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There's been a lot of talk about the fiscal cliff, a "deficit crisis," and what Obama should do for the economy given the impossibility of working with the Republican House.   I think that it's important in times like this to think about how government finance really works.

1 – The government creates money by spending it.  Every time the Treasury writes a check to a government supplier or employee, it is creating money.

2 – The government destroys money by taxation.  Every dollar that is collected by the IRS and the other various tax-collecting agencies of the United States of America is destroyed.  It simply disappears.

3 – The government subsidizes savers by creating interest-bearing Treasury Bonds.  These bonds give private savers a safe place to put their money, and the interest rate paid on these bonds makes them more or less attractive to savers.  Higher interest rates means a higher rate of government subsidy to lazy investors.  By doing this, the government can encourage them to take their private money out of the economy, and thus discourage inflation by destroying demand.  Or, by lowering interest rates, it can encourage them to find other, better-paying investments, and thus hopefully encourage economic activity by stimulating demand.

4 – There is no direct connection between these three activities.  Tax revenues do not fund spending any more than Treasury Bonds fund government spending, because the Treasury of the United States is infinitely solvent in US Dollars and can create as many of them as it wants, at any time, for any reason.  

5 – The real purpose of taxation is to give value to the US Dollar.  People need dollars to pay their tax liabilities.  A secondary purpose of taxation is to destroy money in the hands of private persons, thereby destroying demand and discouraging a variety of activities.

6 – A common argument against deficit spending is that it will cause inflation.  But what is inflation, anyway?  Current measures of inflation almost exclusively define it in terms of wages and prices - that is, the evil and bad inflation is almost exclusively defined as a rise in wages. Asset price inflation - that is, the rise in stock prices, investment values, and real estate value - somehow is not included in the common measures of inflation.  Strangely enough, those are the kinds of things the 1% happen to own.

7 - Government spending (that is, monetary creation) creates wage/price inflation if those government dollars are being used to buy things that are in short supply. If it's being used to buy up things that are sitting around idle, such as the labor of teachers, then it's not going to be inflationary.

8 - The destruction of money via taxation should never be thought of as "funding" the government in any way, but rather as a way to reduce inflationary pressures and to manage economic actions. Taxation should really be targeted at those areas of the economy where too much money has built up, and thus which might be able to create inflationary economic distortions. For example, massive inherited incomes and ridiculous CEO pay that, in the search for easy returns, fuels the Wall Street casinos and thus creates asset price inflation.

9 – The National Debt, that is, the total of all outstanding Treasury Bonds, is a tool to manage the behaviors of savers and investors.  As the Treasury is infinitely solvent, all decisions about the size of the National Debt should be made with particular economic and behavioral goals in mind.  There is no reason at all to connect the rate at which Treasury Bonds are created to either tax rates or spending levels, except in terms of the larger economic goals of the government as a whole.

The upshot of all this is that all this talk of government deficits and a ballooning national debt is pure delusion.  Too many people think of money as if we were still on the Gold Standard, and it was possible in some way to "run out" of money.  The only real limit on government spending is the capacity of the American economy and American workers to produce the goods and services the government and the private sector wish to consume.  So long as there is mass unemployment, we are nowhere close to reaching the limit of that capacity.

Given all that, what would the best possible solution to another standoff over the debt ceiling?  Honor it, stop issuing Treasury Bonds, but keep on spending just like before.  

Think about it another way – if the government really ran a budget surplus, that would mean that the government is draining money out of the private economy every year, and destroying it.  What possible purpose could that serve?  How would a vampire state such as this be desirable in any way, shape or form?  It is much better to think of the government as the life-giving sun, providing an endless supply of energy for human activity.

If all this is true, then why are so many people so committed to the false and destructive idea of a balanced budget?  Part of it, of course, is pure ignorance.  Many people simply don't realize the difference between a government with a sovereign currency and a household on a fixed income.  However, in my opinion, at least a few people out there don't want the government to add money to the system unless it's going to them.  They want to have all the money, and to maximize their relative position in comparison to the ordinary citizen.  It's not enough to be rich – they want to be a new class of feudal lords, and to use their total monopoly over private money and private credit to make everyone else grovel before them.  But they can't do that if the government is out there, creating money and giving it to the people who need it, and thereby stimulating economic independence.  They don't want an independent and healthy private economy – they want their own bank account to be the sum total of the economy, and the people to be a mass of indentured servants.

These are not my ideas, but rather my understanding of a new and exciting branch of economics, called Modern Monetary Theory.  Instead of creating abstract models based on assumptions of human behavior that are obviously false, the leading scholars of Modern Monetary Theory have studied what banks and the government actually do.  Look it up on Google for yourself if you're interested.  I learned by reading and participating in years of discussion at one of the smartest places on the internet, the European Tribune.

Originally posted to Zwackus on Fri Nov 09, 2012 at 11:05 PM PST.

Also republished by Money and Public Purpose, The Royal Manticoran Rangers, and Keynesian Kossacks.

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Comment Preferences

  •  Post and Run (3+ / 0-)
    Recommended by:
    Roby NJ, psyched, Roger Fox

    Time zone and schedule mandates a post and run, but I'll check in, answer questions, and participate in discussion as possible.  Sorry all.

    `Under my command, every mission is a suicide mission.`

    by Zwackus on Fri Nov 09, 2012 at 11:07:10 PM PST

  •  Modern Monetary Theory (3+ / 0-)
    Recommended by:
    johnny wurster, grasshopper, nextstep

    is also known as chartalism, and isn't regarded by noted economists as reverently as you do in your diary.  Perhaps you (and Mitchell and Mosler and Wray) are onto something.  Previous efforts I've made to make sense of this have failed, not because I don't understand the theories and tautologies, but because I can't see it working in the "reality" of the market system.

    And many renowned economists have rejected these theories.  One of my favorite economists, Paul Krugman (who argues strongly and convinvcingly against a "fiscal cliff") calls MMT "just not right."  If Krugman rejects MMT, I'm loathe to accept it myself. . .

    I'm nonetheless supportive of your introduction of this economic zeitgeist to DK, and I intend to continue struggling with it.  In all fairness to those with whom you wish to discuss/debate these issues, however, I believe you should not only identify these theories as the work of others (which you do successfully), but also acknowledge that these are radical, eccentric and idiosyncratic views, which are not accepted by most established economists.  (And, you should remove the apostrophe from deficit's in your title.)

    •  They may be "radical, eccentric, and (4+ / 0-)
      Recommended by:
      arendt, grasshopper, psyched, jellyyork

      idiosyncratic views" to you, and you may accept them along with "most established economists," such as Krugman, but you seem to ignore that Krugman is at war with "most established economists," and you seem to ignore that, when challenged to explain why he thinks MMT is "just not right," Krugman says nothing. I have followed what little conversation exists between Krugman and the champions of MMT and he will not answer their questions. These questions are polite, well-stated, and to the point. Krugman, whose defense of Keynesian economics I agree with, is nevertheless testy and easily offended. In many ways he is the classic economist: he rejects any criticism.

      It would be better for you, it you want to contribute to the advancement of national economic policy, to analyze the strengths and weaknesses of MMT as you see them. Otherwise your remarks, apart from the punctuation correction, are of no value, except perhaps they may make you feel better, and that, at least, is something.

      Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

      by hestal on Sat Nov 10, 2012 at 02:56:14 AM PST

      [ Parent ]

      •  Hmmm. I think not. (1+ / 0-)

        Although you state

        you may accept them along with "most established economists". . .
        you've missed that I do not accept them, and it seems few "established economists" do, either.

        In my response I say

        I'm nonetheless supportive of your introduction of this economic zeitgeist to DK, and I intend to continue struggling with it.
         In telling me
        It would be better for you, it you want to contribute to the advancement of national economic policy, to analyze the strengths and weaknesses of MMT as you see them.
        you seem to miss that I am already doing that.  Indeed, I spoke of "Previous efforts I've made to make sense of this. . ." so I deny that I am questioning (or rejecting) MMT without consideration.

        What I am calling Zwackus on is his offering these views of the economy as essential definative truths, when they are not.  I love a good paradigm-impugning theory, and thrust them into arguments with some regularity.  But I usually try to identify them as such.  That is what I want Zwackus to do.

        •  I did not overlook that you "do not" (2+ / 0-)
          Recommended by:
          psyched, jellyyork

          accept them. Because you like to correct others so much I thought that this early "error" would, when you detected it, make you happy.

          You missed, actually you deliberately neglected, to respond to the point about Krugman. He is at war with most of the "established economists" in America; there are only a handful who support him. So you cannot have it both ways. You cannot claim both Krugman and established economists as authorities because Krugman has lambasted them repeatedly as being fools. So, take your choice.

          I take Krugman as more of an authority than "established economists." But his irritability is a problem for him. He has made claims about the leaders of MMT that are demonstrably false and when pressed on it he refuses to respond--probably because he has no response. In addition comments he has made in the past year, often as asides, indicate that he is rethinking the importance of deficits. It would be like him to try to claim the ideas of MMT as his own if he could. He is after all a very ambitious man.

          Furthermore, you need to read Krugman's economics textbook which he indirectly promotes in his writings. You will find that he is confusing and confused, a hallmark of someone who is still laboring with his ideas. This is not surprising because modern economics is a mess, and MMT is the sensible way to go. So, rather than fine tune modern economic thought, MMT will replace it altogether.

          Argument from authority, which you seem to love dearly, has been historically a failure.

          Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

          by hestal on Sat Nov 10, 2012 at 04:45:12 AM PST

          [ Parent ]

          •  I'm a shrink, not an economist. (0+ / 0-)

            I am a latecomer to politics, and have been even more neglectful of economics most of my life.  I had a client once who lent me MMT-based books, and I tried to make sense of them, but really couldn't see their mechanisms and dynamics operating in "the real world."

            Perhaps you could suggest 2 books: one that explains MMT to an intelligent layperson, and another by Krugman that can help me see his confusion (which I've never recognized)?

            •  It is a very good thing to be "not an (2+ / 0-)
              Recommended by:
              arendt, psyched

              economist." Congratulations.

              I am a mathematician, well actually more of an arithmetician, and as a lifelong hobby, I have tried to understand economics. I was frustrated. I could not make sense of it. Because I have been able to understand almost everything else of institutional importance in our nation I could not understand why I could not understand economics. Either I was stupid (a real possibility) or economics did not work. I was encouraged, however because I learned to trust my instincts over the years, and once I assumed that economists were wrong in many important ways the world made sense again.

              My problem with economics is that it is of little use. There is no agreed upon way to apply it to the lives of the People. Therefore, to me, it was and is a waste of time. MMT, on the other hand, makes sense if considered in isolation, removed from the current economic structure. If MMT had been tried first, modern economics would have never been developed.

              But MMT suffers from lack of a coherent narrative. It suffers from a lack of nuts and bolts illustrations. It suffers from lack of a rounded picture of the national economy should it be implemented. You and I and others like Zwackus and letsgetitdone could be helpful in developing such a picture. There is a story to tell here. What is MMT, what will it do for the People if it is implemented, and how do we get from here to there are necessary chapters in that story. We know where we stand—current economic theory is a gross failure, all over the earth, and throughout the known universe.

              Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

              by hestal on Sat Nov 10, 2012 at 05:26:27 AM PST

              [ Parent ]

              •  My economics professor client. . . (0+ / 0-)

                . . . told me that people who grasp mathematics and understand human behavior are generally incapable of making sense of economics.  That was 6 years ago.  Apparently, the complexity and polarization of financial systems have increased so severely, confusion is even more prevalent these days.  

                Hestal, I'm still hoping you'll suggest some reading for me:

                Perhaps you could suggest 2 books: one that explains MMT to an intelligent layperson, and another by Krugman that can help me see his confusion (which I've never recognized)?
                •  "Seven Deadl Innocent Frauds" by Mosler is a good (2+ / 0-)
                  Recommended by:
                  arendt, psyched

                  book to get started.

                •  And he was wrong. Our Constitution was (1+ / 0-)
                  Recommended by:
                  psyched

                  designed to deal with human behavior. James Madison said in Federalist 10 that the principal design goal of the Constitution was to control the effects of faction. He went to the trouble to define faction. He was precise. He did not want his readers to misunderstand. Madison said:

                  By a faction, I understand a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.
                  Factions, by Madison’s definition, are always bad things. Factions are made up of human beings, and they always work against the common good. Because any social organization reflects the nature of the humans who control it, the men who form factions are therefore naturally inclined to work against the common good. There is a more benign definition of faction that is in common use today. Many people seem to think of faction as simply a quarrelsome subset of a political party, sometimes irritating, other times worrisome, but rarely dangerous. That form of faction is like a wart on the back of one’s hand. But Madison’s form of faction is a cancerous tumor growing in one’s body that, if left unchecked, will kill its host.

                  But not all human beings are inclined to form factions, not all humans are inclined to work against the common good. Other humans naturally work for the common good. Economists, when they talk of human nature, never take this fact into account. There are two varieties of humans: Varietas Tyrannica and Varietas Democratica. As their names imply they will take different paths in response to the same stimuli. Economics has no room in its theology for such differences in behavior. Because of this fact, economic theory is built on sand.

                  Call your professor and ask him what has happened. Our economic situation is in a mess. Is it due to a lack of understanding of mathematics, or a lack of understanding of human nature? Something sure as hell happened.

                  Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                  by hestal on Sat Nov 10, 2012 at 06:17:58 AM PST

                  [ Parent ]

                  •  Reminds me. . . (0+ / 0-)
                    There are two varieties of humans
                    . . . of an old adage among psychologists.  There are two types of people in this world: those who divide people up into two groups, and those who don't.  
                    •  Sure, make a joke, but there are many others (1+ / 0-)
                      Recommended by:
                      psyched

                      who agree with my idea. For example, Jimmy Carter defines Varietas Tyrannica in his book Our Endangered Values, John Quincy Adams described them in 1820 after a meeting with James Monroe and John C. Calhoun in which slavery was discussed at length, I. W. Charny, a psychologist, wrote a book about them. He describes them as people with a democratic mind and people with a fascist mind. Lord Acton famously talked about V. Tyrannica. John W. Dean wrote about tyranni in Conservatives Without Conscience, and Martha Stout a psychologist who teaches at Harvard wrote about them in her book, The Sociopath Next Door. The American Psychiatric Association describes them as having Antisocial Personality Disorder or Narcissistic Personality Disorder. Charles Darwin wrote that varieties of species are natural and necessary.

                      If Charles Darwin were still alive, I think that he would say that Edward O. Wilson is one of those “naturalists having sound judgment and wide experience,” that we should listen to. Wilson has written many important books on various topics concerning evolution. His latest, The Social Conquest of Earth, may well be his most important. In it, he explains how human evolution has resulted in a fundamental conflict between behaviors that favor the success of the individual human and behaviors that favor the success of groups of humans. He says that these two conflicting behaviors have a genetic basis:

                      Alleles (the various forms of each gene) that favor survival and reproduction of individual group members at the expense of others are always in conflict with alleles of the same and alleles of other genes favoring altruism and cohesion in determining the survival and reproduction of individuals. Selfishness, cowardice, and unethical competition further the interest of individually selected alleles, while diminishing the proportion of altruistic, group-selected alleles. These destructive propensities are opposed by alleles predisposing individuals toward heroic and altruistic behavior on behalf of members of the same group. Group-selected traits typically take the fiercest degree of resolve during conflicts between rival groups.
                      Wilson’s conclusion is that this conflict, this struggle between two kinds of humans, has only one outcome:  
                      An unavoidable and perpetual war exists between honor, virtue, and duty, the products of group selection, on one side, and selfishness, cowardice, and hypocrisy, the products of individual selection, on the other side.

                      … In summary, the human condition is an endemic turmoil rooted in the evolution processes that created us. The worst in our nature coexists with the best, and so it will ever be. To scrub it out, if such were possible, would make us less than human.

                      I can think of no better description of our present predicament. The Darwinian struggle has long been with us. The best we can do is to do our best. We must control the adverse effects of tyranni, we must control the adverse effects of factions—we must work for the common good.

                      So, is our current economic mess a result of the failure of economists to understand mathematics or the failure of economists to understand human nature?

                      Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                      by hestal on Sat Nov 10, 2012 at 08:19:18 AM PST

                      [ Parent ]

                      •  See also (1+ / 0-)
                        Recommended by:
                        psyched

                        Political Ponerology

                        Like a color blind man incapable of distinguishing red from green, a small minority of the human population cannot experience or fully comprehend the normal range of human emotions. And like those color blind who may conceal their condition by using the correct words while not understanding their meaning (e.g., the top traffic light is “red”, the bottom is “green”) - so does this minority conceal their condition by playacting an emotion's exterior signs (facial expressions, exclamations, body language). However, they do not actually experience the emotion in question. Their deception is revealed in the laboratory, where they respond to words like DEATH, CANCER, DISEASE, as if they were DAY, CREAM, or PAPER. They lack the ability to comprehend the emotional “punch” that certain words contain. They use others’ emotional reactions as cues, and they adjust their behavior to portray the correct ‘emotional’ behavior. (Hare, 129-30)

                        These individuals are known as psychopaths. Not only can they not feel the pain of others, they often seem to deliberately cause others pain. Lobaczewski refers to this disorder as an “essential psychopathy” to distinguish them from others with deficits in their genetic/instinctual endowment, essential psychopathy being the most severe and disturbing.

                        Many so-called “antisocial individuals” acquire similar characteristics in their life-time, whether caused by brain damage to certain areas of the brain, or functionally, because of close contact with and influence by such individuals. Lobaczewski terms such individuals characteropaths. The vast majority of both these groups cannot change. The acts that we call evil (especially on a macrosocial level) can be traced back to this deviant minority of human beings and the effects of their actions on their family, friends, and society.

                •  About books. I am still looking for a good one. (1+ / 0-)
                  Recommended by:
                  psyched

                  I have tried a couple and I have read various blogs, but there is a real lack of coherence.

                  Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                  by hestal on Sat Nov 10, 2012 at 06:19:36 AM PST

                  [ Parent ]

                •  Hey Doc, I'd approach the Krugman vs. MMT this (4+ / 0-)
                  Recommended by:
                  arendt, hestal, psyched, jellyyork

                  way:  They agree about the really important basics from a non-economist's point of view -- like me.

                  Krugman agrees that we're not on the gold standard.

                  He agrees that every dollar is both a public liability and a private asset.

                  He agrees that the US is  a currency sovereign of a fiat currency with a floating exchange rate.

                  What made the MMT vs. Krugman debate even more confusing is that he began arguing with MMT, then argued with Steve Keen, the king of private bank credit creation.

                  So you might want to google Steve Keen as well.  In simple terms, he studies the ways in which private banks create money and it's impact on the economy.

                  The problem with classical economics (which Krugman fits into) is that it ignores things like money and banking.  Really.  Weird.  But there you have it.

                  Steve has given many interviews and video presentations, he's a pretty clear speaker.

                  Be warned:  You'll at first think MMT is weird cuz you've been conditioned to think within a gold standard paradigm, and being a psychologist, you know how difficult it is for the brain to accept a paradigm shift.

                  However, once those new connections are formed, then MMT makes obviouse sense -- at least in it's fundamentals.

                  Like --  The US can never go broke.  Seems odd considering  all the talking heads exploding over our debt crises.  But then.....  just like you could never go broke if you had a dollar making machine in your kitchen, neither can the US.

                  •  THANKS! (1+ / 0-)
                    Recommended by:
                    katiec
                  •  Krugman's a deficit dove (3+ / 0-)
                    Recommended by:
                    Zwackus, katiec, psyched

                    He believes in long-term deficit reduction. He just doesn't want to start now.

                    The MMT deficit owls believe that fiscal policy needs to be measured by its concrete impacts on real things like full employment, price stability, poverty, crime rates, family disintegration, innovation, inequality, community development, and other aspects of public purpose, and this means that long-term plans aimed at reducing the deficit or creating surpluses are fiscally irresponsible because they aren't aimed at anything that matters in itself. They're just improper criteria for evaluating fiscal performance in light of the fact that governments with sovereign fiat currencies have no limits when it comes to money creation.

                    •  Yes, that's it exactly (2+ / 0-)
                      Recommended by:
                      katiec, psyched

                      Taxation is not a source of funds, it's a tool to manage economic behavior and destroy dangerous accumulations of wealth.

                      A budget deficit is not a problem, it's a tool to create macroeconomic demand.

                      A budget surplus is not a goal, but a tool to deflate an over-heating economy.

                      The national debt is not a problem, it's a tool to regulate the capital markets.

                      Inflation is not a problem, it's a tool, though one rarely needed.

                      Deflation, however, is pretty much always a problem.

                      `Under my command, every mission is a suicide mission.`

                      by Zwackus on Sat Nov 10, 2012 at 09:57:06 PM PST

                      [ Parent ]

              •  First we need get the facts straight, then build (3+ / 0-)
                Recommended by:
                hestal, psyched, jellyyork

                theory.

                Because most people still talk as though we're on the gold standard, it's most imperative to get the simple fact that this changed in 1972 out there.

            •  Hey DocChap, I don't know how to provide links, (5+ / 0-)
              Recommended by:
              hestal, arendt, grasshopper, psyched, jellyyork

              but....

              If you go to a blogspot called "New Economic Perspectives" you'll find a wealth of info. on MMT, including a Primer written by Randall Wray.

              New Economic Perspectives is run by Stephanie Kelton.  She's great, easy to understand.  You can google her and find presentations she's given.

              There's also a group here called "Money and Public Purpose" which has lots of good diaries.

              Finally, MMT is 2 things:  a description of how our monetary system works, including how national accounting works, and then it's  prescriptive as well.  

              Krugman actually agrees with a lot of MMT.  It's when you start to get into the particulars that there's disagreement.  One of the disagreements that Krugman and MMT have had is how private banks work.  MMT says that banks make loans first, then find reserves.  Krugman wants to believe that banks lend out their reserves -- though the debate seemed to end with Krugman concedeing that this is probably no longer the actual case.  But then he just shut down the debate.

              Anyway -- Alan Greenspan, Bernanke and Geitner are all on record as stating that the US cannot run out of dollars.  And this simple little fact is where people thinking about this issue needs to begin, cuz the deficit terrorists want us to believe that money is in short supply.  

              Whereas the reality for the US is that it can't run out of dollars anymore than-- in Geitner's words -- a "bowling alley can run out of points".  Cuz dollars are no longer a thing (a commodity like when we were under the gold standard), but rather are now merely a unit of account, like inches, or points at a bowling alley.

              •  Well said, katiec. nt (2+ / 0-)
                Recommended by:
                katiec, psyched

                Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                by hestal on Sat Nov 10, 2012 at 05:38:09 AM PST

                [ Parent ]

              •  THANKS! I'll check these out! n/t (1+ / 0-)
                Recommended by:
                psyched
              •  Your opinion, please. . . (0+ / 0-)

                on this:

                http://www.sltrib.com/...

                It makes a great deal of sense to me, and I've been linking it in comments here and forwarding it to friends and family for the last 24 hours.  

                Isn't Krugman. . . uh, right about the "fiscal cliff" (referred to elsewhere here as Boehner's Bluff and the Repub Ramp)?

                •  I agree, so does MMT :) (1+ / 0-)
                  Recommended by:
                  psyched

                  Jamie Galbraith has a great article up at Salon -- he's not an MMTer, but accepts MMT description of our monetary and national accounting reality.

                  There was a diary about his article yesterday that was very good.

                •  It makes sense to me. (0+ / 0-)

                  But he is talking about political strategy, not economics, right?

                  Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                  by hestal on Sat Nov 10, 2012 at 06:23:58 AM PST

                  [ Parent ]

                •  Yes, he is (2+ / 0-)
                  Recommended by:
                  katiec, psyched

                  But MMT people have published a huge number of posts on the phoney fiscal cliff crisis for some time now. You can find some of them on the Money and Public Purpose blog I've linked to above. We've been warning about it for months and months.

                  Krugman's latest post approaches the MMT line of reasoning very closely, in certain respects. But he wouldn't agree with us about what to do in the longer run. What that means is that he gives away too much to Peter Peterson and the other fix the debt people, by being unable to deny that they have a legitimate concern about the debt-to-GDP ratio. We just say that doesn't matter a damn. Past deficits and accumulated debts have nothing to do with current fiscal capacity if you have a sovereign fiat currency like the US.

                  So, in any year, you go ahead with fiscal policy that will provide the best outcomes for full employment, price stability, and other valued outcomes.

              •  DailyKos Money and Public Purpose (2+ / 0-)
                Recommended by:
                katiec, psyched

                blog, is here. We've been blogging for some time now. And we re-published this very good post.

            •  Some good MMT (1+ / 0-)
              Recommended by:
              psyched

              links are included below by others. But the exchange with Dr. K has happened and occasionally still happens on line. Here's a link that reviews some of the previous controversies from an MMT point of view.

              You won't find it awfully polite or respectful. I'm respectful of good arguments; not previous achievements or reputation. That is, I think it's about what people say; not who they are, and that arguments from authority are a logical fallacy.

              Besides if a person's reputation is relevant to an argument, then that should be reflected in their argument. If it's not, then who they are hasn't helped them make their case anyway.

    •  It's eccentric only because most economists and (2+ / 0-)
      Recommended by:
      hestal, psyched

      pundits still talk as though we're on the gold standard.

      Krugman agrees with much of MMT.  The debates were about granular stuff, comparatively speaking.  One debate was about how private banks work, and while important, this point is less important that the simple fact that money is not a commodity in short supply, but merely a unit of account.

      And that, based in simple accounting, every dollar is  both a public liability and private asset.  This isn't  contraversial, just not understood by talking heads, pundits, and ignored by most economists.

      By the way the people who predicted the crises were mostly those who in some  way or another are stock flow analysts, ie, concentrate on how money runs through the system and how this flow affects balance sheets, ie, they pay attention of accounting, simple math.

      Dean Baker is one of those people.  He agrees with the descriptive aspects of MMT, though he doesn't call himself an MMTer.

      Also, Stiglitz agrees with the MMT description of national accounting.

      There are papers by both in their description of accounting matches up with MMT.

      It's really NOT essoteric -- just widely obscured by TPTB, either because of ignorance or, no doubt, because of political reasons.

    •  Latest MMT critique of Dr. K (2+ / 0-)
      Recommended by:
      katiec, psyched

      is here. Judge for yourself! DR. K won't get off his IS/LM shtick!

  •  MMT may be not quite right, but economists (7+ / 0-)

    that approve of using money as a tool to manipulate and subordinate human populations are supporting a moral wrong -- a wrong that is greater than that committed against persons prevented from learning to read and write so they would be shut off from the information necessary to improve their living conditions. Now that most everyone in the US has gotten hooked on money to mediate most of their trade and exchange of goods and services, restricting their access to money effectively denies them access to food shelter and clothing unless and until they subordinate themselves to someone else and do what they are told and that's a moral wrong, even when it is backed up by the law. We should not forget that perhaps the most significant contribution by Western civilization to jurisprudence was to declare slavery not just legal, but an hereditary status. Using money as an enforcer makes the enslavement less obvious because indirect, but more onerous because there is no way out. In the beginning, slaves were able to purchase their freedom. That's not possible to people denied access to cash and dependent on food stamps that have to be earned with a "work requirement."
    Money is a tool and, like all other tools, can be abused. Using money to subordinate humans is abusive -- I.e. immoral, albeit legal.

    THE SCARCITY OF MONEY IS A SCAM

    But don't take my word for it.
    http://www.youtube.com/...

    The title of the video is "Money is no object" and features Bernanke and Greenspan and Nixon.

    Nixon wanted to make it impossible for international speculators to hold the US economy hostage. He probably did not anticipate that our own Congress would do so in the interest of asserting their own powers vis a vis not only the executive branch, but the American people. Of course, in Nixon's day, government by the people was just an aspiration. It is interesting to note that Nixon loosed the dollar from the bonds of gold the same year universal suffrage for all adult citizens was achieved, 1971.
    Why would the Congress want to enslave the citizenry? Because, if the people truly govern, then the role of the legislative body is reduced to one of stewardship. That's quite a come- down for people who see themselves as rulers.

    We organize governments to provide benefits and prevent abuse.

    by hannah on Sat Nov 10, 2012 at 02:08:40 AM PST

  •  that all sounds sorta insane and cultish. (0+ / 0-)

    is that MMT?

  •  Jibbersish (2+ / 0-)
    Recommended by:
    Roadbed Guy, grasshopper

    It can work for a while, but ultimately no one will want the paper being printed by the government. Time after time in history we have seen this tried and it has always failed. Zimbabwe being a recent case. The only reason it is working for longer this time is because the US has the world reserve currency. If current policies continue this too will stop. Then we will see how good things remain.

    Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

    by taonow on Sat Nov 10, 2012 at 03:31:55 AM PST

    •  Partially True (8+ / 0-)

      Printing currency with no regard for the overall state of demand in the economy will lead to inflation.  Doing so while the state is, at the same time, running a trade deficit and taking on debts denominated in foreign currencies, will result in hyperinflation.

      At the moment, the United States economy is suffering from a massive dearth of demand.  Too much money has been hoovered up by too few people, and nothing the government has done so far has been enough to make that money start circulating again.

      In such a situation, radical adjustments to the overall flow of money through the economy are needed.

      Give the states the money they need to hire the civil servants they need.  Hiring social workers and teachers is not going to be inflationary anytime soon.

      Hire the health care workers needed to make health care truly available to everyone.  This is not going to be inflationary anytime soon.

      Spend the money to upgrade our power grid and power production infrastructure, and our transportation infrastructure.  This is not going to be inflationary anytime soon.

      Can unlimited government spending lead to runaway inflation and a total loss of value by the currency?  Yes, of course it can.  Will it always, in every situation, do so?  Not so much.  Monetary policy and fiscal policy need to match the times, and treating the creation of money as if it is always inflationary in every circumstance is no more appropriate than is running the printing presses nonstop rain or shine.

      `Under my command, every mission is a suicide mission.`

      by Zwackus on Sat Nov 10, 2012 at 04:13:05 AM PST

      [ Parent ]

      •  The difference (0+ / 0-)

        The difference is that the US dollar is the world reserve currency. This provides an extra buffer that delays the onset of inflation. It is clear in Asia that an inflation wave is building (having just spent time there talking to business people). It will still take time to get here but it is coming.

        The problem is that this discussion ignores the real economic problems that need addressing to build a sustainable recovery. (By that I mean real structural problems having to do with health care, demographics, defense, education etc).

        Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

        by taonow on Sat Nov 10, 2012 at 05:29:01 AM PST

        [ Parent ]

        •  Actually, once the simple facts of our monetary (6+ / 0-)

          and national accounting system actually works is known, then it's inevitable that we're lead to concentrate on precisely those things:  that is, the real economy.

          Once money is known to be what it IS -- a simple unit of account rather than wealth itself -- then looking at real  wealth is easier.

          The question of what to do about our elderly becomes:  "Do we have the resources to build housing, grow food, etc for our elderly?"

          Cuz the question of whether we can create marks on a computer screen is obviouse:  Of course we can.  And that's all money is, marks  on a computer screen.

        •  The fact that we're the reserve currency (2+ / 0-)
          Recommended by:
          katiec, psyched

          doesn't matter to basic MMT. Everything we say the US can do with its fiat currency, the UK, Australia, Canada, Japan, and other nations with their own sovereign fiat currencies can also do.

      •  We used to spend 5-6% of GDP on infrastructure (0+ / 0-)

        Roughly from FDR to Ford. Since then we've spent less.

        Was this long term policy of infrastructure spending inflationary by itself? There appears to be a correlation between declining inflation over the last 30 years with reduced infrastructure spending over the same time period.

        I'm still advocating of 5% of GPD to be spent, creating 14 to 18 million jobs cures many ills. TO many to ignore.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Sat Nov 10, 2012 at 11:38:44 AM PST

        [ Parent ]

        •  I don't think so, and have reasons for not (1+ / 0-)
          Recommended by:
          psyched

          thinking so, among those reasons is that we've poured enormous amounts of new money into the system  over the last 4 years, but no inflation.  At least not wage and interest rate inflation.  Of course, being a monetary soveriegn, US interest rates are controlled by US policy, not bond vigilantes.

          Think we stopped investing in infrastructure because industry moved to other places.  China has a great infrastucture, shiny and new, cuz American industry wished it so.

          Instead of providing banks with dollars by buying back the bonds they buy, thus giving them a profit, we could introduce those dollars into the economy by hiring people to build a smart grid.  Dollars are dollars as far as inflation is concerned -- inflation doesn't make a distinction between a poor  person's dollar and a fat cat's dollar.

    •  The ancient Athenians printed their own (2+ / 0-)
      Recommended by:
      katiec, psyched

      money and this enabled them to finance a boom in the building of warships, which in turn made them the dominant power in their part of the globe, which in turn enabled them to produce all of the things that we still marvel at today.

      This currency was actually in the form of silver coins made from silver mined in the city's own silver mine. Notice that the coinage was in silver when gold was used in other locales. But the Athenians did not have a gold mine so they produced silver coins as a medium of exchange. Their trading partners could have refused to accept silver and Athens would have been a small place with subsistence agriculture. But once everyone agreed that silver was okay, then the economy boomed. Later, when the silver supply fell, Athens fell on hard times.

      We have a dollar mine and it will never fail. Even if other nations refuse to accept our dollar, an impossibility in my view, we can make the things that we need here at home, which, by itself, will produce an internal boom.

      We can also use this dollar mine for good public purposes. For example, we can adapt Alaska’s policy, and give each American citizen a monthly stipend that will provide an economic floor for everyone. This floor, managed properly (and there are ways to do this), will make people's lives less volatile, it will tend to remove arguments about money from marriages, and it can be used to pay one parent to stay at home with their children without undergoing hardship. The preservation of marriage and the improving of early childhood are, by themselves, sufficient reasons for us to move to dollar mining today, literally today.

      Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

      by hestal on Sat Nov 10, 2012 at 05:03:37 AM PST

      [ Parent ]

      •  uhm (0+ / 0-)
        Even if other nations refuse to accept our dollar, an impossibility in my view
        I respectfully suggest that this is a dangerous assumption. At the moment we see that China is already working at reducing its dollar holdings. It has sold Treasuries and bought Japanese bonds. Japan in turn has been forced to buy dollars in response. Below the surface all is not as rosy.

        QEfinity will lead to problems ... not immediately, but eventually.

        Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

        by taonow on Sat Nov 10, 2012 at 05:21:06 AM PST

        [ Parent ]

        •  And what impact has China's change (1+ / 0-)
          Recommended by:
          psyched

          in policy had on our currency? None at all.

          Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

          by hestal on Sat Nov 10, 2012 at 05:28:05 AM PST

          [ Parent ]

          •  Yet (0+ / 0-)

            Yet. Japan is now being pushed into printing high speed to weaken its currency. Things can continue for a while, but eventually reality will strike .. and when it does, it will be very very quick.

            Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

            by taonow on Sat Nov 10, 2012 at 07:00:20 AM PST

            [ Parent ]

        •  QE is not working anyway (2+ / 0-)
          Recommended by:
          psyched, jellyyork

          In QE, the government creates money and buys bank assets, improving their balance sheets and, hopefully, encouraging them to create money in the real economy.   It's not working.  How about creating that same money, but using it to hire people in the real economy?  That's the basic policy recommendation I am making - create money and put it in a place that will create real demand in the real economy.  Why on Earth is it somehow okay to give money to bloated financial institutions which already control the majority of the world's capital, but not okay to give money to people who need it, and would actually use it?  It is nothing more than pure prejudice that makes the one perfectly acceptable, but the other a sin against economics.

          When inflation appears, it can be dealt with, should it be judged to be a greater threat than economic stagnation.  Given the massive debt overhang that the entire world suffers from at the moment, a fair bit of global inflation might not be too bad.  

          It's odd, though, how the threat of inflation is used to argue against doing anything to deal with unemployment or insufficient demand, whether there seems to be an actual threat of inflation or not.

          Currency devaluation can be a problem.  However, it can also have benefits.  The US trade deficit is rather severe, but a devaluation of the currency would likely help, rather than hurt, this.  US imports are largely manufactured goods that could just as easily be produced here given demand and industrial policy, and energy, which we shouldn't be buying to begin with.  Cut it all, and put Americans back to work building our own trinkets, and building our own clean energy infrastructure.

          `Under my command, every mission is a suicide mission.`

          by Zwackus on Sat Nov 10, 2012 at 06:36:33 AM PST

          [ Parent ]

          •  well (0+ / 0-)

            QE is actually stimulating the economy. The government spends money and raises that money from the financial markets buying selling bonds (since it is running a deficit). Normally this would cause interest rates to rise. BUT the Federal Reserve instead buys the bonds indirectly providing a willing buyer and thereby keeping rates low (and of course printing money to buy the bonds).

            The bonds the Fed buys do not fatten the banks (other than on some trading level). The Fed issues a bond, the bank buys the bond, the Fed buys it back (effectively). The Fed is essentially buying (indirectly) back most of the debt being issued by the government currently, so the net impact on bank balance sheets is minimal.

            Inflation is a monster slow to rouse, but very difficult to tame once unleashed. It will consume the pensions of the savers ... but of course that is the plan. Everyone will get SS, but it won't buy what you though it would buy.

            We are now in a currency devaluation war. Every country wants to devalue its currency. (Note: a large percentage of the trade deficit - up to 50% some months - is due to energy imports). Also for modern manufacturing to be cost competitive with low wage countries it has to be incredibly automated (few jobs). Some will definitely come back, but there is a limit.

            Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

            by taonow on Sat Nov 10, 2012 at 07:10:44 AM PST

            [ Parent ]

            •  The US gov could stimulate by getting money into (1+ / 0-)
              Recommended by:
              psyched

              the hands of folks directly.

              The buy back of bonds is a free give away to banks, and to the extent that banks might need liquidity, this could be  achieved through bottom up methods.

              •  My father preached this fifty years ago. (2+ / 0-)
                Recommended by:
                katiec, psyched

                He was a child of the Great Depression and he remembered well the effects of the public works projects. In fact, the whole generation of adults that I knew as a child believed in this approach.

                Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                by hestal on Sat Nov 10, 2012 at 08:25:55 AM PST

                [ Parent ]

              •  We used to spend 5-6% of GDP (0+ / 0-)

                on infrastructure, last year we spent 1.3% about 195 billion, which is about 4 to 5 million jobs. in a 15 trillion dollar economy 5% is 750 billion. We could create an additional 10 to 13 million jobs.

                Without that New Deal policy every recession sees a jobless recovery, 1990, 2000, and the current great recession. From 1938 to 1988, recessions were shorter and shallower, only in 3 years did GDP go worse than negative 2%.

                FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                by Roger Fox on Sat Nov 10, 2012 at 02:25:05 PM PST

                [ Parent ]

            •  Nonsense (1+ / 0-)
              Recommended by:
              psyched

              QE has had little or no stimulative effect on the economy. If you think it has had such an impact, then let's see some evidence. I don't see a shred of it.

              Also, you don't have to worry about the Chinese getting out of dollars until they decide they don't want to trade with us  any longer. But hey, if they do that, we'll just have to make things here, ourselves. Maybe Detroit will come back!

    •  The situation in Zimbabwe in no way matches (3+ / 0-)
      Recommended by:
      hestal, psyched, Dustin Mineau

      the US situation.  Among other things, Zimbabwe  owed debts in foreign currencies.

      The US owes all it's obligations in it's own unit of account, the dollar, which it can create at will any time it wants to.

      •  Zimbabwe (2+ / 0-)
        Recommended by:
        katiec, psyched

        also destroyed its productive capacity before it printed so much. In doing so it destroyed its own production of goods creating a classic inflationary precondition too much money chasing too few goods. Here, of course, we have 20 -25% idle capacity just waiting to absorb deficit spending by the Government w/o demand-pull inflation.

    •  What's "It"? (1+ / 0-)
      Recommended by:
      psyched

      MT doesn't prescribe "printing money" in the sense you're referring to. If you think it does, then how about some quotes to prove it?

  •  The stores are full of stuff. (1+ / 0-)
    Recommended by:
    psyched

    Many stores that are full of stuff are closing because there is not enough money to buy the stuff. The idea that people are lazy and would have more money if they tried harder is silly. What would they do? Make more stuff? Yet about half the country believes that.

    I can only see two solutions. Print more money or redistribute the money that is already there. I can't see laissez faire working without great social upheaval and pain.

    We're fools whether we dance or not, so we might as well dance.

    by PowWowPollock on Sat Nov 10, 2012 at 05:24:40 AM PST

    •  I own a ladies' dress shop in (2+ / 0-)
      Recommended by:
      psyched, Roger Fox

      Texas. My sales are only 33% of what they were when the bottom dropped out of the economy. We still get the same number of people passing through our store, and when they buy they still buy the same price levels, so our ticket-size has not changed. But we have fewer tickets. People are looking, but they are not buying. I am lucky, so far I have enough personal capital to keep going, but I have told my employees that we have to take a serious look at where we stand and where we think we are going at the end of May. I was sorely afraid that Romney might win. That would have been the kiss of death for my store, and my three employees, professional, dependable, trustworthy all, would have soon been out of work.

      Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

      by hestal on Sat Nov 10, 2012 at 05:44:13 AM PST

      [ Parent ]

  •  Excellent Diary! (4+ / 0-)

    Kosaks, please read, and re-read.  Print it out and put it on your refrigerator to read again later.  The narrative around public debt in this country that compared personal debt to public debt is ridiculous.  

    And now for extra credit:  Building on point 8, suggest a fair and practical system of taxation.  

    Answer to be posted later.

    The Long War is not on Iraq, Afghanistan, or Iran. It is on the American people.

    by Geonomist on Sat Nov 10, 2012 at 06:17:36 AM PST

    •  I'm leaning more and more towards (3+ / 0-)
      Recommended by:
      arendt, hestal, Dustin Mineau

      Michael Hudson's views on taxes:  tax free lunches and untax labor and industry.

      •  Hell yes! You get the extra credit. (3+ / 0-)
        Recommended by:
        katiec, Roger Fox, Dustin Mineau

        Taxing monopoly power is the key.  The right wing just assumes monopoly as a right and mana from heaven.  Tax all monopoly power heavily and we turn the whole economic system around for most people.  

        In fact if we wanted to get technical it isn't even taxation the way most people think of the word.  Taxing monopoly power is more like charging for damages done.  The point isn't so much about raising the money but compensating the rest of us for the damage done.  Failure to tax monopoly power is the government's greatest sin.  

        Even the grand-dad of capitalism, Adam Smith said in his cannons of taxation, the first of which says "Citizens should pay taxes in proportion to the revenue which they respectively enjoy under the protection of the state."  Many people mistakenly think this means a high income tax but that wasn't what he meant.  He was referring to direct taxation of monopoly power such as enjoyed by the British East India Company or the landed aristocracy.  

        The Long War is not on Iraq, Afghanistan, or Iran. It is on the American people.

        by Geonomist on Sat Nov 10, 2012 at 11:21:28 AM PST

        [ Parent ]

  •  I'm not a fan of this theory (0+ / 0-)

    But hey, I'm not an economist.

    I think that it's important in times like this to think about how government finance really works.
    What you're espousing is a theory. I'd stay away from stating it as fact. When people state theories as facts they lose credibility (at least to me).
    •  What isn't? (2+ / 0-)
      Recommended by:
      psyched, Roger Fox

      Would you say that to someone who was worried about the National Debt, because we're passing on an unsustainable burden to our children?  Or, someone who claimed that we need to reduce budget deficits, for any reason at all?  Such ideas are based on particular theories of what money is and how it works in the economy, and are no more fact than this.

      All attempts at explaining money are theory, because nobody really understands what it is or how it works.  Classical economics either ignores the problem, or posits a theory of money that is obviously counterfactual.

      `Under my command, every mission is a suicide mission.`

      by Zwackus on Sat Nov 10, 2012 at 06:56:30 AM PST

      [ Parent ]

    •  It's not a theory that we are no longer (3+ / 0-)
      Recommended by:
      psyched, jellyyork, Roger Fox

      on the gold standard.  It's a fact.

      It's not a theory that every dollar is both a public liability and a private asset.

      It's not a theory that 2 plus 2 equals four, and that if you reduce the public liability by 2 dollars, you reduce private assets by 2 dollars.  It's simple accounting.

      It's not a theory that if you had a money making machine in your kitchen, you could never go broke.  Just a fact.  Likewise, the US can never go broke.

      It's not a theory that there's no internal, logical reason, for a monetary sovereign of a fiat currency to sell bonds, borrow in any way nor tax to fund it's spending.  It's just facts.

      Anyway......

    •  In that case, you should understand that (1+ / 0-)
      Recommended by:
      psyched

      our current dominant economic process is a theory, and it does not work very well at all. I would rate it as a failure. The folks who took pragmatic steps to deal with the problems of the Great Depression enabled us to find a way to hold things together this time, otherwise we would be another Great Depression again.

      Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

      by hestal on Sat Nov 10, 2012 at 08:28:48 AM PST

      [ Parent ]

    •  IF you want to know what's (2+ / 0-)
      Recommended by:
      katiec, psyched

      really happening, follow the money.  That's exactly what MMT does.  It cannot be disproved because it is mathematically correct in its understanding of how money works.  Money works the way it works no matter what any expert may attempt to claim to the contrary.  Just as the facts about the polls in the last election were right no matter what the so-called experts claimed, MMT in its mathematical form is impossible to refute.  In fact, it can only be shelved idealistically.  So let's agree that the math is right and then spend our time figuring out how to politically manage what it means.

      •  We can't go too far (3+ / 0-)
        Recommended by:
        katiec, psyched, jellyyork

        The sectoral financial balances model is an accounting identity. Accounting identites are tautologies. They are empty of empirical content.

        But its interpretation in terms of real measures and statistics is contingent and makes the model an empirical theory that can be refuted. It hasn't been however, and it's at the very foundation of MMT.

        •  Understood. (0+ / 0-)

          It seems to me that to be effectively refuted, the interpretive contingents going into the theory would have to be proven wrong or reformed, which would actually just create another identity.  So you're right, the parameters (real measures and statistics) of the identity can be empirically explored relative to whether or not they prove to be the relevant inputs and mathematically relate to the identity.  But as long as everyone accepts the real measures and statistics comprising the identity, and therefor the theory, its foundation will remain solid?

          Thanks for your counsel.  

           

    •  But nearly all of the underlying foundation (1+ / 0-)
      Recommended by:
      katiec

      is a nice bullet list of facts.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Sat Nov 10, 2012 at 02:48:21 PM PST

      [ Parent ]

  •  Galbraith (3+ / 0-)
    Recommended by:
    katiec, psyched, Roger Fox

    has written a lot on this topic.

    His latest, in Salon, is very readable.  A lot of his stuff is fairly complex.

    http://www.salon.com/...

    http://utip.gov.utexas.edu/...

  •  great diary/conversation ! (3+ / 0-)
    Recommended by:
    katiec, psyched, Roger Fox

    I'm not up to speed on this subject enough to really add to the conversation but I just have to say that I'm really enjoying the rational discourse.  Especially since it's all new to me.

    Kudos to hestal, katiec, zwackus, taonow, hannah, etc.

  •  More and better democrats - Sandy refugees (0+ / 0-)

    There are at least a million people right now that don't want to hear about wonky voodoo math. We don't want them to learn from their hardship that government is the problem.

    There are a whole lot of progressive democrats in the Occupy Sandy Relief effort, who may not call themselves progressive democrats (YET!). When we support them now, they may join us later.

    Red Cross sends a truckload of blankets to Occupy Sandy – NYTimes
    http://www.dailykos.com/...

    Occupy Sandy Relief started their main hub in the Rockaways with a solar powered generator from Greenpeace.  Before long, the National Guard was relying on OccupySandy to distribute food and water.  The slow motion Red Cross sent a truckload of blankets on Thursday night, 10 full days after the storm. But hey, late is better than not at all.

    Occupy Sandy's direct action, with their motto of "Solidarity, Not Charity" and their ability to organize boots on the ground, is breaking down walls that have been used to divide us. This is community organizing. It is apolitical and non-religious. Greenpeace, NY National Guard, and the Red Cross are now supporting Occupy Sandy along with a long list of local organizations.

  •  Thanks for the great (3+ / 0-)
    Recommended by:
    katiec, Roger Fox, psyched

    post.  You are right on the mark.  As someone once said, "If you want to know what's really happening, follow the money."  That's exactly what MMT does.  It cannot be disproved because it is mathematically correct in its understanding of how money works.  Money works the way it works no matter what any expert may attempt to claim to the contrary.  Just as the facts about the polls in the last election were right no matter what the so-called experts claimed, MMT in its mathematical form is impossible to refute.  In fact, it can only shelved idealistically.  So let's agree that the math is right and then spend our time figuring out how to politically manage what it means.

  •  Great diarhy Zwackus, very clearly, simply (3+ / 0-)
    Recommended by:
    jellyyork, Roger Fox, psyched

    stated.  I'm going to email to friends and family.

    Well done!

  •  Republished to Royal Mantacoran Rangers (2+ / 0-)
    Recommended by:
    katiec, psyched

    and Keynesian Kossacks, great read,great comments. I learned something. TnR

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Sat Nov 10, 2012 at 02:40:10 PM PST

  •  Well done, Zwackus (2+ / 0-)
    Recommended by:
    katiec, psyched

    Please let's have more. And please put in some links. They're a valuable addition to any diary.

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