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View Diary: Insolvency, tax cuts, military spending and social security (188 comments)

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  •  Countries that print their own currency... (3+ / 0-)
    Recommended by:
    Kickemout, AmericanAnt, hmi

    ...implode all the time, look at Weimar Germany. They tried to print themselves out of the mess they were in and ended up using wheelbarrows of cash to buy food.

    The thing to remember is that foreign investors don't give a rats ass about dollars. What they want is stuff. They send us 100 TVs, they want 105 back at some point. That's why you invest.

    I agree that the US does not look like it's going to collapse anytime soon, but neither did Greece...

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Tue Apr 24, 2012 at 09:16:55 AM PDT

    [ Parent ]

    •  Look at Weimar Germany!!! (17+ / 0-)

      Yes look at it.

      They wanted their currency to implode for a reason. You know it. I know it.

      Please, let's be real.

      The rest of your comment seems divorced from reality imo.

      Investors DO want dollars. They want security. For crissakes, people are buying US binds guaranteeing an investment loss.

    •  um no (9+ / 0-)
      The thing to remember is that foreign investors don't give a rats ass about dollars.
      They certainly care.  They were reluctant to keep buying during the dollar's decline in 2007 but have resumed.

      -You want to change the system, run for office.

      by Deep Texan on Tue Apr 24, 2012 at 09:49:07 AM PDT

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      •  They care... (0+ / 0-)

        ...because they have the impression that dollar = stuff and a dollar in the future will give you the same amount or slightly more stuff than today. (More precisely, that the dollar is the best option as a store of value as opposed to others).

        As soon as they get the idea that dollars do not equal stuff, they all leave and the economy implodes.

        The more money you print, the less stuff you imply every dollar will buy.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Tue Apr 24, 2012 at 03:21:07 PM PDT

        [ Parent ]

        •  Nope, you assume full employment implicitly here. (1+ / 0-)
          Recommended by:
          Deep Texan

          The more money you print, the less stuff you imply every dollar will buy.

          IF that were all that would happen. But this makes utterly invalid full employment (& completely accommodated savings desire) assumptions. At times like now, when the economy is starved for money, helicopter-dropping money would cause more creation of real stuff than the money represents.  

          Printing money for a JG at a reasonable living wage for doing sensible things would be highly disinflationary in the USA, because it would crowd out a lot of insane, inflationary spending supported ultimately by government welfare, targetted to the rich.

          What can "they" -  foreign investors - do if they think they will get less stuff? All they can do is spend their money in the USA . If they spend so much that they cause inflation in the USA, they are cutting their own throats.

          Like Big John Connally said, "the dollar is our currency and your problem" (if they want to make it a problem).

    •  They imploded because of the gold standard (9+ / 0-)

      and a crazy monetary policy.

      Q: when did Germany return to growth?

      When Hitler reneged on Germany's debts and started a massive stimulus policy of building in the 1930s. You should look at the rip-roaring 1930s (especially late 1930s) in Germany when they were printing money left and right and had a great economy.

      If Hitler hadn't been an evil monster, he'd be thought of as the FDR of Europe for his Keynesian policies.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Tue Apr 24, 2012 at 10:00:24 AM PDT

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      •  Foreign-denominated debt was the killer (1+ / 0-)
        Recommended by:
        upstate NY

        More precisely, they imploded because the debts were denominated in gold or foreign currency. Such a debt can go to infinity measured in domestic currency. Germany had no alternative.

        Responding to Sparhawk - of course "foreign investors ... What they want is stuff."  is true But the point is that the foreign investors have no legal claim for "stuff" if they hold a fiat debt. MMT economists support a JG which would put an economy on a labor standard - in effect making the foreign investors have the right to be provided with the produce of quantities of unskilled labor in the domestic economy.

        In normal situations, this is the perfect anti-inflationary way to balance creditor & debtor rights. MMT policies would be very deflationary in the USA - see my reply to Sparhawk in another thread.

    •  You again? (1+ / 0-)
      Recommended by:
      pot

      I can only conclude that you are so very fond of your 1% exceptionalist authoritarian talking points that you have an unquencable compulsion to inflict them on the rest of the communtity; our reactions be damned.

      Get help.

      "What have you done for me, lately?" ~ Lady Liberty

      by ozsea1 on Tue Apr 24, 2012 at 12:53:34 PM PDT

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      •  Good progressive policy (0+ / 0-)

        Means actually understanding economics.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Tue Apr 24, 2012 at 01:48:58 PM PDT

        [ Parent ]

        •  really? (2+ / 0-)
          Recommended by:
          ozsea1, pot

          coming from someone who thinks deflation is just a minor inconvenience?  I've never taken an economics class, but I understand it better than you do.

          •  Deflation... (0+ / 0-)

            ...is the cure, rather than the disease.

            I hate analogies, but it's analogous to a heroin withdrawal. Sure, not having heroin is incredibly painful and giving more heroin certainly makes you feel better in the short term, but in the long term you have to get off the stuff (i.e. allow the economy to deflate down to sustainability).

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Tue Apr 24, 2012 at 02:50:59 PM PDT

            [ Parent ]

        •  LOL (0+ / 0-)

          I understand economics very well, even liberrtarian economics.

          Typical.

          "What have you done for me, lately?" ~ Lady Liberty

          by ozsea1 on Tue Apr 24, 2012 at 02:21:06 PM PDT

          [ Parent ]

        •  But the problem is (1+ / 0-)
          Recommended by:
          ozsea1

          That you don't, but think you do.

          Not your fault, it's a  worldwide dark age of economics. Studied a bit of econ back in the late 70s & early 80s. Some good, interesting stuff, but too much gibberish that simply didn't make sense.

          Got a big shock when I opened up some recent textbooks. All the true, interesting stuff had been purged, while the gibberish had grown like cancer. Laughable, psychotic ideas like Ricardian equivalence & government budget constraints were taken seriously and pretend-proven.

          In the interim, the enormous weight of gibberish innumerate neoclassical, pseudomathematical quackonomics propaganda had become so enormous I had started believing a little in its insane ravings. Some of the same things I had rejected before and stopped studying econ because of. Read some Keynes in the 70s, but not Lerner, hadn't heard of him - who fixed Keynes's confusions and made him clearer.  

          A lot of the work of the MMTers is just cleaning up the absolute shit that dominated the last few decades, and just writing down carefully the things that everyone used to know, that went without saying, that hence nobody ever said. Such retrogressions, such amnesia in science are much more common than most people think, although economics is a pretty extreme case.

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