Modern Monetary Theory - MMT

[mullokintyre]

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.

I left the doom and gloom in Victoria at the end of 1990 and spent the next and a bit two years working in Fiji.
By the time we returned, Kennet was premier and Victoria had turned around and seemed much brighter than when we left.
Whatever people may think of his real and perceived faults, he turned the state on its head and got the joint moving.
Victoria continued to be a good place to live for some years after his electoral demise.
In some ways, its been downhill ever since.
Mick

 

[3 hound]

I left the doom and gloom in Victoria at the end of 1990 and spent the next and a bit two years working in Fiji.
By the time we returned, Kennet was premier and Victoria had turned around and seemed much brighter than when we left.
Whatever people may think of his real and perceived faults, he turned the state on its head and got the joint moving.
Victoria continued to be a good place to live for some years after his electoral demise.
In some ways, its been downhill ever since.
Mick

Never been to go Victoria but it appears hold the values of personal freedom, liberty, sovereignty, tradition and family in the highest regard.

[insert sarcasm emoji]

 

[mullokintyre]

Never been to go Victoria but it appears hold the values of personal freedom, liberty, sovereignty, tradition and family in the highest regard.

[insert sarcasm emoji]

We don't call it the Nanny State for nuthin.
Mick

 

[divs4ever]

i would leave Dan with my children ( if i had any ) in fact i wouldn't leave him in charge of an empty matchbox

 

[over9k]

Here's modern monetary theory:



end of thread

 

[mullokintyre]

We don't call it the Nanny State for nuthin.
Mick

As of Friday, many, but not all, of the restrictions in Victoria will disappear.
Any one who is not vaccinated, for whatever reason, either medical, mental, constitutional, personal choice, or whatever, can now do almost everything that the fully vaxed can
They can go into a pub, or restaurant, eat , drink and be merry without a vaccination certificate, but you cannot work in them.
There is a widespread lack of workers, particularly in hospitality, and yet the non vaxed cannot work.
Bizarre.
Its the science you see.
Mick

 

[divs4ever]

As of Friday, many, but not all, of the restrictions in Victoria will disappear.
Any one who is not vaccinated, for whatever reason, either medical, mental, constitutional, personal choice, or whatever, can now do almost everything that the fully vaxed can
They can go into a pub, or restaurant, eat , drink and be merry without a vaccination certificate, but you cannot work in them.
There is a widespread lack of workers, particularly in hospitality, and yet the non vaxed cannot work.
Bizarre.
Its the science you see.
Mick

sorry , no i can't , i have boycotted those recreational activities , and i don't forgive so easily , and have a disability pension to boot so no more working underpaid in the hospitality industry either ,

 

[tech/a]

Here's modern monetary theory:

View attachment 140609

end of thread

I read all these comments and can't see where people have understood the way it works.
It's not free money.
Its money which is injected into areas to create jobs where people earn a living and generate taxes.
As a business owner, I have to borrow funds to do that --- but I still do it as I know that to expand and grow I have to.

What do you think China Does --- supplies money to build its economy and it works --- massive growth.

In extraordinary cases and it could be argued that Hospitals, Eldercare, are in that lot fixing anything of this magnitude takes lots and lots of $$s It needs to be placed in the system where it is used by many. The Govt doesn't need to have it back it just writes it off but those funds are now moving through the economy as a whole, You, me, we all benefit.

It's happening now Where do you think Russia gets its money from. It hasn't ground to a halt groveling in Bankruptcy.

Anyway back to the grind.

 

[qldfrog]

I read all these comments and can't see where people have understood the way it works.
It's not free money.
Its money which is injected into areas to create jobs where people earn a living and generate taxes.
As a business owner, I have to borrow funds to do that --- but I still do it as I know that to expand and grow I have to.

What do you think China Does --- supplies money to build its economy and it works --- massive growth.

In extraordinary cases and it could be argued that Hospitals, Eldercare, are in that lot fixing anything of this magnitude takes lots and lots of $$s It needs to be placed in the system where it is used by many. The Govt doesn't need to have it back it just writes it off but those funds are now moving through the economy as a whole, You, me, we all benefit.

It's happening now Where do you think Russia gets its money from. It hasn't ground to a halt groveling in Bankruptcy.

Anyway back to the grind.

I read all these comments and can't see where people have understood the way it works.
It's not free money.
Its money which is injected into areas to create jobs where people earn a living and generate taxes.
As a business owner, I have to borrow funds to do that --- but I still do it as I know that to expand and grow I have to.

What do you think China Does --- supplies money to build its economy and it works --- massive growth.

In extraordinary cases and it could be argued that Hospitals, Eldercare, are in that lot fixing anything of this magnitude takes lots and lots of $$s It needs to be placed in the system where it is used by many. The Govt doesn't need to have it back it just writes it off but those funds are now moving through the economy as a whole, You, me, we all benefit.

It's happening now Where do you think Russia gets its money from. It hasn't ground to a halt groveling in Bankruptcy.

Anyway back to the grind.

Do you agree that this works as long as 1$ of free money distributed gains more than 1$ of real return..
Aka positive return on that dollar.
If you put 1 billion in and gdp grows by less than 1 billion, you are just burning money.sadly we have reached that stage from building roads and assets improving productivity to just piling up more debt..but who cares..it will never be paid back .and then ohh surprise inflation..
But it is great to boost other countries surpluses..hi China

 

[basilio]

I read all these comments and can't see where people have understood the way it works.
It's not free money.
Its money which is injected into areas to create jobs where people earn a living and generate taxes.
As a business owner, I have to borrow funds to do that --- but I still do it as I know that to expand and grow I have to.

What do you think China Does --- supplies money to build its economy and it works --- massive growth.

In extraordinary cases and it could be argued that Hospitals, Eldercare, are in that lot fixing anything of this magnitude takes lots and lots of $$s It needs to be placed in the system where it is used by many. The Govt doesn't need to have it back it just writes it off but those funds are now moving through the economy as a whole, You, me, we all benefit.

It's happening now Where do you think Russia gets its money from. It hasn't ground to a halt groveling in Bankruptcy.

Anyway back to the grind.

I suggest one problem with MMT is who and what gets the money.

For example during COVID and the last financial crisis governments poured billions into banks and other financial institutions to ensure liquidity. Great for the bankers and their wealthy clients.

Tech/a suggest that injecting similar billions into hospitals, health care and say education could also improve services and the economy. I suspect that private enterprise would also support the move but only if it was private hospitals, private healthcare services and private schools that were supported. If these funds were earmarked for publicly funded facilities yep we know where that would go

And finally if the government decided that the current unemployment benefit was actually just a slow starvation drrip and wanted to boost it to other pension levels the cries of outrage would be deafening.

 

[tech/a]

Do you agree that this works as long as 1$ of free money distributed gains more than 1$ of real return..
Aka positive return on that dollar.
If you put 1 billion in and gdp grows by less than 1 billion, you are just burning money.sadly we have reached that stage from building roads and assets improving productivity to just piling up more debt..but who cares..it will never be paid back .and then ohh surprise inflation..
But it is great to boost other countries surpluses..hi China

Think about this QLDF
Who is the debt to if the money is supplied to he who prints it?
If your a State Government and you want some of that printed money you OWE that amount to the Federal Government.
You as a State Government can go broke if you don't pay it back. The Federal Government can use it as they see fit and if
they wish they can write it off as they owe themselves. Build a new hospital, Subsidise Medicines (That is billions in itself
Do we as Taxpayers pay for that with taxes---nahh the drug companies get the money they want for the drug and the GOVT pays
living in a Sovereign country has its benefits).

It's who you are in debt to. If you're a Country in the EU and you need to borrow money from the EU you owe that as a debt back to the EU.
If you are Great Britain you don't want to owe anyone as you are a Sovereign Power you can write off your debt to yourself.
You can build as many roads as you want (USA Great Depression) , Finance as many wars as you need to (USA and every Sovereign power involved in war) you pay who needs to be paid ( and accepts it as payment) with Money you print and write it off as you see fit.

If I print my own money I'm never in debt. People who use the money I give them as a loan are in debt. They cant write it off.

 

[qldfrog]

Think about this QLDF
Who is the debt to if the money is supplied to he who prints it?
If your a State Government and you want some of that printed money you OWE that amount to the Federal Government.
You as a State Government can go broke if you don't pay it back. The Federal Government can use it as they see fit and if
they wish they can write it off as they owe themselves. Build a new hospital, Subsidise Medicines (That is billions in itself
Do we as Taxpayers pay for that with taxes---nahh the drug companies get the money they want for the drug and the GOVT pays
living in a Sovereign country has its benefits).

It's who you are in debt to. If you're a Country in the EU and you need to borrow money from the EU you owe that as a debt back to the EU.
If you are Great Britain you don't want to owe anyone as you are a Sovereign Power you can write off your debt to yourself.
You can build as many roads as you want (USA Great Depression) , Finance as many wars as you need to (USA and every Sovereign power involved in war) you pay who needs to be paid ( and accepts it as payment) with Money you print and write it off as you see fit.

If I print my own money I'm never in debt. People who use the money I give them as a loan are in debt. They cant write it off.

True, but look where this power goes..look at the US EU vs Russia/China... Who is hurting past the CNN and ABC propaganda?
Then it is also inflation and in the case of USD collapse of trust/power accessed thru that previously trusted cirrency..petrodollar on the way out.
Sure it takes a while: generations even , look at Greece Italy France now and soon the US.a slow grinding of real economies turning into farces and freeloaded by parasites
It is a race to the Fiat value removal...
And only one clear loser: the saver, the ant the " responsible" aka sucker.
Until they stop playing that dupe game in big enough number.
In a way, it is good for me that you still play the game, maybe even directly bid for these infrastructures jobs, make profit, employ people but that extra dollar will be sucked back.
In socialist France in the 80s, it was called relance par la consommation :
Regrowth thru consumption..see where it has lead.and where Germany adoption is leading them now..
And they tried to hide themselves behind the euro
Anyway, interesting debate

 

[tech/a]

Sure it takes a while: generations even , look at Greece Italy France now and soon the US.a slow grinding of real economies turning into farces and freeloaded by parasites

Were sovereign powers now part of the EU with the paying back of funds problem.

And only one clear loser: the saver, the ant the " responsible" aka sucker.

Place savings into something. Money left as money will erode.

 

[divs4ever]

I read all these comments and can't see where people have understood the way it works.
It's not free money.
Its money which is injected into areas to create jobs where people earn a living and generate taxes.
As a business owner, I have to borrow funds to do that --- but I still do it as I know that to expand and grow I have to.

What do you think China Does --- supplies money to build its economy and it works --- massive growth.

In extraordinary cases and it could be argued that Hospitals, Eldercare, are in that lot fixing anything of this magnitude takes lots and lots of $$s It needs to be placed in the system where it is used by many. The Govt doesn't need to have it back it just writes it off but those funds are now moving through the economy as a whole, You, me, we all benefit.

It's happening now Where do you think Russia gets its money from. It hasn't ground to a halt groveling in Bankruptcy.

Anyway back to the grind.

with MMT

in THEORY , they are borrowing future earnings ( productivity) , now ( again ) in theory , that is fine if used wisely AND with restraint ( best of luck with politicians and bureaucrats on that )

in Australia , for example you could create the cash for say nuclear power plants or a widespread hi-speed rail network , and the resultant savings and productivity benefits will make in all worthwhile ( and maybe even a profitable asset , so it self-funds the debt created )

now sure as a business person you have to do a lot of thinking and planning before you go looking for extra capital ( or credit ) a government on the other hand is more worried about the next election ( if they are out of power , no debt collector comes knocking on THEIR door , it is the tax-payer that receives the bill for failed projects

now the OTHER problem with MMT is once it is accepted as 'easy credit ' ( and potentially limitless ) the oversight of spending becomes as loose as the monetary policy ( see the US , currently )

and of course once the public ( and investors ) lose trust in the government and currency .. it is game over

 

[wayneL]

Elephant in the room, and I know this is overly simplistic and that MMT does purportedly have some checks and balances on this...

But why not just create a trillion, trillion dollars cancel taxes, have completely free advanced healthcare, ample pensions, free University education... Free everything.

Ubt $5,000 a week, whores, coke, cigars and Dom Perignon for everyone?

Ok I am using hyperbole to make a point but what would be the obvious result?

I think we all know the answer to that, and and if you think about it it's the same answer to a less elaborate version of MMT

 

[qldfrog]

Elephant in the room, and I know this is overly simplistic and that MMT does purportedly have some checks and balances on this...

But why not just create a trillion, trillion dollars cancel taxes, have completely free advanced healthcare, ample pensions, free University education... Free everything.

Ubt $5,000 a week, whores, coke, cigars and Dom Perignon for everyone?

Ok I am using hyperbole to make a point but what would be the obvious result?

I think we all know the answer to that, and and if you think about it it's the same answer to a less elaborate version of MMT

That's why a moderate version of mmt is acceptable after a financial crisis, a war : Marshall plan or other disasters:
Throw money, build rebuild productivity tools even seed funding for startup etc but this has to be a temp solution, not a perpetual helicopter money universal income style.
It can be agreed that governments at least in the west are biased into pleasing electorate now, not growing the country.so mmt is doomed in the west whereas it is the base of a benevolent dictatorship aka Singapore
I would even say many western politicians do not give a sxxt about the country.look at covid and qld wa responses here..
Anyway....all good

 

[wayneL]

That's why a moderate version of mmt is acceptable after a financial crisis, a war : Marshall plan or other disasters:
Throw money, build rebuild productivity tools even seed funding for startup etc but this has to be a temp solution, not a perpetual helicopter money universal income style.
It can be agreed that governments at least in the west are biased into pleasing electorate now, not growing the country.so mmt is doomed in the west whereas it is the base of a benevolent dictatorship aka Singapore
I would even say many western politicians do not give a sxxt about the country.look at covid and qld wa responses here..
Anyway....all good

Fair enough and I agree in that situation.

But in such temporary situations can we rightly term this as modern monetary theory?

I think this could be broadly fall under the terms of keynesianism (even if the complete Keynesian program is never invoked, and it never is)

This is part of the problem of the juxtaposition between government and economics. No government adheres to any complete economic theory at all and always goes for the politically expedient solution... What I like to call Frankenomics...

Sometimes Keynesian, sometimes laissez-faire, sometimes classical sometimes the "Neo" versions of each, but always that which facilitates winning the next damned election... And always at the expense of our overall future economic health.

 

[tech/a]

And always at the expense of our overall future economic health.

How?
We don't have to pay back Money written off
They print---use ---- write off who owes what?

 

[wayneL]

How?
We don't have to pay back Money written off
They print---use ---- write off who owes what?

Well that is a quite a complicated question which would require quite a long answer. A better question would be "how, and to whom"?

Who benefits and who is negatively infected by the flow-through?

The financially savvy will always find a way to benefit from any situation and I think most of us here will probably be able to do that.

As such, you are probably viewng things from your own personal situation and to be honest none of this worries me in the slightest I think I will be able to take advantage what happens (hopefully).

Consider the effect of rampant inflation upon the average working slob who is not particularly financially educated, or the elderly and risk averse.

 

[Captain_Chaza]

with MMT

in THEORY , they are borrowing future earnings ( productivity) , now ( again ) in theory , that is fine if used wisely AND with restraint ( best of luck with politicians and bureaucrats on that )

in Australia , for example you could create the cash for say nuclear power plants or a widespread hi-speed rail network , and the resultant savings and productivity benefits will make in all worthwhile ( and maybe even a profitable asset , so it self-funds the debt created )

now sure as a business person you have to do a lot of thinking and planning before you go looking for extra capital ( or credit ) a government on the other hand is more worried about the next election ( if they are out of power , no debt collector comes knocking on THEIR door , it is the tax-payer that receives the bill for failed projects

now the OTHER problem with MMT is once it is accepted as 'easy credit ' ( and potentially limitless ) the oversight of spending becomes as loose as the monetary policy ( see the US , currently )

and of course once the public ( and investors ) lose trust in the government and currency .. it is game over

Please !!
Can I exit this thread and get no further emails