And now for something completely different: Modern Monetary Theory

[KingOrfeo]

It turns many economic assumptions on their heads, and shows a way governments can assure full employment and a great deal besides.

Wikipedia:

Modern Monetary Theory (MMT or Modern Money Theory, also known as Neo-Chartalism) is a macroeconomic theory which describes and analyses modern economies in which the national currency is fiat money, established and created by the government. The key insight of MMT is that "monetarily sovereign government is the monopoly supplier of its currency and can issue currency of any denomination in physical or non-physical forms. As such the government has an unlimited capacity to pay for the things it wishes to purchase and to fulfill promised future payments, and has an unlimited ability to provide funds to the other sectors. Thus, insolvency and bankruptcy of this government is not possible. It can always pay".[1]

In sovereign financial systems, banks can create money but these "horizontal" transactions do not increase net financial assets as assets are offset by liabilities. “The balance sheet of the government does not include any domestic monetary instrument on its asset side; it owns no money. All monetary instruments issued by the government are on its liability side and are created and destroyed with spending and taxing/bond offerings, respectively.”[1] In addition to deficit spending, valuation effects e.g. growth in stock price can increase net financial assets. In MMT, "vertical" money (see below) enters circulation through government spending. Taxation and its legal tender power to discharge debt establish the fiat money as currency, giving it value by creating demand for it in the form of a private tax obligation that must be met. In addition, fines, fees and licenses create demand for the currency. This can be a currency issued by the government, or a foreign currency such as the euro.[2][3] An ongoing tax obligation, in concert with private confidence and acceptance of the currency, maintains its value. Because the government can issue its own currency at will, MMT maintains that the level of taxation relative to government spending (the government's deficit spending or budget surplus) is in reality a policy tool that regulates inflation and unemployment, and not a means of funding the government's activities by itself.

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[4est_4est_Gump]

Another attempt to put Human Action into mathematical macro-certainty.

An economy is never top down. An economy is created by micro economics, individuals and companies creating and trading goods and services, none of which the government can do. I thought we learned that lesson in 2008 and 2009 when the forces of government were fully turned to the immediate recovery of the economy which only collapsed because of government tax cuts for the rich.

This theory is nuttier than rat crap in a pistachio factory. It is a theory. It is a dream of people who have never run a company. let alone an economy; it is the fantasy mental masturbation of lesser intellectuals (For a better examination of this, see Eric Hoffer's essays in The Ordeal of Change. A true intellectual has no drive to direct the lives and creativity of others. A lesser intellectual seeks self-validation in flawed worke whose only plea is to let government allow them to run the lives of others.).

 

[phrodeau]

https://www.youtube.com/watch?v=Cc7F-jnsZRE

 

[Lancecastor]

MMT?

Sounds like one of LTR's masturbation fantasies about sean

 

[magicalmoments]

Economics, seismology, vulcanology and meteorology... They're all witchcraft really.

 

[4est_4est_Gump]

MMT is just the Historical School of the Socialists of the Chair with modern terminology and is nothing more than a false validation of the State's right to simply print money and maintain constant inflation as if that were a desirable think. It looks backwards, creates formulas and then assures us that those formulas promise a utopian economic future.


To date, all of their efforts are dismal busts leading to an underscoring of why it is called "The Dismal Science."

 

[Rightguide]

...Yawn

The economic and monetarily illiterate starting another thread on economics and monetary policy. My offering is the Theory of Money and Credit, by Ludwig von Mises, the most scientifically rigorous treatise on money and credit ever penned by the human hand. Read that and then start a thread that makes real economic sense, not political sense.

 

[KingOrfeo]

My offering is the Theory of Money and Credit, by Ludwig von Mises, the most scientifically rigorous treatise on money and credit ever penned by the human hand

Von Mises was a pseudoscientific Austrian school crank.

 

[KingOrfeo]

Economics, seismology, vulcanology and meteorology... They're all witchcraft really.

 

[TheOlderGuy]

I decided some where around the age of 18 that money (and religion and monogamy) was the root of all evil. The theory has yet to disappoint.

 

[KingOrfeo]

I decided some where around the age of 18 that money (and religion and monogamy) was the root of all evil. The theory has yet to disappoint.

Well, if it is, it is a root that cannot be uprooted. Even radically Communist societies have found it necessary to use money or some functional equivalent.