Australian (ASX) Stock Market Forum

Modern Monetary Theory - MMT

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wayneL said:
This is the part that s**ts me off the most. It's moral hazard and that is the reason that anything over the short term it will blow the f*** up.... And the reason certain hetrodox economists light Steve Keen should give themselves an uppercut.

IOW, what is that leaves the large proportion of the population who have been fiscally responsible over the course of their lives only to see the profligate get rewarded for their profligacy.

Those that feel responsible for their own futures will be severely cheated, and that kind of end well.
Click to expand...

The only reason all people are not financially successful is because systematic whatever-ism, colonisation and the hegemony of the chrony capitalist class hence what money they didn't make should be printed and handed to them....makes perfect sense.
 
Think you're missing this in your simplistic evaluation.

Let's take the current Pandemic where Billions were required instantly.
It's not come from me or you, it's come from printing it where required and shuffling Credit to where it's required with a click of a mouse. Have you seen massive raises in Taxes or rapid declines in spending?

So to the use of those "Free" Dollars. They have stopped countless people from losing homes both their own and rental. Its stopped many businesses from going broke and has led to great improvements in many with employment reaching new peaks. Its allowed spending.
Spending begets employment begets prosperity.

So How does it get paid back?
It doesn't----Click of a mouse and the credit is paid off The GOVT ---any Sovereign power---Is in debt to itself so can write that debt off.

Money makes money, generate it, and USE it and prosperity comes---
Free yes but it is being used over and over and over until it's written off.

Crazy???---Well it's happened and happening right NOW!
 
wayneL said:
This is the part that s**ts me off the most. It's moral hazard and that is the reason that anything over the short term it will blow the f*** up.... And the reason certain hetrodox economists light Steve Keen should give themselves an uppercut.

IOW, what is that leaves the large proportion of the population who have been fiscally responsible over the course of their lives only to see the profligate get rewarded for their profligacy.

Those that feel responsible for their own futures will be severely cheated, and that kind of end well.
Click to expand...
but that is the human nature part that is ( normally ) very hard to resist

where MMT might work ( and i don't trust MMT to be applied strictly and properly ) is to be used to fund a project that will be a clear benefit for the national future ( say a second rail line between Adelaide and Perth ) ( i am sure some members could think of other compelling projects )

the other problem now , is the younger generations have been exposed to superfluous teachings , and we probably need to ( almost ) completely gut the education system and start again ( and help the poor little tykes to think and research for themselves )
 
tech/a said:
Think you're missing this in your simplistic evaluation.

Let's take the current Pandemic where Billions were required instantly.
It's not come from me or you, it's come from printing it where required and shuffling Credit to where it's required with a click of a mouse. Have you seen massive raises in Taxes or rapid declines in spending?

So to the use of those "Free" Dollars. They have stopped countless people from losing homes both their own and rental. Its stopped many businesses from going broke and has led to great improvements in many with employment reaching new peaks. Its allowed spending.
Spending begets employment begets prosperity.

So How does it get paid back?
It doesn't----Click of a mouse and the credit is paid off The GOVT ---any Sovereign power---Is in debt to itself so can write that debt off.

Money makes money, generate it, and USE it and prosperity comes---
Free yes but it is being used over and over and over until it's written off.

Crazy???---Well it's happened and happening right NOW!
Click to expand...
Yes so that allow closing the economy for no objective reason: workkeeper, closing borders, etc etc.
Gov irrational decisions which closed my business but left me ok with no job...should i complain because i was not de facto ruined by my own gov actions?
..of course i will not, but the country is a clear loser, not all business can stop and restart after 3y.. especially OS ones .so net result i retired well before expected, and si does the stream of export taxable dollars/yuan
I would hope that in a more realistic and money valued world, workkeeper would not be needed and more thoughts applied.
Australia has lost exports dollars, IP increases gone and the west some growth and patents.but it's ok, gdp has increased by nearly the QE added??????
 
tech/a said:
Think you're missing this in your simplistic evaluation.

Let's take the current Pandemic where Billions were required instantly.
It's not come from me or you, it's come from printing it where required and shuffling Credit to where it's required with a click of a mouse. Have you seen massive raises in Taxes or rapid declines in spending?

So to the use of those "Free" Dollars. They have stopped countless people from losing homes both their own and rental. Its stopped many businesses from going broke and has led to great improvements in many with employment reaching new peaks. Its allowed spending.
Spending begets employment begets prosperity.

So How does it get paid back?
It doesn't----Click of a mouse and the credit is paid off The GOVT ---any Sovereign power---Is in debt to itself so can write that debt off.

Money makes money, generate it, and USE it and prosperity comes---
Free yes but it is being used over and over and over until it's written off.

Crazy???---Well it's happened and happening right NOW!
Click to expand...
money is meant to be a measure( and store ) of productivity

although i am not a fan of Bitcoin and other cryptos , i can see the logic behind them especially since bitcoin was started as a system to reward normal citizens helping scientific research , by donating computer time .

when you start creating currency units betting on future productivity ( to add value to those creations ) , you start a very dangerous form of gambling

and after years of working at menial jobs i have seen the ridiculous concept of 'productivity raises ' in action , including some getting increased salaries for counter-productive efforts .
i believe productivity creates prosperity which allows the options of investing or spending

for example my second enterprise as a pre-teen was mowing a lawn for an elderly lady ( and she supplied the mower and fuel , initially ) after a while i offered her a deal i would mow that lawn as an installment payment plan to purchase the said mower ( and after that deal was complete expanded to mowing an extra 5 lawns with that mower on a regular basis , )

the profits from the expanded lawn-mowing went into the purchase of a bicycle , and the bicycle became a pivotal part of the paper-rounds , i also started doing , all this done before even sitting for my Junior exams ( and therefore without any diploma in economics or finance or banking )

this is NOT rocket science , and sure as heck requires no Ph. D.

and yet here our nation stands on the edge of a potential global meltdown ( either financial or nuclear )
 
tech/a said:
Think you're missing this in your simplistic evaluation.
Click to expand...
Geez nothing gets by you, I thought my tone was most obviously sarcastic.
tech/a said:
Have you seen massive raises in Taxes or rapid declines in spending?
Click to expand...
Yes, definately that's the problem. All this funny money that's been printed has caused massive inflation (Please don't be a chump and blame Putin) and the tax is stealing from our future and the future of our children. It's a very slime+bag way to do it as it's not immediately obvious to dumb people.
tech/a said:
Money makes money, generate it, and USE it and prosperity comes---
Free yes but it is being used over and over and over until it's written off.
Click to expand...
You probably believe in perpetual motion and don't know anything about the laws of thermodynamics, you should look these things up.
tech/a said:
Crazy???---Well it's happened and happening right NOW!
Click to expand...
Crazy yes and there is an economy happening right now, what fairy tale you attach to it has nothing to do with reality.
 
3 hound said:
Geez nothing gets by you, I thought my tone was most obviously sarcastic.

Yes, definately that's the problem. All this funny money that's been printed has caused massive inflation (Please don't be a chump and blame Putin) and the tax is stealing from our future and the future of our children. It's a very slime+bag way to do it as it's not immediately obvious to dumb people.

You probably believe in perpetual motion and don't know anything about the laws of thermodynamics, you should look these things up.

Crazy yes and there is an economy happening right now, what fairy tale you attach to it has nothing to do with reality.
Click to expand...
now the IMPORTANT question is when will this dream ( nightmare ) end

sorry i missed the sarcastic tone , maybe my sensitivity has been dulled by the last 3 years of absurdity in global affairs ( since September 2019 )

cheers
 
3 hound.

We know you are new to finance and probably also posting appropriately on forums.

I know absolutely nothing about Modern Monetary Theory.

So...

I watch and read, and learn, and keep my trap shut.

gg
 
Modern Monetary Theory thinks you can create as much money as you like , and spend your way out of difficulty ( as what your spend will come back as future revenue )

now this isn't completely absurd , but it can't be done irresponsibly either , and the problem is ... someone who has previously been irresponsible with money , will suddenly become responsible NOW after given access to limitless credit

now MOST people when given unlimited credit cannot keep to careful and prudent spending , now this doesn't happen instantly but the trend is to use more and more credit to solve every problem

the OTHER problem here is that fiscal restraint is no longer rewarded by successful solutions ( compared to those that just throw money at all the problems )
 
divs4ever said:
Modern Monetary Theory thinks you can create as much money as you like , and spend your way out of difficulty ( as what your spend will come back as future revenue )

now this isn't completely absurd , but it can't be done irresponsibly either , and the problem is ... someone who has previously been irresponsible with money , will suddenly become responsible NOW after given access to limitless credit

now MOST people when given unlimited credit cannot keep to careful and prudent spending , now this doesn't happen instantly but the trend is to use more and more credit to solve every problem

the OTHER problem here is that fiscal restraint is no longer rewarded by successful solutions ( compared to those that just throw money at all the problems )
Click to expand...
Politicians can now promise potential voters almost unlimited rewards if they vote them in because money in MMT is unlimited.

Elections just become a case of politicians trying to outdo each other in promising stuff, MMT removes the idea of spending limits.
 
3 hound said:
Politicians can now promise potential voters almost unlimited rewards if they vote them in because money in MMT is unlimited.
Click to expand...
Detail aside, the overall thinking and environment sounds rather like the late-1980's.

That ended with "the recession we had to have" and at the state level Victoria was effectively broke once the banks refused to lend the state any more money. What followed were many years of doom and gloom.

All this spending like there's no tomorrow will come at a price I expect. :2twocents
 
Smurf1976 said:
Detail aside, the overall thinking and environment sounds rather like the late-1980's.

That ended with "the recession we had to have" and at the state level Victoria was effectively broke once the banks refused to lend the state any more money. What followed were many years of doom and gloom.

All this spending like there's no tomorrow will come at a price I expect. :2twocents
Click to expand...
i expect you are correct , i just wonder how many years/decades/centuries the price will take to pay out ( i bet they will resort to another bunch of tricks and illusions first )

BTW Governments are almost always broke after all most are them never produce anything useful ( and once they create a cash-earner are tempted to sell it off to reduce the deficit elsewhere )
 
I realise that MMT does have a purpose for taxation as a handbrake on an overly enthusiastic economy.

At the same time, when you look at other aspects of mmt you wonder why, if a country creates their own currency, such a country would need taxation at all.

The only answers, can only breed cynicism.
 
and cynicism i have in bucket-loads .

but let's hope for a statesman ( or woman ) because a politician or bureaucrat doesn't see a problem rather a career opportunity

if we had an exchange system ( like barter ) we wouldn't need currency at all , but then all members of society would have to be productive in their own way
 

"These Are Incredible Moves" - Yen's Problem Is That Japan Will Also See Inflation In 2022​


ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

will we get to see MMT implode before our eyes ??
 
When ever I see any thing written about MMT I cannot help but hear those immortal words.

"This time is different"

Apologies if its already been said.
 

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