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[Snowman Prophet of Doom]

The difference is cash vs bonds and their effect on the velocity of money. We are talking about inflation, demand is a part of inflation. Yes the bond plus payments has a greater value than the cash itself, but securities are not money.

As I said, though, even if the money seems more immediately inflationary, the fact that it may be a more efficient way of stimulating economic activity and access to resources may counterbalance that effect. Note that I say may.

This is one of the main problems of economics as a science - human actors do not behave uniformly nor predictably, as one might expect atoms to. Yet, one might argue this is a strength of chartalism and why it is not on the same level as Austrian Economics, even if wrong - it focuses on accounting, rather than the unpredictability of individual behavior.

 

[empty vessel]

Whether the $100 is paid back that year or in the future, there is more than $100 in money created over time vs. $100 created now.

This seems very much like the debate re: food stamp debit cards vs. direct cash stimulus to poor families; that is, in trying to establish control, there may be inefficiencies created that we don't realize. Again, I'm not an MMT devotee, but I see and understand their points, though my main objection is I don't see government ever being efficient or honest enough to print ONLY as much money as is needed and to distribute said money in a non-corrupt way.

But all money already is printed, so I don't understand your objection. The changes I am proposing aren't about whether to print money or not print money. We have a fiat monetary system. That is a fact. All money is "printed." We are only debating about the mechanics of injecting additional "printed" money into the economy, and frankly not even that. A bond is "printed" interest-bearing money. The moment that the Treasury issues a bond, it has printed and spent that money into the economy. It is Congress that determines how much money is "printed" and how it will be spent when it passes a budget and a tax code. The only thing I am proposing is changing the law that requires the government to print money via bonds rather than printing it via keystrokes. (Ultimately, even in the system we have now, bonds eventually turn into keystrokes when the Fed purchases them.)

The ultimate point in all of this, however, is that the government possesses the black box. It has no need of creditors or lenders. And this should be plainly obvious. Anybody who is opposed to direct government spending has to explain the benefit of a law that artificially (and arbitrarily) constrains the government by requiring it to sell bonds in an amount matching its net spending when doing so is plainly unnecessary to its spending the amount that Congress has required it to spend.

 

[Dan]

I assume everybody has seen this by now?

http://www.youtube.com/watch?v=0Jd-iaYLO1A

What the fuck?

 

[Snowman Prophet of Doom]

But all money already is printed, so I don't understand your objection. The changes I am proposing aren't about whether to print money or not print money. We have a fiat monetary system. That is a fact. All money is "printed." We are only debating about the mechanics of injecting additional "printed" money into the economy, and frankly not even that. A bond is "printed" interest-bearing money. The moment that the Treasury issues a bond, it has printed and spent that money into the economy. It is Congress that determines how much money is "printed" and how it will be spent when it passes a budget and a tax code. The only thing I am proposing is changing the law that requires the government to print money via bonds rather than printing it via keystrokes. (Ultimately, even in the system we have now, bonds eventually turn into keystrokes when the Fed purchases them.)

The ultimate point in all of this, however, is that the government possesses the black box. It has no need of creditors or lenders. And this should be plainly obvious. Anybody who is opposed to direct government spending has to explain the benefit of a law that artificially (and arbitrarily) constrains the government by requiring it to sell bonds in an amount matching its net spending when doing so is plainly unnecessary to its spending the amount that Congress has required it to spend.

My point is that a bond, as tangible thing, has some level of accountability. Money being credited to accounts via keystrokes also seems more susceptible to various kinds of fraud, waste, and miscalculation, and as has been objected, putting inflation off into a nebulous point in the future may better allow us to control it vs. printing said money via keystrokes in the present moment.

There may also be the argument that as long as other nations do not function according to or believe in chartalist principles, even if true, the U.S. doing so may decrease the world's confidence in the dollar and harm its value relative to other currencies.

 

[commedieu]

What the fuck?

the fuck... why are we all powerless in.this Fucking country.

 

[TheHeretic]

But all money already is printed, so I don't understand your objection. The changes I am proposing aren't about whether to print money or not print money. We have a fiat monetary system. That is a fact. All money is "printed." We are only debating about the mechanics of injecting additional "printed" money into the economy, and frankly not even that. A bond is "printed" interest-bearing money. The moment that the Treasury issues a bond, it has printed and spent that money into the economy. It is Congress that determines how much money is "printed" and how it will be spent when it passes a budget and a tax code. The only thing I am proposing is changing the law that requires the government to print money via bonds rather than printing it via keystrokes. (Ultimately, even in the system we have now, bonds eventually turn into keystrokes when the Fed purchases them.)

The ultimate point in all of this, however, is that the government possesses the black box. It has no need of creditors or lenders. And this should be plainly obvious. Anybody who is opposed to direct government spending has to explain the benefit of a law that artificially (and arbitrarily) constrains the government by requiring it to sell bonds in an amount matching its net spending when doing so is plainly unnecessary to its spending the amount that Congress has required it to spend.

First, the method getting this money into the economy is critical, because there's a powerful reason Governments cannot do what you ask. You still haven't resolved my question about bonds at all or how this all doesn't just produce endless inflation.

But second is that this entire economic philosophy seems be to based on a not very convincing observation - that Governments with fiat currencies can never technically go bankrupt. But who cares? A Governments credibility and that of its currency is still judged on its asset base and its ability to reliably produce an income (taxes). It isn't some special entity that can play outside the basic economic parameters of everything else.

It can pay and tax in dollars, but the private economy can still turn to other currencies, securities or commodities to subvert this. They will still have to pay taxes, but they can pay them at the point of exchange only. You can't force people to hold or invest in the currency.

 

[Riki]

the fuck... why are we all powerless in.this Fucking country.

We aren't. We have all the power. The problem is that there are still to many people that are uninformed or completely brainwashed and vote these people in.

 

[ace3skoot]

the fuck... why are we all powerless in.this Fucking country.

your not powerless, you have just been conditioned to never use/enforce that power, your here on a forum complaining your powerless, instead of going out there, rallying people and using the power you have

 

[empty vessel]

My point is that a bond, as tangible thing, has some level of accountability. Money being credited to accounts via keystrokes also seems more susceptible to various kinds of fraud, waste, and miscalculation, and as has been objected, putting inflation off into a nebulous point in the future may better allow us to control it vs. printing said money via keystrokes in the present moment.

There may also be the argument that as long as other nations do not function according to or believe in chartalist principles, even if true, the U.S. doing so may decrease the world's confidence in the dollar and harm its value relative to other currencies.

I am still confused by this objection. What the Treasury spends money on is dictated by Congress. We are talking about how the Treasury spends money, not on what it spends money and how much it spends. Those decisions have already been made at this point in the story. The only thing I am proposing is that the mechanics of spending be changed to do directly what they now require be done indirectly. Otherwise, nothing changes. If the Congress had directed the military to buy a bomb, and the Treasury has to pay for it, there can be no fraud, waste and miscalculation in the mechanics by which the Treasury pays for it. Indeed, the indirect method of payment is the one that contains waste: namely, the interest that Congress requires be tied to deficit spending under the indirect method. Otherwise, nothing changes. Making the mechanics of payment more direct has the benefit of cutting the legs out from under the debt hawks who use it to mislead the public into supporting austerity measures that harm them and the economy.

First, the method getting this money into the economy is critical, because there's a powerful reason Governments cannot do what you ask. You still haven't resolved my question about bonds at all or how this all doesn't just produce endless inflation.

The amount of net dollar-denominated financial assets injected into the economy remains unchanged between the two methods of spending. Actually, not quite. Because the direct method of spending does not inject needless interest into the equation, so it ultimately injects less spending. So I'm afraid you're going to have to explain to me how spending less money than is currently spent is going to produce "endless inflation." The burden is on you here, as you support the more inflationary method of deficit spending and are taking a position so fundamentally opposite from all that is known about macroeconomics, i.e., that spending less somehow produces rampant inflation.

But second is that this entire economic philosophy seems be to based on a not very convincing observation - that Governments with fiat currencies can never technically go bankrupt. But who cares? A Governments credibility and that of its currency is still judged on its asset base and its ability to reliably produce an income (taxes). It isn't some special entity that can play outside the basic economic parameters of everything else.

It is indeed a special entity! It creates money. True, the power to create money does not mean that money will always have value. A government can spend so much money that it loses value relative to real goods and services (inflation). But what you seem to be missing here is that we are not having a discussion about how much to spend. Congress has already decided that. We are talking about the mechanics of how the Treasury spends the money that Congress has directed it to spend.

It can pay and tax in dollars, but the private economy can still turn to other currencies, securities or commodities to subvert this. They will still have to pay taxes, but they can pay them at the point of exchange only. You can't force people to hold or invest in the currency.

See above. If you want to have a discussion about how much net spending the government should be doing, we can have that discussion. But it isn't the one we are having (or have been having).

 

[mattiewheels]

When are the 1%'ERS going to start yanking the leash on congress? They're about to get directly affected, and I don't see scoring ideological points as a goal of theirs when they stand to take a big financial hit.

 

[Diablos]

When are the 1%'ERS going to start yanking the leash on congress? They're about to get directly affected, and I don't see scoring ideological points as a goal of theirs when they stand to take a big financial hit.

1%ers have so much money that they can stand to lose a lot. They know it too. It'll hurt, but they'll survive and then some.

 

[Keio]

When the economy tanks, the one percent can buy more for their diversified assets. And come out of the recession owning an even big proportion of everything.

 

[mattiewheels]

1%ers have so much money that they can stand to lose a lot. They know it too. It'll hurt, but they'll survive and then some.

When the economy tanks, the one percent can buy more for their diversified assets. And come out of the recession owning an even big proportion of everything.

Well God bless America, then!

 

[TheHeretic]

The amount of net dollar-denominated financial assets injected into the economy remains unchanged between the two methods of spending. Actually, not quite. Because the direct method of spending does not inject needless interest into the equation, so it ultimately injects less spending. So I'm afraid you're going to have to explain to me how spending less money than is currently spent is going to produce "endless inflation." The burden is on you here, as you support the more inflationary method of deficit spending and are taking a position so fundamentally opposite from all that is known about macroeconomics, i.e., that spending less somehow produces rampant inflation.

This is only true if bonds and cash are equally inflationary, which they aren't, not even close. If they are you'll have to explain how. The fact that the values are almost the same (the bonds have interest) doesn't change what i'm talking about. Cash is more liquid than bonds, by definition. Much more liquid.

 

[maquiladora]

When are the 1%'ERS going to start yanking the leash on congress? They're about to get directly affected, and I don't see scoring ideological points as a goal of theirs when they stand to take a big financial hit.

The government shutdown doesn't affect them at all. The fallout from a default would, and thats part of the reason why it will never happen. All thats going on now is a game to see who can win what before the inevitable deal is reached.

 

[mattiewheels]

The government shutdown doesn't affect them at all. The fallout from a default would, and thats part of the reason why it will never happen. All thats going on now is a game to see who can win what before the inevitable deal is reached.

No, I was talking about the impending default. I can only assume this is a massive game of chicken instead something that would actually put important folks' money at risk.

 

[J.ceaz]

No, I was talking about the impending default. I can only assume this is a massive game of chicken instead something that would actually put important folks' money at risk.

Yeah. A default would never happen. And that's because if a default were to happen then the one motivator of human history would rise to take (forcibly) the wealth of the 1%. What would you do to feed your family? Once you can answer that question honestly you'll understand why default can't happen.

 

[Sanky Panky]

That would be nice but I don't understand how one avoids discussion about the monetary system in subjects to which it is relevant. In other words, any time discussion of deficits, debts, and the creditworthiness of the US is being discussed, an accurate understanding of the monetary system (and the implications of it) is required to have meaningful conversation about it. I don't really consider this kind of discussion an MMT discussion so much as a discussion about the real world as it exists.

My friend, you are too indoctrinated in this very fringe hypothetical idea. MMT takes a quasi-ponzi scheme that central banks around the world have been doing since the 2008 crisis (indirectly financing the purchase of government bonds), and claiming that this is effective policy. It's amazing for the owners of financial assets (who looooove the idea of a paid-for big government printing money freely), but it has been shit for the real economy. Here is what your government spending has done since 2008:

I guess MMT will argue that we don't have enough of it...

Moreover, you CAN NOT pretend to be able to explain the world, if your theory devolves into a sequence of "if only we did this... if only we did that...". In the end, the practice and consequences of MMT have no basis in reality (because nations depend on other nations, and always will), and the cases that DO exist where central banks print money at the will of the government (all the way back to the first Bank of France), all you have are major economic disasters. The evidence is not favorable.

Bonds exist in history because a) governments get penalized internationally for debasing the currency, therefore they do not print recklessly (for the first time, all major central banks are printing recklessly--which shall culminate shortly--so we are effectively in a currency war to devalue) and b) the money from domestic investors was never enough to pay for wars, so governments have always relied on international investors. The only reason why treasuries are considered "cash", is because of the liquid market for them, and their lack of volatility. The latter has changed quite rapidly with this government shutdown, and this will have major effects in the shadow banking system.

In the face of this government stand-off, it baffles me that anyone would ever leave it to politicians to allocate printed money into an economy. Does MMT make any propositions as to how to handle international trade? Foreign governments hold treasuries because they need to buy goods in dollars. Does MMT propose allocating money to countries under some kind of political accord? according to the size of the respective economies?

In light of that, how would an MMTer respond to this from China (hot off the press today):

China's official press agency, Xinhua, is an op-ed by writer Liu Chang in which he decries the "US fiscal failure which warrants a de-Americanized world" and flatly states that the world should consider a new reserve currency "that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States."

Does MMT propose to let these same politicians when and how to press the print button? Sorry but that won't fly with the rest of the world. It's a fantasy theory.

 

[TheLaughingStock]

It can pay and tax in dollars, but the private economy can still turn to other currencies, securities or commodities to subvert this. They will still have to pay taxes, but they can pay them at the point of exchange only. You can't force people to hold or invest in the currency.

When do you expect private investors to punish deadbeats like England and Denmark with unbearable interest rates? They seem to be doing pretty well since 1066 and 980 respectively.

 

[brian577]

Yeah. A default would never happen. And that's because if a default were to happen then the one motivator of human history would rise to take (forcibly) the wealth of the 1%. What would you do to feed your family? Once you can answer that question honestly you'll understand why default can't happen.

I'm not sure if this is reassuring or terrifying.

 

[Konka]

I'm not sure if this is reassuring or terrifying.

It's neither, it's a ridiculous statement.

 

[eBay Huckster]

Here is what your government spending has done since 2008:

I guess MMT will argue that we don't have enough of it...

It's too bad that chart makes no meaningful distinction between "gross federal debt" and "economically stimulative government spending", because I'm pretty sure it's apparent to all but the biggest Austrians that we aren't spending nearly enough on infrastructure or [in]direct transfer payments (both of which tend to have very high multipliers relative to, well, everything else the federal government does) - or that as it's currently functioning, the health sector is providing a massive net drag.

 

[Frankfurter]

Indeed it will.

What your graph doesn't include is what GDP would look like if the government didn't spend any money at all during the Great Recession.

We need only to look to Europe to see what that would be like. It ain't pretty.

Only if you look at Europa as a whole though. The results will be quite different if you look at certain countries.

 

[Mgoblue201]

That chart is incredibly misleading, not to mention mendacious. Anyone advocating for running debts during a recession is not arguing that the debt itself will increase economic growth. You can look toward Europe for an easy counter-factual: countries practicing austerity are still often mired in debt. That's because one must distinguish between debt caused by the recession and debt caused by exuberant spending. Yes, spending has increased during the recession, but if you compare it to recent history (especially the Bush years), and look at all levels of government spending which have an effect on growth, the increase is not that unusual. In fact, expenditures are now growing slower than at any point during the last few decades.

Even if you restrict that to the federal level (which you shouldn't, since all layers of government have an effect on growth), spending still appears to level off.

 

[commedieu]

your not powerless, you have just been conditioned to never use/enforce that power, your here on a forum complaining your powerless, instead of going out there, rallying people and using the power you have

rallying couldnt alter the code that the republicans voted on and rigged in the video. citizens are powerless.to.do anything about that.


these people have broken democracy while.cheering it. sorry feel good rallying isnt putting the gerrymandering problem to rest, nor is it going to be able to compete with the koch brothers billions, superpacs and lobbying. youre powerless same as I am. until all sides agree on the actual problem, we will continue to have our country controlled by a handful of special interests. the problem is that there is no effective method of people controlling their representatives. it is out of control. rallying couldnt stop the shut down, nor will.public opinion matter for the default. its totally naive to think that the only problem is people not contacting their representatives enough or rallying. congress has an ever sinking approval rating, people are contacting them.to let.them know they are shit. nothing matters because the tea party hates obamacare. thats our country right now. where is the public power here? absolutely no where.

now I'm not saying don't rally. or anything negative about rallying. I do my part and have in the past. but that isn't power. it's a fantasy compared to the reality of todAys politic. People are demanding our muslim.president to step down at a large rally at a memorial today. those people dont care about information, and will support the gop. they have proven it. unfortunately those and all people is what is needed to agree and make a change. the system needs to be revisited and changed. calling and rallying will always fall on deaf ears for matters that are important enough to be lobbied by billionaires.

it all sounds good, but we need money to challenge the process. I have plenty of rights, but they are watered.down when a police officer is searching my car without my permission, and as a minority im aware that my survival rate increases if I don't challenge the police.

how do you manipulate your representatives when you can't afford to as a population? wealth distribution is clear. because money and voting are all that matters. these people arent in positions to be voted out by citizens. again the power, where is it?

 

[empty vessel]

My friend, you are too indoctrinated in this very fringe hypothetical idea. MMT takes a quasi-ponzi scheme that central banks around the world have been doing since the 2008 crisis (indirectly financing the purchase of government bonds), and claiming that this is effective policy.

The Fed has bought Treasury bonds for decades. Just look at the 1947 testimony from Marriner Eccles quoted earlier. You don't understand the wold as it exists. I honestly have difficulty responding to you because you muddle so many concepts. For example, if you were paying attention, you would know that my entire argument has been in opposition to the indirect method of Treasury spending in which the Treasury sells bonds (debt) that the Fed buys back. I would prefer the Fed just credit the Treasury's account and eliminate "debt" entirely. (Or at least decouple its issuance from deficit spending--lord knows investors will clamor for bonds if they are taken away entirely). And I have already told you previously that I do not believe QE to be effective, because I am not a monetarist. Monetary policy is not effective stimulus. But you seem to be conflating QE with government debt, so I don't know what to tell you. You don't seem to understand the difference between fiscal policy and monetary policy. If you can't keep economic and monetary concepts straight, we can't have a coherent discussion.

It's amazing for the owners of financial assets (who looooove the idea of a paid-for big government printing money freely), but it has been shit for the real economy.

I have told you several times that when the Fed buys a Treasury bond, no new net financial assets are created. Those assets are created ("printed") when the Treasury issues the bond in the first place. When banks sell them to the Fed, they are just swapping assets. So if your concern is printing money, take it up with Congress, who has dictated (1) that all US currency be "printed" and (2) the amount of dollars to be "printed" (and destroyed) annually.

Here is what your government spending has done since 2008:

I guess MMT will argue that we don't have enough of it...

You are conflating concepts, so I don't even know what your argument is. Are you arguing against deficit spending or are you arguing against the Fed buying Treasury bonds? This chart (besides appearing inaccurate) does not convey any useful information. Adding net financial assets to the private sector by deficit spending will indeed increase economic production, provided it is not already at maximum output (in which case it will just result in a rise of prices). This is about the least controversial economic proposition one could state, and it has nothing whatsoever to do with MMT. But for that government spending, economic output would have been lower. Nobody with any credibility disputes this.

You do know that this has nothing to do with QE or the Federal Reserve's actions, right? Also, you do know that you have agreed with me in the past about the need to increase government net spending?

Moreover, you CAN NOT pretend to be able to explain the world, if your theory devolves into a sequence of "if only we did this... if only we did that...". In the end, the practice and consequences of MMT have no basis in reality (because nations depend on other nations, and always will), and the cases that DO exist where central banks print money at the will of the government (all the way back to the first Bank of France), all you have are major economic disasters. The evidence is not favorable.

I have bad news for you. None of your money is backed by anything. Each dollar in your bank account is printed money. But I have good news for you, too. I will gladly take your worthless money from you. PM me and I'll give you my bank information so you can put your money where your mouth is.

You rail against printed money, not understanding that we have had a fiat monetary system for forty years. (Or 80, depending on how you look it.) This infects your entire understanding, and I don't have the patience (nor possibly the skill) to untangle and clarify all of the confusion in your post. But I will say this:

In the face of this government stand-off, it baffles me that anyone would ever leave it to politicians to allocate printed money into an economy.

We already leave it to politicians to allocate printed money into an economy. It's called a budget. We also leave it to politicians to allocate printed money from an economy. It's called the tax code.

 

[Gotchaye]

This is only true if bonds and cash are equally inflationary, which they aren't, not even close. If they are you'll have to explain how. The fact that the values are almost the same (the bonds have interest) doesn't change what i'm talking about. Cash is more liquid than bonds, by definition. Much more liquid.

On my phone and about to get on a plane so this will be brief, but I don't understand why this ought to matter. Money is fungible and the people who own bonds aren't very liquidity-constrained. They're not unable to buy a sandwich because all of their cash is in t-bills. I'm hardly rich, and I spend /more/ money because some of my wealth is in interest-bearing assets rather than cash. This is because I need to save a smaller fraction of my present wealth to maintain a desired level of future spending, because interest-bearing wealth grows over time. Access to "risk-free" interest increases the rate at which I spend money right now.

 

[not psycho]

the system needs to be revisited and changed.

Yeah, the current system doesn't work because there is no personal responsibility.

Republicans changed the rules so that nobody could even bring up to a vote the possibility of reopening the government. Why? If they control the votes, why prevent it from being voted on?

Republicans offered funding and then withdrew their own offer, saying that "Obamacare" was so evil they had to take a stand against it. But how are you "taking a stand" when you continue to pretend you aren't the ones that did it?

The answer is that the system lets them get what they want without taking any responsibility. If they want the government shut down, they don't have to sign their name to shut it down. They don't have to tell us whether they agree with a proposal. They don't have to offer their own proposal. That would mean they had to actually take a stand, and they don't want to do that: people might catch on, and their propaganda might not work. The problem is the system is currently designed to let them get away with it, and we have no way to change it.

 

[Timedog]

It seems like with the bond system you'd have more political pressure for austerity (like right now), and in an MMT system there'd be more pressure towards overspending that would cause too much inflation. Maybe congress shouldn't be making the budget, and instead should be given an amount to spend decided on by economists and updated quarterly.

I don't know anything about Economics so this probably doesn't make sense.

 

[sprsk]

lol

 

[theprodigy]

yeah I'm seeing a bunch of Republican ads everywhere
THANKS EVILORE

 

[Sanky Panky]

The Fed has bought Treasury bonds for decades. Just look at the 1947 testimony from Marriner Eccles quoted earlier. You don't understand the wold as it exists.

You highlighted the wrong part of the statement from the then NY Fed guy. He specifically mentioned "FOR DOMESTIC PURPOSES", and Eccles was talking about the DOMESTIC money markets. Funnily enough, we don't live in a localized domestic world where dollars are almighty. Scarcity of resources demands that we incorporate global financial factors, in which MMT falls flat on its face.

As for the Fed buying treasuries for decades, this direct monetization of US debt is a more recent experiments by the biggest central banks in the world. Here is a chart of holdings by the Fed:

I honestly have difficulty responding to you because you muddle so many concepts. For example, if you were paying attention, you would know that my entire argument has been in opposition to the indirect method of Treasury spending in which the Treasury sells bonds (debt) that the Fed buys back. I would prefer the Fed just credit the Treasury's account and eliminate "debt" entirely.

How would you solve the problem of international trade? if foreign investors don't have US assets (treasuries) to cover balance of payments issues, what do you offer? crediting other governments at their request? crediting them at the behest of congress? Don't continue to ignore the rest of the world.

But you seem to be conflating QE with government debt, so I don't know what to tell you. You don't seem to understand the difference between fiscal policy and monetary policy. If you can't keep economic and monetary concepts straight, we can't have a coherent discussion.

The promise of QE has allowed the government to borrow at low rates (which spiked the second the Fed hinted at tapering). Without QE, we'd be spending more than $400 billion in net interest each year, so now both fiscal and monetary policy are in reactionary mode to Bernanke. But that's besides the point.

I have told you several times that when the Fed buys a Treasury bond, no new net financial assets are created. Those assets are created ("printed") when the Treasury issues the bond in the first place. When banks sell them to the Fed, they are just swapping assets.

You are half right... but banks take those excess reserves created by "swapping assets", and the idea was to increase the money flowing down to the economy. Since it's a flawed policy, and banks rather invest that money (hence money velocity is on the floor)... here is what banks do with the QE money:

You are conflating concepts, so I don't even know what your argument is. Are you arguing against deficit spending or are you arguing against the Fed buying Treasury bonds? This chart (besides appearing inaccurate) does not convey any useful information.

I'm arguing against your fantastical view that the answer is more government spending (via the narrow-minded framework of MMT). The demand for money and investment into the economy are dictated by much more than congress deciding to press the print button.

Adding net financial assets to the private sector by deficit spending will indeed increase economic production, provided it is not already at maximum output (in which case it will just result in a rise of prices). This is about the least controversial economic proposition one could state, and it has nothing whatsoever to do with MMT. But for that government spending, economic output would have been lower. Nobody with any credibility disputes this.

Inefficient government spending crowds out private investment, and private investment under market forces is more self-regulating and efficient than government. THOSE are basic true economic propositions. It is on your court to explain how this current congress could cover any shortfalls in full employment effectively... they can't even agree on having a functional government.

I have bad news for you. None of your money is backed by anything. Each dollar in your bank account is printed money. But I have good news for you, too. I will gladly take your worthless money from you. PM me and I'll give you my bank information so you can put your money where your mouth is.

Hehe I might... history shows that the actions in the last few years do indeed lead to a totally worthless piece of paper. I'll send a truckload over to you then.

You rail against printed money, not understanding that we have had a fiat monetary system for forty years. (Or 80, depending on how you look it.) This infects your entire understanding, and I don't have the patience (nor possibly the skill) to untangle and clarify all of the confusion in your post.

We've had it for 40 years, and have been through 5 major boom and bust cycles, with multiple recessions in between. I'm arguing for a more efficient system, not the same x1000 like MMT proposes.

 

[Timedog]

lol

I'm too dumb to get the joke. I really am dumb.

 

[Riki]

I'm too dumb to get the joke. I really am dumb.

The joke is that we're getting Pro-Republican ads on GAF.

 

[jamesinclair]

yeah I'm seeing a bunch of Republican ads everywhere
THANKS EVILORE

Click them.

Direct transfer of wealth from the republicans to neogaf.

 

[theprodigy]

Click them.

Direct transfer of wealth from the republicans to neogaf.

ALL PART OF THE PLAN
wait what

 

[makingmusic476]

Click them.

Direct transfer of wealth from the republicans to neogaf.

 

[Arde5643]

Click them.

Direct transfer of wealth from the republicans to neogaf.

Wow.
Evilore such smart.
Brilliance.
Why u so gud, Evilore?

 

[J.ceaz]

It's neither, it's a ridiculous statement.

It could be ridiculous. But we'd actually have to go off that cliff to find out. Most economists believe a US default would send us into a global depression. Now I don't know the full ramifications of such an event but I do know that plenty of people are struggling right now to feed their families. Add another round of job losses and contraction of the global economy and people are gonna stop worrying about "social order".

 

[ZedIndyLil]

I've got a Rob Zombie's Great American Nightmare ad. Which is way too appropriate.

 

[East Lake]

This infects your entire understanding, and I don't have the patience (nor possibly the skill) to untangle and clarify all of the confusion in your post.

It will all become clear when you realize where Sanky gets his stories.

http://www.zerohedge.com/

 

[Sanky Panky]

It will all become clear when you realize where Sanky gets his stories.

http://www.zerohedge.com/

Yeah no MMT blogs for me...

 

[KidOmega]

Louie Gohmert: A Debt Default Is 'An Impeachable Offense By The President

When asked whether he would allow the government to default on its debt, Gohmert projected the responsibility for such circumstances onto Obama.

"No," he said, "that would be an impeachable offense by the president."

http://m.huffpost.com/us/entry/4094707/

WTH??? What is wrong with these people?

 

[~Kinggi~]

Louie Gohmert: A Debt Default Is 'An Impeachable Offense By The President

When asked whether he would allow the government to default on its debt, Gohmert projected the responsibility for such circumstances onto Obama.

"No," he said, "that would be an impeachable offense by the president."

http://m.huffpost.com/us/entry/4094707/

WTH??? What is wrong with these people?

Force debt default, impeach the president, profit!!!

they are genius!

 

[eBay Huckster]

Yeah no MMT blogs for me...

And no Keynesian blogs either, apparently.

(Possibly not even any Chicagoan blogs, from the looks of your recent posting history.)

 

[theprodigy]

And no Keynesian blogs either, apparently.

(Possibly not even any Chicagoan blogs, from the looks of your recent posting history.)

only goldbugger blogs

 

[The Technomancer]

Louie Gohmert: A Debt Default Is 'An Impeachable Offense By The President

When asked whether he would allow the government to default on its debt, Gohmert projected the responsibility for such circumstances onto Obama.

"No," he said, "that would be an impeachable offense by the president."

http://m.huffpost.com/us/entry/4094707/

WTH??? What is wrong with these people?

Amazing

Simply amazing

 

[Unstable]

Louie Gohmert: A Debt Default Is 'An Impeachable Offense By The President

When asked whether he would allow the government to default on its debt, Gohmert projected the responsibility for such circumstances onto Obama.

"No," he said, "that would be an impeachable offense by the president."

http://m.huffpost.com/us/entry/4094707/

WTH??? What is wrong with these people?

No words... literally no words or combination of words in the English language yet exist that accurately describe these people, "Incomprehensibility Evil" Or "Unfathomably Moronic" doesn't even come close.

 

[Majine]

America, please clean up this shit

/ World

 

[LiK]

Ted Cruz is making some hilarious Apple and Obamacare analogies