. These examples range from currency debasement in the Middle Ages to the hyperinflations of the 1900s (for instance, Germany in 1923, Hungary in 1946 and Zimbabwe in the 2000s). All of these examples demonstrate that MMT-flavored policies are, at the very least, poor solutions to fiscal problems.

Really, really, stupid.

There's a lot more misrepresentation, ignorance, and just plain garbage in the paper.

Read it here.

My new podcast episode is out.

My new podcast episode is out.

My new podcast is out.

My new podcast episode is out.

My new podcast episode is out

My new podcast is out.

My new podcast episode is out.

My latest podcast is out. I go after the dopey MMT critics.

Here is my latest podcast. Enjoy.

Bill Mitchell – Dear Treasurer, I have a plan for your $60 billion

On Friday, we had the extraordinary admission from our Federal government that they had overestimated the injection required to fund their wage subsidy JobKeeper program by some $A60 billion. When the overall program was announced the Treasury allocated $A133 billion to it. So now they are admitting to a 45 per cent forecasting error, which sort of dwarfs the worst errors that the IMF makes, and they sure make some bad mistakes in their projections. Whatever the reason for the mistake, the way the Treasurer has defended it is quite repugnant – claiming virtue out of the incompetence. And while all the Labor Party economists are talking about seeing the error from space, none of them picked it up or had the nous to realise that the figures didn’t add up when the Government originally released them. I am the only economist who wrote that the figures published by the Government didn’t make sense. I did that on April 29, 2020. I also wrote to the Treasury and the Treasurer requesting answers to questions that reflected my concern. They didn’t bother replying. Now everyone is wise after the fact. Anyway, the $A60 billion is a nice round figure. And I outline a plan in this blog post on exactly how the Treasurer can spend it and improve the well-being of more than a million Australians with a stroke of the pen....

Bill Mitchell – billy blog
Dear Treasurer, I have a plan for your $60 billion
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

John Quiggin — MWW on MMT (from Twitter via Spooler)

Mitchell, Wray and Watts Macroeconomics p 323, give a the correct version of the #MMT position on budget aggregates ....

John Quiggin's Blog
MWW on MMT (from Twitter via Spooler)
John Quiggin | Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government

Bill Mitchell — MMT critiques need to get more inventive – it’s getting boring

Talking points. 

The so-called MMT critics need to read more MMT in order to actually criticize MMT. They are criticizing MMT based on straw man arguments. I, too, am getting bored with plodding through it to see if anyone has come up with anything substantial. 

Without doing the necessary prep, criticism appears not only unprofessional. In this case, it also leads to the question of whether the criticism is an ideological attempt to control the narrative by influence based on supposedly "expert opinion."

MMT needs better critics. Positions grow stronger when faced with informed criticism that is constructive rather than destructive or dismissive.

The good news is that now most critics are admitting than major points of MMT are correct and seek to deflect it with spurious premises that are still widely held, mostly "inflation." MMT economists are quite nuanaced  in their analysis of inflation and how to address it should they begin building.

Bill explains some nuance.

Let me state clearly, at the outset, there may be an inflationary spike coming out of this diabolical mess....

Bill Mitchell – billy blog
MMT critiques need to get more inventive – it’s getting boring
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell – A Job Guarantee would require $A26.5 billion net to reduce the unemployment rate by 6 percentage points

When Kevin Rudd was faced with the threat posed by the unfolding GFC in late 2008 his government became very pragmatic and immediately ditched the narrative they had been pushing out throughout that year about inflation being a threat and the need for tighter fiscal policy and surpluses. They introduced, in two rounds, a fairly significant fiscal stimulus (around 4.2 per cent of GDP) which effectively saved the Australian economy from entering a recession. A significant part of that intervention was that it had various temporal properties – a cash handout in December 2008 designed to get spending power into the hands of consumers just before Xmas (the famous ‘flat screen’ payment – there were a lot of TVs purchased), which obviously was an immediate focus, and, a longer term component, which included their plan to put insulation into every home. This was aimed at job creation clearly, to address the cyclical needs, but, it was also intended to address the longer term climate crisis, that were beyond the GFC cycle. When appraising what government’s should be doing now – to deal with the socio-economic consequences of the medical crisis – that style of thinking is essential. The questions that need to be asked are: 1. What can be done now to avert an economic collapse? 2. What do we want to change about the pre-structure of the economy into the future? 3. How can we use the stimulus intervention to make those changes, while addressing Question 1. In this blog post, I go through some of that style of thinking. I also provide some specific estimates of the investment needed to introduce a Job Guarantee in Australia....

Bill Mitchell – billy blog
A Job Guarantee would require $A26.5 billion net to reduce the unemployment rate by 6 percentage points
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

COVID-19 debt crisis: Is Modern Monetary Theory a solution? — Neville Spencer

At least some on the left are taking cognizance of MMT, but if this author is any indication, more study is required to understand what MMT is and what it is not. But at least it is a try.

Green Left
COVID-19 debt crisis: Is Modern Monetary Theory a solution?

Neville Spencer

Bill Mitchell – JobKeeper wage subsidy – some strange arithmetic is afoot

It is Wednesday so music and some snippets. I have updated the US unemployment claims data with a new map and state table. Shocking. We are working on updated estimates of what the Australian government would need to invest to run a Job Guarantee. We haven’t done that for a while because I didn’t want the press to get obsessed with dollar amounts. But as I am currently talking a lot about the Job Guarantee in the media, I thought some numbers would be useful as a comparative exercise against the JobKeeper wage subsidy, which is the central stimulus plank of the Australian government. The current estimates suggest that to create around 685 thousand jobs might require an outlay of $34 billion over the course of a year. That got me thinking. The main response of the Australian government is the $A133 billion over 6 months JobKeeper wage subsidy scheme. The Treasury claims it will be the difference between an unemployment rate of 10 per cent and 15 per cent. That difference is 685 thousand jobs. Then start doing some division and multiplication and you start to see that this doesn’t make sense as I explain below....

Bill Mitchell – billy blog
JobKeeper wage subsidy – some strange arithmetic is afoot
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Why MMT? A discussion with Warren Mosler — Richard Murphy

Warren is amazing in his ability to cut to the quick in a sentence or two.

Tax Research UK
Why MMT? A discussion with Warren Mosler
Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum

Bill Mitchell – Bank of England official blows the cover on mainstream macroeconomics

It is quite amusing really watching the way orthodox economists who know the game is up work like gymnasts to avoid actually spelling out directly what the facts are but spill the beans anyway. Last week (April 23, 2020), an ‘external member’ of the Bank of England’s Monetary Policy Committee, one – Gertjan Vlieghe – gave a speech – Monetary policy and the Bank of England’s balance sheet. If the message was taken seriously, then the way monetary economics and macroeconomics is taught in our universities should change dramatically. At present, there is only one textbook that seriously caters for the message that is inherent in the speech – Macroeconomics (Mitchell, Wray and Watts). The speech leaves out important insights but essentially allows the reader to appreciate what Modern Monetary Theory (MMT) has been on about, in part, for 25 years.

Bill Mitchell – billy blog
Bank of England official blows the cover on mainstream macroeconomics
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Progressives should never work within the mainstream macroeconomics straitjacket — Bill Mitchell

There was an interesting article posted on Alternet (April 12, 2020) – Leftist policy didn’t lose. Marxist electoral theory did – in response to the dismal showing by Bernie Sanders in the current Democratic Primaries. I think it summarises the confusion that is now abundant on the progressive side of the political struggle. The arguments presented highlight the dilemma facing the progressive side of politics. Should Leftists compromise with centrists to get more traction? Compromise with what? If you read between the lines, there is no argument being made for Leftists to challenge the basic macroeconomic myths of neoliberalism that social democratic politicians around the world have adopted and straitjacket by. Rather, Leftists should accept these constraints and work at local levels to make small gains for better housing etc. It is a defeatist agenda – a surrender to the main game. I reject it....

Bill Mitchell – billy blog

Progressives should never work within the mainstream macroeconomics straitjacket
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

The Myth of “Helicopter Money” Yeva Nersisyan and L. Randall Wray

More free publicity for MMT.

Project Syndicate
The Myth of “Helicopter Money”
Yeva Nersisyan and  L. Randall Wray