Home » xyzzy » Dungeon » Modern Monetary Theory (or, how I stopped worrying about the natl debt.)
Re: Modern Monetary Theory [message #91686 is a reply to message #91685] Sat, 11 April 2020 17:34 Go to previous messageGo to next message
Wayne Parham is currently offline  Wayne Parham
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I think I see, at least in a fuzzy way. I'm seeing MMT as a sort of "dependency inversion" of Keynesian economics, to borrow a computer science phrase. Sounds like a similar principle.
Re: Modern Monetary Theory [message #91687 is a reply to message #91686] Sat, 11 April 2020 19:19 Go to previous messageGo to next message
Rusty is currently offline  Rusty
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No reinventing the wheel. It's been there all along they say. Just like Pluto was before being discovered. Planet or not. Someone pointed out a Max Planck saying that innovation becomes accepted from death, (of it's detractors). Parts of classical economics are still very valid. Adam Smith asserted that progressive taxation should be based on the income from those who make money while they sleep.
Re: Modern Monetary Theory [message #91688 is a reply to message #91687] Mon, 13 April 2020 11:09 Go to previous messageGo to next message
Rusty is currently offline  Rusty
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This article is just about the best dang one I've read about the whole dang thing. And a sobering precursor towards what all this money being bandied about now to bring back the economy. Which one? The one for the public, or the one for the F.I.R.E sector, (finance-banking, insurance & real estate) and wall st. The reason some MMT economists call their studies 'agnostic', is that it only takes two fingers, one for each party, to point at the political system in the U.S. as it is. To blame for the delusional, warped economy we live with. Remember the Three Stooges? Moe would ask them how many fingers, "two", they'd say. Boink! Right in the eyes. That's what we're getting.

https://michael-hudson.com/2020/04/the-use-and-abuse-of-mmt/
Re: Modern Monetary Theory [message #91689 is a reply to message #91688] Mon, 13 April 2020 16:00 Go to previous messageGo to next message
Wayne Parham is currently offline  Wayne Parham
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An interesting read. It references Keynes a lot.
Re: Modern Monetary Theory [message #91690 is a reply to message #91689] Mon, 13 April 2020 17:03 Go to previous messageGo to next message
Rusty is currently offline  Rusty
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Glad you checked it out. Yes, Keynes was great. You must admire him a lot.
Re: Modern Monetary Theory [message #91701 is a reply to message #91690] Wed, 15 April 2020 11:48 Go to previous messageGo to next message
Wayne Parham is currently offline  Wayne Parham
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Registered: January 2001
Illuminati (33rd Degree)

It's not so much that I admire Keynes as it is that I credit him with the idea of deficit spending to inject funds into the economy. His approach is sort of the opposite of laissez-faire economics.

I think that the stereotype of Republicans and Libertarians views them as tending towards laissez-faire and the stereotype of Democrats and Socialists views them as Keynesians. But I think this kind of polarization tends to put each side against each other and limits healthy discourse. Better, in my opinion, to see the strengths and weaknesses of each approach, and to use them when and where they make the most sense.

So what I think is that balance is always our friend.

Republicans and Libertarians can embrace Keynesian economics as long as the deficit spending is truly targeted at resources that all people use. Things like infrastructure, roads and dams and the military. Democrats and Socialists can embrace laissez-faire as long as things are running smoothly. For that matter, everyone can.

I do think that times like these - when we face a major economic challenge - is when a Keynesian approach makes the most sense. Those checks that just went out will help folks that lost jobs. They'll spend it on a variety of things and keep businesses going, which in turn can employ a few people. This kind of stimulus is probably required to keep the economy from stalling.

But I also think that deficit spending should be avoided when we are on decent economic footing. That's when I think it makes sense to go with a "balanced budget" or even one that pays down debt. Seems to me that to have a budget deficit at any time that isn't a financial emergency is sort of like national gluttony.
Re: Modern Monetary Theory [message #91710 is a reply to message #91701] Wed, 15 April 2020 14:25 Go to previous messageGo to next message
Rusty is currently offline  Rusty
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I was kind of baiting you a bit with the Keynes infatuation. As you know and point to obviously there are basic principals of influences in the economics spectrum. They tend to wash out in a reflection of principle of allegiance in our two party system. But there are more nuance than classical laissez faire and Keynesian economics that make up the spectrum. I'd like to hope and feel there is an opening with better cooperation among the parties by seeing the objectivity of what the MMT offshoot points out that might empower both parties and ideologies to root out it's entrenched stalemate. They do share a common bond already. If they'd realize the detriment of the New Keynesian evolution also known as neo-liberalism that has arisen which both parties have taken a stake in. I think the link article gives a wonderful example to how our economy has been co-opted to run inefficiently due to a debt burden driving down the public's ability to thrive.
MMT points to a sovereign governments capacity to be able to pay it's debt obligations without taxing first. That is what actually takes place.
If politics can ever come to that understanding and apply rules enabling spending into the real economy rather than the finance debt economy. Throwing good money into bad actors. There might be an eventual reduction of nation debt to a reasonable level. Applying austerity to do so is counterproductive to realizing that aim.
Let the bad actors absorb the austerity for a change.
Re: Modern Monetary Theory [message #91728 is a reply to message #91710] Sun, 19 April 2020 11:36 Go to previous message
Rusty is currently offline  Rusty
Messages: 385
Registered: May 2018
Location: Kansas City Missouri
Illuminati (1st Degree)
Another nuance that has been around a long time is Marxism. Always dissed as the precursor to Communism. But that wasn't Karl's aim or Lenin's for that matter. Richard Wolff is a very interesting economist that has pushed the idea of democratizing capitalism, by forming worker co-op's. To help stabilize capitalism's overzealous trend towards maximizing profit. Usually at working class expense. Unions helped stave off that tendency, but have been marginalized by political influence and their own sleazy imagery of graft and corruption. Basically their relationship with management were often adversarial which makes it little wonder their deterioration would be acquired eventually by hook or by crook. Wolff employs the worker co-op as a means of putting workers in a position to have some skin in the game with employers. By participating with the decision making that management decrees in a typical capitalist setup. Worker co-op's have and do exist currently. The Mondrigon Corporation, a Spanish conglomerate has existed since the 50's as a worker co-op. https://en.wikipedia.org/wiki/Mondragon_Corporation
In this article, Wolff points to the Covid crisis now as one of many triggers historically, revealing capitalism's failings for society at large. Getting back to normal as the norm goes, always seems to make them Kicks, (gettin harder to find) like Paul Revere & his Raider sang about. https://www.rdwolff.com/covid_19_economic_crash
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