Here's a fairly good MMT primer if anyone is interested.
http://pragcap.com/resources/understanding-modern-monetary-system
On 22-Apr-11, at 7:57 AM, Max Sawicky wrote:
I appreciate the reference.
Where are you on this, JD?
On Fri, Apr 22, 2011 at 10:42 AM, Steve Bruns <[email protected]>
wrote:
A rebuttal to Krugman's recent NYT piece, "What are Taxes For?" and
his seignorage objection to MMT.
http://bilbo.economicoutlook.net/blog/?p=14238&utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+economicoutlook%2FFYvo+%28billy+blog%29
On 22-Apr-11, at 6:53 AM, Doug Henwood wrote:
>
> On Apr 22, 2011, at 9:33 AM, Max Sawicky wrote:
>
>> Re: the SS 1%, the thing people miss is that it never jumps on you
>> all at once.
>> It builds up imperceptibly over the next 30 years.
>>
>> http://www.socialsecurity.gov/OACT/TR/2010/
VI_OASDHI_GDP.html#159076
>>
>> (Table VI.F4)
>>
>> So the adjustment for any year to year period is much less than a
>> percent of GDP.
>
> Yes, I know this stuff very well - been writing about it for 15
> years. But you see the circus in Washington now. Could you imagine
> what a fight over something like the equivalent of $140 billion a
> year would look like?
>
>> As for MMT, I understand it as boiling down to the point that a
>> sovereign nation cannot default on debts in its own currency, so
>> the issue is really the inflationary threat from monetizing the
>> debt and the Fed's ability to deal with it when and to the extent
>> appropriate.
>
> What's modern or even theoretical about that? Marx wrote in the
> Grundrisse: "The notes with which it [the central bank] discounts
> the bills of exchange of this public are at present nothing more
> than drafts on gold and silver. In our hypothetical case, they would
> be drafts on the nation's stock of products and on its directly
> employable labour force: the former is limited, the latter can be
> increased only within very positive limits and in certain amounts of
> time. The printing press, on the other hand, is inexhaustible and
> works like a stroke of magic." Money is valuable because it's a
> claim on goods and services (including labor). If you print money in
> excess of that, then you've got a problem. MMT seems to be an effort
> to evade those constraints - that for a gov to spend money it has to
> take it from someone or it's just playing inflationary games.
>
> I don't get how the Fed could print money to pay off Treasury paper
> and then "deal with" the inflationary consequences - wouldn't that
> be undoing what it had just done?
>
> Doug
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