Skip to main content

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

Comment Preferences

  •  Here's some econ 101 :-) (0+ / 0-)

    what reason is there that the government doesn't simply print up $15 trillion tomorrow and wipe out the national debt?

    Doing this would not wipe out the national debt. It would merely transform it from bonds to dollars. It would be like replacing all the hundreds with two fifties. Big deal.

    You don't understand FDR's basic MMT/Keynesian/Institutionalist/Chartalist point.  Government debt is government currency & vice versa.

    Of course there are constraints. But not abstract financial constraints. "Governments simply wish money into existence and that's that" is absolutely correct.

    The problem is that Econ 101 basically has taught pure shit to undergraduates for the last 30 odd years. I studied a bit of econ in the late 70s, stopped because there was too much nonsense in it. Looked at recent textbooks, and saw that the shit had completely taken over. A lot of the work of the MMTers is simply cleaning away this shit.

    Gold & silver never really backed currencies. Intrinsically valuable fiat currencies backed these rather worthless commodities, driving them up to ludicrous prices. FDR knew this, which is why he went off the gold standard, to all intents and purposes converting money back to what it always was, fiat money, credit. Gold is valuable because you can get dollars for it, not vice versa -something gold mine owners know very well.

    The true backing was the tax system & government spending, creating a monetary economy, where commodities were traded for credit = money. The responsibility of the government is that its credit=money does not inflate with respect to consumer goods.

    It is tragic that adults have been brainwashed into the preposterous, psychotic belief that governments do not have an infinite nominal spending capacity - what I meant by an infinite amount of money, what Mosler & pivy mean by neither have nor not have.

Subscribe or Donate to support Daily Kos.

  • Recommended (150)
  • Community (65)
  • Elections (43)
  • Civil Rights (38)
  • Culture (32)
  • 2016 (32)
  • Baltimore (28)
  • Economy (27)
  • Texas (27)
  • Law (27)
  • Bernie Sanders (26)
  • Environment (26)
  • Hillary Clinton (24)
  • Labor (23)
  • Health Care (21)
  • Rescued (21)
  • Barack Obama (20)
  • Republicans (18)
  • International (18)
  • Freddie Gray (17)
  • Click here for the mobile view of the site