MMT Denier?
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pilt, I don’t know you. I don’t know your age. I don’t know what you do for a living, nor do I know how long you’ve done it, nor what is your success at it. So for the time being I think I’ll stick with the words of economists I do know about and whose credentials I respect. Men and women who have spent decades of their lives studying and debating topics of importance. Having an internet poster casually wave his hand and say “straw man” really has no effect on my consideration of what is accurate and what is not. In this particular article the man states his case in a rational and reasonable manner reflecting years of understanding what is economically possible and what is voodoo economics. He along with most educated economists recognize an economic slight of hand when they see it.
I would counter that they are basing their critique on a long dead macroeconomic system and try to insert bogus boogeymen into their critiques because they have no other way to refute reality.
Simple question I asked earlier...
If the federal government doesn't create new dollars for investment via deficit spending, how can the number of dollars in the US and world non-government economies increase?
There is no getting around it. He mischaracterizes MMT badly. Can you link me to any MMTer that advocates eschewing government debt issuance in favor of simple transfers from the central bank to treasury?
Through efficiency of use. How often $1 gets circulated increases the gross GDP and doesn't require new money to be created. New dollars devalue all the existing dollars.
It's wild
It is. The difference is effectively the measure of productivity increases which are deflationary.
Not true and illogical. How often $1 gets circulated is how often it changes hands. An existing dollar is never a new dollar. You can't turn one dollar into five dollars if new money isn't spent/given to the non-government sector by the federal government spending in deficit.
Again, if new dollars devalued existing dollars, the US dollar would already be worthless.
Have we found any evidence of humans living on the sun yet? If so, have we communicated with them to find out if any of them are MMTers? This is important because at least one may exist on the sun and might have a hard time communicating with us via a blog/article/paper with all that electromagnetic crap around.
I’m not following your logic on this point. I’ll give an example. I moved to Honolulu in 1972. At that time the price for a gallon of gasoline was 28 cents. Today the price of a gallon of gasoline in Honolulu is around $3.20. This despite the fact there are far more known reserve deposits in the world. So there’s an increase in available gasoline on an order of magnitude and yet it costs around 9 to 10 times more.
Why do you suppose that is? Does inflation have anything to do with it? (Inflation being an increase in the money supply relative to the amount of goods available for purchase.) Is that not evidence that the dollar has been massively deflated in value?
The GND, which is pinning its entire rationale on MMT, is estimated to require an increase in the money supply by an estimated tens of trillions of dollars. And when has an estimate EVER been accurate, greater than how it turns out? (I give you Boston’s Big Dig, or California’s now halted train.). Do you not see skyrocketing inflation in that future?
As I understand it the idea is that politicians will decide whether there is a need to increase government spending, assuming politicians will be rational, will be expert in deciding which industries to ply with the burst of largess. Assuming politicians will not be corrupt and will choose the winning industries purely out of the goodness of their hearts. (Fat chance!)
So the politically connected will be first at the trough of the new money. Which means their well being, profit, etc. will be improved before the inflationary reaction hits. Once the money gets circulated far enough into the economy inflation will hit consumers and regular citizens and small businesses like a sledge hammer. But the crony capitalists, the ones who bribe and extort the money originally will become the new fat cats.
MMT is a con game, predicated on promising something it can’t deliver. But in the meantime the collectivist vision of tyrannical government will have put another notch on its gun.
Now, I’m tired of arguing about it. I’m going to bed. I willingly leave the last word to anybody that wants it.
Are you saying that the price difference in gas between 1972 and today is all due to inflation? Of course known reserves have increased. Somebody has to get it out of the ground though. Supply has also indeed increased. What has demand looked like compared to supply since 1972? What monetary relationship does demand have with supply? Who sets the price of oil? Is it the government? Do oil companies expect to make a profit? Does the price of oil affect the price of gasoline? Is the gasoline of today identical to the gasoline of 1972? Is the extraction process for oil the exact same? Has refining changed? How about the cost of regulation? Is regulation today the same as 1972? Are the labor costs associated with production the same today as they were in 1972? Did you expect and receive pay increases during your career or did you retire making the same money you did in 1972? Do wages have anything to do with price increases?
Huh? MMT doesn't promise anything. It's a theory that describes current macroeconomics. It's nothing more than that. I didn't go from hating government spending to a love for all things government spending by learning about MMT. Since I've learned about MMT, I simply understand the effects of government spending on the economy now.
How the politicians view deficit spending and how they choose to spend isn't MMT. It isn't a justification for anything. MMT simply describes the macroeconomics of our fiat currency system. I can't say enough times that MMT is an economic theory, not a political party, political system, ideology, or a justification for deficit spending. It simply describes what deficit spending and surpluses do in the economy, the effects.
Of course it's much more complex than that because the economy is more than government spending, but if you get the boogeymen out of your head and start with the basics of what government spending does in the economy, the rest starts falling into place.
OK.
Well, I don't know who this Fred guy is or how he knows this stuff, but what exactly does this have to do with the price of gas in Honolulu?Here is another wild one. Government deficits/money supply compared to inflation. No relationship at all. It is almost like inflation is a real resource phenomenon not monetary phenomenon.
Just that the change in the price of gas in Honolulu is not correlated with deficits.
