Steve
Thailand
flag msg tools
.
https://www.youtube.com/watch?v=0YhrtktLQQw

Prof. Warrem Mosler talks about how back in 1996 he and other MMT economists had a symposium and predicted the problems with the how and why the Eurozone would be fine as long as the world economy was humming along fine, but in a big downturn the rules in place would not allow the proper responses.

The biggest problem is that the nations of the Union are like states in the US. They are currency users. The problem is that the ECB [European Central Bank] forces austerity onto the nations. They must act procyclically [Mossler's word] instead of acting counter-cyclically.*
. . For example, instead of deficit spending to pay unemployment claims, the nations must cut spending to balance their budgets.
. . Because all spending is always someone else's income, cutting Gov. spending always cuts total income. This then cuts revenue, which then forces more spending cuts. Etc.
. . Mossler claims that hyper inflation is caused by printing money after there is 'full' employment or some special case. For example, Weimar Germany was buying gold, Br. Pounds, and Franks with Marks to be able make reparation payments required by losing WWI. The foreigners then bought stuff in Germany with the Marks and this drove up prices because it took more and more Marks to trick people into selling gold, Pounds, or Franks for Marks. This is not going to happen in the US or the Eurozone today.





. * . It does not allow the various nations to make good on the system of insuring bank accounts because the nations could not borrow enough to pay the claims. The rules made the various nations responsible for regulating and insuring their own banks without giving them a way to pay for or fund it in a crisis.
3 
 Thumb up
0.05
 tip
 Hide
  • [+] Dice rolls
Steve K
United States
flag msg tools

Economists - kinda like art critics but less honest.
3 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Robert Wesley
Nepal
Aberdeen
Washington
flag msg tools
designer
badge
Avatar
mb
In 21st Century whilst 'poop' has yet attained "upwardhillability" coal -'piled' STILL did.
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
United States
Boise
Idaho
flag msg tools
badge
Avatar
mbmbmb
Seriously? This is what RSP has sunk to? FFS, can someone page Lightrider to this thread so the circle of analytical attenuation is complete and I can enter full REM sleep?

Next thing you know we'll have a bunch of threads linking to TED talks.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Robert Wesley
Nepal
Aberdeen
Washington
flag msg tools
designer
badge
Avatar
mb
wow SEND MORE "organic" Euro-Sodas too over here, and I will buy those! Just doing SOME 'part' rather than NONE! thumbsupcool
 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Steve
Thailand
flag msg tools
Knewt wrote:

Economists - kinda like art critics but less honest.

I have posted things here where I agreed with this thought.

MMT is better though.

.......................................................................
My claim is [given that macroeconomics can't do controlled experiments] that economics matters too much [unlike Astronomy or Paleontology] in how it effects real world Gov. policies to let economists get away without rigorous proofs. A rigorous proof lists all the premises and shows all the steps. This is what math requires for a proof.

Also, people must not relax the logical rule that just 1 false premise in a proof makes that proof not prove anything.

If economists find that they can't prove anything useful with these requirements in place then, too bad. I don't see why Gov. policy should be based on bullshit proofs.

An I know that the right wing nuts here can't believe that everything they know or believe about economics is based on bullshit proofs.


Economists never come close to a series of rigorous proofs of what they claim to have proved.
 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Jorge Montero
United States
St Louis
Missouri
flag msg tools
badge
I'll take Manhattan in a garbage bag. With Latin written on it that says "It's hard to give a shit these days"
Avatar
mbmbmbmbmb
You won't find many MMTers (if any at all) in a central bank, because MMT, while predictive in some cases, might as well be saying that central banks can't do anything. This is why it's predictive when a central bank is mostly passive.

In practice though, monetary policy and government policy can go in opposite direction, which allows for a bunch of separate states that MMT doesn't even consider, and when it's not predictive.

For instance, look at sequestration: if you went by MMT, it would have crushed the US economy, and it probably would have, if the people leading the Fed were the people leading the ECB during the crisis. However, the Fed became more expansionary during sequestration, monetarily offsetting the government's action on the economy.

In fact, we can see the ECB crushing European countries during the crisis when they decided to raise rates while the entire Southern Europe was ignoring Maastrich's promises and spending a whole lot. Despite the fact that the governments were being expansionary, they kept contracting by raising rates: The ECB is stronger than the governments. We also have to take into account that markets are forward looking: One time spending, or one time monetary expansion, doesn't really move the needle, just like the Bush check to every taxpayer didn't do a thing. What makes a difference is future trends. If a central bank promises that there will be an increase in nominal gdp of 5% next year, and we think they really mean it, you'd be an idiot to bet against it, because they have the tools to do so. A government can't promise to spend as much as necessary until the crisis ends while being credible.

So MMT is only right in a world that is not the one we live in.

2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Robert Wesley
Nepal
Aberdeen
Washington
flag msg tools
designer
badge
Avatar
mb
pcblankletterblankoverload robot
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Steve
Thailand
flag msg tools
GROGnads wrote:
pcblankletterblankoverload robot

ECB = European Central Bank
MMT = Modern money [or monetary] theory
QE = quantitative easing = the US Fed. Res. Bank buying up T-Bills/Bonds with cash created just to do that. MMT claims that this is just asking someone to move their money from a savings [w/interest] to a checking account [no interest].
JP = jobs program = a plan of MMT to have the Gov. hire unemployed people at about $10/hr instead of having them on unemployment benefits.

 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Steve
Thailand
flag msg tools
hibikir wrote:
You won't find many MMTers (if any at all) in a central bank, because MMT, while predictive in some cases, might as well be saying that central banks can't do anything. This is why it's predictive when a central bank is mostly passive.

In practice though, monetary policy and government policy can go in opposite direction, which allows for a bunch of separate states that MMT doesn't even consider, and when it's not predictive.

For instance, look at sequestration: if you went by MMT, it would have crushed the US economy, and it probably would have, if the people leading the Fed were the people leading the ECB during the crisis. However, the Fed became more expansionary during sequestration, monetarily offsetting the government's action on the economy.

In fact, we can see the ECB crushing European countries during the crisis when they decided to raise rates while the entire Southern Europe was ignoring Maastrich's promises and spending a whole lot. Despite the fact that the governments were being expansionary, they kept contracting by raising rates: The ECB is stronger than the governments. We also have to take into account that markets are forward looking: One time spending, or one time monetary expansion, doesn't really move the needle, just like the Bush check to every taxpayer didn't do a thing. What makes a difference is future trends. If a central bank promises that there will be an increase in nominal gdp of 5% next year, and we think they really mean it, you'd be an idiot to bet against it, because they have the tools to do so. A government can't promise to spend as much as necessary until the crisis ends while being credible.

So MMT is only right in a world that is not the one we live in.


Yes, MMT does assume that the CB and the Gov. Treasury Dept. are the same or at least work together. So, what they are saying is always "if the Gov. decides to just pass a new law to join then, then ... ".
. . So, you are saying that the only thing that saved the US economy from being crushed by the sequestration [which was totally and completely the work of the Repuds in Congress] was the Fed. Res. Bank and its expansionary policies. That doesn't sound good for the Repuds does it?

However, did any MMTer predict that the sequestration was going to crush the US economy? I wasn't paying that much attention to what MMYers said then. Or, did they know that the Fed. could and would soften the damage?

If one time actions "don't move the needle" what would be the effect if the US Gov. passed a law that forced the Fed. Res. Bank to credit the US Gov. account with $2 T on Jan. 20th of next year? [i.e. all newly "printed" cash] [Or $10 T?]

.......................................................................

Why does it make any moral sense for the ECB to 'crush' [your word] southern European countries and force them to cut benefits to retired people [and others] which will cause them to eat dog food, when the ECB could just create new cash to solve the problem.
. . The retirees are not the criminals or wrong headed people who ran the country into the ground. Why not find a way to punish the offenders instead of the bystanders?
. . This is especially true because austerity will not solve the problem. It just makes the problem worse until something gives. The Eurozone has been trying austerity for 8 years now and things are worse not better for the 'crushed' nations [and only 'OK' for the rest of the nations].

 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Robert Wesley
Nepal
Aberdeen
Washington
flag msg tools
designer
badge
Avatar
mb
GROGnads wrote:
pcblankletterblankoverload robot
-"What does it MEAN?" meant; JUST & ONLY that!
Steve1501 wrote:
ECB = European Central Bank
MMT = Modern money [or monetary] theory
QE = quantitative easing = the US Fed. Res. Bank buying up T-Bills/Bonds with cash created just to do that. MMT claims that this is just asking someone to move their money from a savings [w/interest] to a checking account [no interest].
JP = jobs program = a plan of MMT to have the Gov. hire unemployed people at about $10/hr instead of having them on unemployment benefits.

Which one(s) from US could "effect" that unto 'culmination'? So far, I'm OUT!
 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Frank F
United States
Texas
flag msg tools
IF YOU WANT IT
badge
Please investigate a resource based economy.
Avatar
mbmbmbmbmb
The great failings of the monetary system will become more rapidly apparent to more people in more countries until it is too late to save most people from them. We are already condemning our progeny to an inhospitable planet. We starve and let preventable diseases kill many people every day. We squander so much human potential in service of the profit motive. We engage in the most inefficient methods of energy production food production and commerce simply to satisfy short term stock market gains. We are mindlessly enthralled to a system hell bent on destroying us and our home in order to score imaginary points in a game everyone is destined to lose eventually. Ridicule me all you want, but the joke is going to be on you and your children in the end.
 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Front Page | Welcome | Contact | Privacy Policy | Terms of Service | Advertise | Support BGG | Feeds RSS
Geekdo, BoardGameGeek, the Geekdo logo, and the BoardGameGeek logo are trademarks of BoardGameGeek, LLC.