How Modern Monetary Theory (MMT) Actually Works (w/ Warren Mosler)
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- เผยแพร่เมื่อ 7 มิ.ย. 2024
- Modern Monetary Theory has become a hot topic of discussion. But is it well understood? In this interview with Real Vision’s Ed Harrison, Warren Mosler, the founder of MMT, describes exactly what Modern Monetary Theory is, and how the framework can be utilized. Particularly interesting is Mosler’s ambivalence about the political furor enveloping MMT. He sees the economic framework as more descriptive of monetary operations than prescriptive of policy. Mosler also outlines why MMT’s operational bent made it attractive to finance professionals long before it became a politically-charged debate among academic economists and politicians. Filmed on May 29, 2019 in New York.
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How Modern Monetary Theory (MMT) Actually Works (w/ Warren Mosler)
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BIG upvote for putting the original air date up there. Helps alot.
Yes but it should still be A LOT MORE PROMINENT. Well said though.
SuperLkelley it should be in the title!
a lot
What special significance does the date have?
My thought is why can't local govts be currency issuers too? Why can't Texas issue longhorn$? Why can't the town of Kelowna, BC, Canada issue kelownies?
The central bank and private investors could buy these local currencies on a DOMEX (FOREX for domestic trade).
The Central bank currency could then be based on an average of all DOMEX traded local currency values.
Another option is to have state or local currencies only. The dollar or euro could merely be a special (central) bank card issued to everyone that automatically converts local currencies when you go to shops in different countries (think using Mastercard as a Canadian to buy souvenirs in the US). Like this, the state (or nations in reference to EU members) could adjust their fiscal and monetary policies which cannot happen with a single currency.
And some may point out that private and state currencies had existed in the past. That is true, but they were gold or silver backed. MMT thrives on fiat currencies.
The interviewer was versed in the subject, and had evidently read about Mosler and his work. Compare him with the guys at CNBC that when interviewing Dalio show not ignorance but stupidity, and interrupt him constantly. THUMBS UP RealVision
CNBC 🗑
The trouble is Mosler's ideas are like flat earth ideas. You don't bother to try to prove a flat earther is incorrect, you just ignore them.
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That rug really brings the room together.
It's the elephant really.
Pity about the theory
Well that’s just like your opinion, man.
Guys, don't dislike a video just cause you don't agree with the opinions in it, this video still has a ton of educational value.
If you listen to the insights this guy provides, they are very correct - like saying that Central banks printing money and buying treasuries to control interest rates, all while GOVERNMENT issues treasuries is just an acounting trick- since what really happens is that the government is printing money and then lends it to itself.
Also take note at 33:21 there is no refuting his logic, all this guy is proposing is that we cut the acting and just admit that the government prints the money etc... he just proposes it to be honest, essentially on the logical side of things- NOTHING WOULD REALLY CHANGE.
great point. we should discuss the issues in the comments.
How can we trust the value of money?
They're not intelligent enough to understand it.
It doesn't matter that there is no refuting the logic, because there is no refuting their indoctrination.
You think indoctrination was a method only employed by the Soviets and the Chinese ?
I honestly don't know how to make sense of the alternative theory... Its as if we all mine money out of the ground??
I love how some people dislike what he’s saying in the comments but can’t really articulate a coherent method of critiquing the theory lol
Does make you wonder .
Granted , AUSTERITY & MONEY FAMINE can easily be blamed for taking several generations from literate to il-literate :
Without the time and money to read & think . . . Dumbth can happen
books by Steve Allen
Dumbth: The Lost Art of Thinking With 101 Ways to Reason Better & Improve Your Mind (1998)
Dumbth and 81 Ways to Make Americans Smarter (1991)
just like he says about his self-published paper in 1993. nobody can touch it because it's factual, functionally correct observations of money macro operations, not opinion.
his description is accurate. this is nothing new. just he made this public. he's wrong about his prescriptions and extrapolations about interest rates and GDP
@@4comment0nly76 In what way he is wrong?
@jimbo one in a million actually understands the system. That's why we haven't had a revolution :)
EU-level investment bonds prediction now coming true. Well done.
Man, I'd love to see Lacy Hunt and Warren Mosler in the same room. They are similar in that they don't believe more debt will equal higher interest rates, but they radically differ from there.
How do we protect ourselves from economists who refuse the learn the lessons of history?
The present economic system does not work.
@@nivekvb - The understanding by neoclassical economists of how money works is inaccurate.
@@thomasd2444 debt messes up their equations so they leave it out.
@Rabble Repository agreed!
Buy Bitcoins!!!
MMT = Rearranging numbers around until it fit the equation.
But are you able to understand the maths?
Kaivey The math is simple according to prof. Stephanie Kelton.
A. Govt’m is the only entity that can print money. Therefore, they cannot default on their currency.
B. The govt’m paid everyone $100 per day to build a hospital. (Stimulating the economy)
C. The govt’m has a deficit of $100 per person. Everyone has a surplus of $100.
D. Everyone pays the govt’m said 10% tax.
C. Everyone now has $90 surplus and the govt’m deficit is reduce to $90.
E. Everyone goes out and spend some of that $90 on pizza, coffee, beer... and the govt’m get more tax back.
F. The pizza, coffee and beer stores order more inventory and they too paid tax to the govt’m.
As long as the money keep circulating, the govt’m will get back all the money that they issued. If not they can just write it off.
That’s the MMT math equation.
@@soulmate805 sounds like a Ponzi scheme
Don’t agree with MMT. But glad Real Vision brought him on and heard him out.
How do not agree with it? It is how the system works. There is no other way to describe how the currency issuer creates US Dollars and uses taxes to demand it is the currency used.
@vertex2100 the point is to use currency as means of exchange, not to store value in it. Fiat works like other people mentioned.
Agreed any central control equals no freedom in the end...
This is what needs to dissappear more than anything else...
I'll bet you're big on astrology too.
@@cdub9510 1. mmters use a circular defintition of money. money is whatever the government demands for taxes and whatever the government demands for taxes is money.
2. if the mmters got the policy proposals that they say mmt allows it would ironically destroy the very framework that mmt works under.
"Treasury has been instructing the Fed to credit accounts since 1913, hasn't created Zimbabwe yet....."
yoshi545825 .You have nothing to be complacent about since the purchasing power of the US dollar has been reduced to 5% of what it could buy in 1913 despite the massively increased productivity that has added to the purchasing power of every dollar !!
@@lostalone9320 exactly, as soon as confidence in the US reserve currency fails, and someone will undermine it since it is weak, then we are in trouble
@@lostalone9320
MMT specifically warns that inflation is the sign you need to step off the gas and possibly apply the brakes.
@@expressionofwill5307 wrong
@@Rob-fx2dw this is not actually true, the vale of the real economy has declined 5% but the dollars has ushered in over 20x in value for the fake economy ( stock market) because right now MMT is being used in the U.S to pump the stock market not the real economy and so if you aren’t in the fake economy then you have lost purchasing power compared to then if your were in the fake economy then you make 20x your purchasing power since the inception of the FED.
It''s like listening to someone describe death in detail in a matter of fact way with a laugh and a smile.
AWww .... the poor thing...You're upset because you can't handle the fact that you've swallowed a flawed conception of how the world works for all these years...
@@UnhingedBecauseLucid Well I suggested to a family member recently that got a job working in the central bank don't stay too long ... people may come with pitchforks when this ponzi comes down. They didn't even understand how fraudulent it was because the dumdums all around that pretend that it's normal and just how the world works... lulled them into false sense of normalcy.
@@quacktuber1051 It has indeed been a fraud all along, but Capitalism had to keep a presentable face ... especially during the Cold War.
With jobs offshored, and lost to technology, automatic stabilizers capped and no further credit creation, the claim that markets would have accommodated the destitute in a timely fashion and in a non-nationally-debilitated way is in my opinion ... horseshit; and it's not that you can go back in time and extrapolate that we would have what we have now minus the bad.
A system that will go up to pushing people in tent cities has other fraud issues in its root programming IMHO...
Hes not proposing anything. He is stating how the system works and how weve been lied to.
@V J : It is all about where money is directed and it is a fair bit more nuances than implied as he/MMT assume banks are part of the government. As they (banks) create the vast majority of money (about 90% in the US) circulating in the economy. Of which is overwhelming directed toward assets already in place (real estate, stocks, bonds --think asset price inflation) not for productive things like increased production or productivity.
Countries with debt to GDP ratios of 140%! "this is insane. It cannot work. It'll work fine on the way up, but as soon as you hit your first crisis." 14:42 USA GDP is now 138%.
2019: LET DO THIS
2022 Elvis "wise men said only fools rush in".
As I understand MMT simply states that you’ll always have regime provisioning itself thru fiat money backed by taxation. How wisely it provisions itself and invests in its people and is a separate issue entirely.
*Taxes and a productive enough economy that produces enough real goods and services that people can purchase with those otherwise worthless pieces of paper.*
I started India’s first Money Market Fund when I was 26 years old. Then I became head of one of the first Primary Dealers in India when I was 28 years old. Then at 31 became head of treasury for a French bank india ops. Saw the process of money creation, accounting entries and effects on rates and exchange rates every day from three different perspectives over seven years. I agree that merely printing of money does not cause inflation. When aggregate demand exceeds aggregate supply, it causes inflationary pressures. If one is using government spending to remove constraints in the economy, it can actually lower inflation ( although government spending on mindless subsidies will increase inflation )
You MMT folks have no clue how principles of economics work.
@@mjpaganetti
I think they do....far better than the politicians and "bankers"
that's how they've sold MMT.
MMT will cause collapse, war and famine...but what the heck...
whoever implemented it FIRST
got to spend trillions for free !!
Now two years after this comment of mine, we have two contra examples - Japan which has printed money without mindless govt spending, and US which has also printed money but with mindless govt spending and subsidies/transfer payments. US is seeing inflation at 3x last 15 years average level and Japan is not seeing that kind of inflation, maybe 1.25x 15 year average. On the third pole is India, which has also printed money during Pandemic and govt has spent money to build infrastructure (roads, power plants, ports, ..). India is seeing inflation at 0.75x last 15 year average. This proves that right spending brings inflation down.
@@mjpaganetti can u explain your reasoning, and also your credentials & level of education?
@@shaileshdhuri4166 it's because printing money isn't the sole influencer in calculating inflation. It's actually a complex measurement that's affected by lag and average prices, etc. But the important thing to understand in the examples you shared is that you'll only get inflation if the relative increase in the money supply exceeds the relative increase of the goods and services in the economy (GDP). In the US, we're pumping money into the economy, but that extra money supply isn't chasing a requisite increase in demanded goods and services. Money is abundant but goods and services are relatively scare = inflation by definition
I admit, when he said that when the Treasury spends it simply asks the Fed to credit an account... Iˇve felt like i just had the red pill.
Read what the Mises people say, taking you slowly and carefully through the process.
@@nottheguardian7955 we aren't on a gold standard anymore though.
Yes, technically most of the money is in digital form - just entries on databases on a network of servers controlled and owned by banks. Only a small percent is paper and coins.
Full employment just for the sake of full employment is crazy, that is why in practice this theory will be wrong
What mics did you use? I like the sound. Also what video equipment?
Great interview. Thanks.
I feel this talk about "they get it wrong it's the other way around" is two groups talking about where to start on a circle and which direction to go.
Constitution: Our government issues our national currency
If you don’t begin there, you can’t understand a lot of other stuff. Including the fact that our entire financial system is created by government issued laws.
@@katiecannon8186 Wrong information. All money today is created out of credit. Government does Not issue the currency.
The Central banks (Federal Reserve bank) creates new money for the Treasury when the Treasury sells them securities. Private banks also create new money when they approve loans to all sorts of borrowers. Most by far money in the economy is created by the private banks.
All of the money in the economy is fiat money created as a financial asset rather than a real asset like a usable product.
@@Rob-fx2dw
You: Our government and banks should issue cars, houses, chickens, and other real assets.
Lol.
Also, The Fed is part of government and is Treasury’s depository bank and fiscal agent. Treasury trumps The Fed in case of conflict.
See the Treasury Fed Accord of 1951
@@katiecannon8186 No ! The Fed is not government. It is a private organization run by the banks who have 12 members on the board. The private banks get an income from the Fed's operations.
Where does the Treasury trump the Fed. The Treasury cannot force the Fed to do anything at all.
The Fed is NOT the Treasury's agent just like you are not a private bank's agent.
Read the Fed's site.
The reference you made is to the accord of 1951.
It says "On March 4, 1951, the Treasury and the Fed issued a statement saying they had “reached full accord with respect to debt management and monetary policies to be pursued in furthering their common purpose and to assure the successful financing of the government’s requirements and, at the same time, to minimize monetization of the public debt” .
It does NOT say the Fed will be subject to the Treasury. It is just a common purpose accord limited by the Fed's role to MINIMIZE monetization of the public debt.
@@katiecannon8186 Yes. I am waiting for the Treasury to ' issue' me a car and a house and a private plane. Don't worry about the chicken. - they can keep it. But I am not holding my breath waiting for the other things.
Nobody wants money. They want what money can buy. So however you manage the money supply you have to start with that central fact.
Exactly true. The ONLY thing that has value is goods and services based on supply and demand. Everything else is just ideas that produce abstractions about how to trade fairly
The central fact you have to start with is asking why people will exchange anything for money. Mosler says it's because they need money to pay their tax and everything else is derivative.
And I was feeling proud of myself for saving up forty seven dollars to buy a bicycle......
Eagle1 well done mate and enjoy the ride
Hang the banksters? It's not a modern monetary theory but it's really stood the test of time. Never far from public discourse.
My only with mmt is essentially its very authoritarian, essentially the state makes a currency valueable at gun point.
The fact that fiat currencies are by their nature authoritarian is just that, a fact. MMT just explains that fact and its ramifications.
Also, if you're not okay with fiat currencies being authoritarian, what's the alternative? Go back to the gold standard? That wouldn't really work at this point. The chances of the US adopting a finite currency that it doesn't control (like bitcoin or some other crypto currency) is also basically non-existent.
@@scirrhia_kruden gold at a much higher value would work.
@@therealscot2491 I meant more in the feasibility of actually reverting to the gold standard. I don't think it'd be possible to reverse course at this point, either practically or politically, even if it could work theoretically.
@@scirrhia_kruden if there is a lose of confidence they will have too!
@@therealscot2491 gold has the same problem as fiat money - it has no intrinsic value
How is it possible all these experts can't see the limitation for economic growth. Finite resources and forever 3 percent growth are in absolute contradiction.
The assumption is that economic growth is a zero-sum game, which it is not.
The simplest example would be a baker can bake a lot of bread faster, better, and cheaper than a consumer. Ergo, they can charge a premium on the cost (to collect a profit) which is then termed as value created when it is an acceptable price for a willing consumer.
(Despite profit margins being largely negative on bread, but it is but an example. You can even calculate the correlation between grocery-store access to bread, a common staple, and the induced sales for other products, thereby creating economic value for one agent despite it being a secondary or tertiary function.)
Furthermore, with the industrial sector growing smaller and smaller in developed nations, the service sector is growing. It would be rather cynical to think that human innovation (in average or in any single individual) is capped at finite amounts. It may be constrained, by resources or physics or knowledge or others, but ultimately the service-based sectors are also capable of value-added benefits that contribute to economic growth - despite similar allocations (or less) or resources.
Allocation efficacy can also be improved, proper EOS setting, and other aspects can implemented that create value. While there may be maximal levels of resource-use efficiency, EOS will vary considerably due to factors like market conditions, resource access, customer demographics, supplier relations, freight costs, and energy expenditure.
Finite resources are also still governed by the laws of physics: matter cannot be created or destroyed. It can shift states, certainly, but it’ll still exist in some form. An easy example is farming: when you plant a seed (that by itself is useless except for ecological propagation of a flora species), you will collect the nutrients in the ground, water, and even impurities. The fuels the biological growth of something that we, in turn, consume. If finite resources had no restoration mechanic, we would have consumed our planet to the core already - not counting the billions of years of other species (even bacteria) that consume something or another and even utilize material resources to grow.
Furthermore, we are a finite species - insofar as we don’t live forever. Ergo, what creates value for one will change when their a child to an adult to an elder and when they’re dead. Demographic differences change macro value-determination (even informal) metrics and advances will become more highly valued in certain societies that are at a technological peak while others (call it a Pareto Distribution) are catching up with increased population-based demand for activities, goods, and inventions that flow downstream from wealthier nations - keeping up the value-created in their nations.
And the cycle continues.
Whether the scale of the growth is possible with technological advances governed (presently) by Moore’s Law and engineering capabilities and aging population (whose fluid g-factor shrinks as well as their discretionary income; ie, mounting non-discretionary costs like healthcare, child rearing, etc) is another issue. Competition will benefit the consumer but it will also make advancements less viable - if more necessary - so it’s up in the air as to whether or not the three percent is possible.
The finite resources act as a constraint of maximal output per period. And when current production demands exceeds supply provided, other methods will be created to extract the requisite materials from our waste.
Very long and convoluted denial of the underlying principle, which is that while GDP *per capita* can be improved by increasing efficiency & technological level, OVERALL growth of both output AND population (which is what u need for GDP growth) is not possible in the long run given fixed resources like land, oil, etc
Yadin
Population? Given today’s constraints, true. However, the use of AI effectively added economic actors which mimic the resultant effect of ‘human’ population. And that is effectively, given projections of quantum level general AI systems, limitless - ending the need for strict human actors in mass scales. Computing power in the millions of human capacity.
Furthermore, technological progress also enables effectively limitless acquisition of near-earth minerals on the horizon, then solar system, before effectively limitless land expansion.
The maximal output per period is given our current constraints.
In truth, I base this off a terminal point where separation exists and expansion is constrained only by our ability to survive whatever environment we’re in (and fail to adapt to - or simply adapt) which is more of a constraint than what we have on hand.
Moore’s Law is an exceeding powerful force.
@@TheAmbush101
#1: [" If finite resources had no restoration mechanic, we would have consumed our planet to the core already "]
I think you obviously need to read on EROEI and the principles of thermodynamics.
#2: ["Whether the scale of the growth is possible with technological advances governed (presently) by Moore’s Law..."]
Technically, there is no such thing as Moore's Law, but either way, the phenomenon you are referring to has been "dead" for a few years...
#3: ["And when current production demands exceeds supply provided, other methods will be created to extract the requisite materials from our waste.
"]
See #1.
UnhingedBecauseLucid
I’m aware of Moore’s Law being an observation rather than a natural law. Even the issues associated with electrical interference with the decreasing distance between circuits in microchips (creating a natural - if current - limit to decreases in the power to size ratio). The point is that it is an observation that, when paired with observations of technical progress in other realms, is the only trend line we have; we’ve made more progress in ten years than a millennia, technologically speaking.
Furthermore, I was referring to materials - not energy - in reference to the thermodynamics comment. The same mechanic that allows for the creation of hydrogen and oxygen from water molecules to use a simple example.
Energy, in terms of oil, natural gas, coal, etc, were not explicitly referenced in my point. They’re a means to generate energy, sure; however, they suffer from inefficiencies - particularly when one has the ludicrous suggestion that perpetual motion and recycling of all energy is possible. I did not say that was possible. Even electrical power lines suffer from issues associated with open systems and lose electrons, a reason, I’m told, is why A/C is used as it is more efficient (to which I could be mistaken).
The general issue is that, like your implicit suggestion alludes to, is that we are in an open-system, right from our home planet to the center of the universe to the furtherest outskirts we’ll never touch. As such, air and other mediums ruin our ability for hyper conductivity to discount our material limitations.
However, our inherent ability to modify our environment is limited, right now, to earthly soil. So while a closed-earth chemical transformation (due to energy requirements in production and organic inefficiencies in recapturing the lost energy formed via heat or sound) is impossible, the use of solar energy (extraplanar) and external energy sources make it possible.
And far, far more interesting once you start to include the world beyond the skyline.
The original post referred to an inability (or disbelief in the notion that) GDP will grow at a constant rate given limited resources.
Due to the metric used to measure it, controlled inflation would do that, ceterus parabus. Real GDP, the implication, is different, but the poster ignores the differences between how valuable a rock is versus how valuable a rock that has been split into two by someone is (ie, geode). That is the simplest example, but it applies to any modification done by human (or human like) hands. Recasting steel is another example more akin to what I was getting at. Sure, it requires more energy (which can be accounted for in cost) but there would be an added value created by any competent business owner, enabling them to profit on what was once scrap.
@RealVisionFinance can you link the paper your guest wrote: "Self Currency Economics"? I can't seem to find it. Thanks in advance.
You can also search for "7 Deadly Innocent Frauds of Economic Policy".
"Soft Currency Economics"
Get the sequence correct and you will understand how the system works.
I missed this fellow so much when he disappeared from RT. It’s great to see him back.
You guys should probably address the hyperinflation cases, you keep getting that response from people. In each hyperinflation case, production in that country was devastated. Each country could not support itself from a production standpoint.
You statement is wrong and misleading despite MMTers claiming the same because you omitted to apply a sense of proportion to what happened in those countries. The inflation rates of 10,000 percent and sometimes 100,000 percent were not cause by a drop in production of 20% or less or even a drop of 30% in extreme cases over the same time period.
For instance would you think all the traffic jams occur because of a few extra cars or because of the thousands of more cars going the same way to the same place?
Over 300 countries have ruined their currencies in the past 60 years because of expansion of the money supply which was the Only common factor in all those instances of hyperinflation.
@@Rob-fx2dw you are discounting other effects, such as speculation on the foreign currency markets and overly permissive lending at Weimar banks that speculators used to create a viscous cycle. Read mosler's paper on this.
@@davidbaltusavich5803 You are like Mosler avoiding the historic reality that in the Weimar republic there was the currency named the "mark" which was excessively expanded and then also there was a currency named the 'rentenmark' for which the expansion was limited to real price increases of existing assets. The mark suffered massive inflation and the rentenmark did not.
What were the circumstances of "over permissive"- The loss of what restriction to lending became' over permissive'?
If in any event the expansion of lending was a cause of the inflation i the Weimar then why won't it happen in the same way when governemnts expand their deficits by the lending of money to finance those deficits which MMTers say will not happen?
@@davidbaltusavich5803 I don't just read one paper and believe it is factual or not factual since to do so is being intellectually irresponsible because anybody can make a statement that may be emotionally satisfying to the listener but totally wrong and just a play for your attention.
So I check the facts with others and see which matches the historic reality.
Such statements like "we all want nice things" which is factually meaningless but just designed to gain audience contact and supposedly make people feel they are empathetic with people needs.
You will notice performers use this all too common meaningless ploy to gain audience attention when they appear on stage to gain audience contact .
Same with presneters telling you that this time it is 'different' when the same statement was made before an identical idea was tried before and failed for the same historically well known reasons.
@@davidbaltusavich5803 Look at what Mosler says about the introduction of new Europe's new currency " the European central bank bought the money supply". Exactly. But he then says "the reason a currency has value is that it is a tax credit ". That was a mere sales contract of one currency for another not anything to do with a 'tax credit' making a currency valuable as he claims.
Firstly if tax credits gave a currency it's value then the countries where inflation caused the currency to become worthless would not have been in that situation because they all had and collected taxes in their own currency.
Secondly the whole statement is based on a fallacy because a money cannot make itself more valuable by it being transferred from one party (people who have it) to the ownership of a second party (government). if it could I could pay someone for anything and they could pay me back for something else and my money would be more valuable.
I love how people think mmt is a theory when it is just hearsay compound over the years. A theory has a mathematical description.
A link to his paper "Self Currency Economics" would be nice, if he has published it anywhere on the web. It would be nice to be able to read what is at the center of this topic. If anyone has a link, please post.
The paper is called "Soft Currency Economics" and is available only with an easy search.
We already have MMT except all the money goes into financial assets.
I see no harm into capitalizing the actual productive parts of the economy instead of creating asset bubbles.
But it's so much easier to get unearned purchasing power through purchasing financial assets than it is investing my time into a business I need to capitalise. If the government gives me a free loan, I'll take it and buy financial assets... easier return, no risk of the government forcing me to pay employees or any other taxes I can't prepare for... only pay tax when I sell and make profit.
The money shall be printed no matter who is in power. Where it goes however will be a political decision. If you want some that fake cash, make sure you use your vote!
Because inflation.
@@kelamullah1999 Nope. Just tax then
@@dunoobyduby Tax who?
it's not just wealthy people that have money in savings accounts. plenty of people barely have enough to get by on on their retirement savings and are getting robbed by negative rates to avoid volatility in other sectors pumped up by borrowed money
BTC
@@Wib0 The most speculated currency of them all.
@@Pushing_Pixels That would be USD in my metric (volume)
The only problem with MMT is getting people to realize that it’s real. They have been grossly trained to believe in classical economic policies that should of died in 1971; but didn’t.
Outside of that MMT is true and accurate as the sky is blue; but some people are sky green people, even though it’s right in front of them.
Arguments and facts would help. Fantasies and nonsense doesn't.
@@cyrusol the only fantasy is the belief of national debt causing a massive price hike of hyper inflation. Fact- when National debt was 12T a burger fry and drink was roughly 8 bucks.
12 years later national debt is 25T and a burger fry and drink is roughly 8 bucks.
The notion that rising debt causes a direct proportional increase in price is simply WRONG.
Right in front of people. But they’ve been taught and forced down their throat polices that once existed and meant something, but no longer have value given how the system changed.
@@mrDmastr19 Of course you are just wrong because your thinking has not taken into account the velocity of money flow. So your idea that increased debt has not caused inflation is a fallacy. When the velocity of money flow decreases prices are pushed downwards as is happening today. People 's consumption of real goods and services has fallen because they are not spending as fast as they were so the turnover of money has fallen but the prices have not risen as much as they would have if the rate of velocity was the same as 10 years ago although without measuring velocity you would never know this and wrongly interpret it as no inflation as you have done.
An example of two instances of lower verses higher velocity of money: - Fred earns $150 a day and spends all of it in a day. Alison earns the same $150 per day but spends half of it -$ 75. Rate of turnover for Fred is $150 a day in goods and services consumed.
Rate of turnover for Alison is $75 spent per day and less goods and services consumed so less pressure on prices of goods and services with no change of income.
Alison's pressure on prices is only Half of that of Fred's without anything else like increased money changing.
.
@@Rob-fx2dw sky green.
@@mrDmastr19 Yeah sure - Is that yopur way of avoiding addressing issues or answering questions.
Love this Warren Mosler dude.
Basically money is created by the Federal Reserve bank out of nothing by means of double entry accounting entry in the Fed.'s accounting records. The entries reflect cash on 1 side of the ledger and liability on the other side. This liability is never paid. It is only added to, as more money is created. The treasury dept acts as the Fed agent to buy or sell treasury bonds, putting more money in circulation or withdrawing money from circulation to support interest rates & money supply set by the fed's monetary policy
Howard Hill Bingo!
@V J I think it's at least the US national debt which is $22.5 Trillion This is Govt spending less taxes collected.
I'm not sure if this includes quantitative easing.
@V J using debt to get out of debt...a kind of madness. Imo. We have to learn to live within our means.
@V J if you were to pay off all the government debt then you'd be taking out most of the money out of the economy.
@V J agreed. In practise it is actually "pretend debt", pretending there is some constraint on money creation.
clear as mud. will need to watch this one a few times with a notebook. even then i have my doubts itll make any sense
I had to watch several videos with different people. What I understand: Countries with their own central banks and their own currency can't default on debt issue in their own currency in the first place because they can always print more of their own money...as long as that money isn't pegged to anything such as gold. Devaluation and demand for the currency can be controlled through things like taxes. Devaluation/inflation will probably not be a problem up to the point there is employment slack in the economy. Once actual resources are scarces inflation might be a problem. It hasn't been a problem thus far for the most part. Thus, the political arguments about not affording this or that have no merit based on the economics, since we have not reached those economic limits. The affordability debates are about social and political preferences.
Belky Hernandez The problems can also arise when you need to import or borrow from abroad from countries with their own currencies.
Belky Hernandez, I guess MMT'ers don't believe in catastrophic global climate change then. As we can print currency to fund whatever desire we have at the moment
@@lostalone9320 have studied this quite in depth since the comment. Still unsure on this working. Definately does not work with FX markets... Who's gov gets to print and keep the debt on their balance sheet forever. Who's country gets free currency.
Oh wait. We already are running MMT just that it's only for USA 😂
@@owenbenjaminshapiro6285 What does Climate Change have to do with Soft Currency Economics? I think the MMT folks would love to see massive government investment in Green Technology and efficiency.
What is said at 36 minutes onwards makes my skin crawl.
Warren is tenacious!
Watch the video before you read the comments
it's not complex its convoluted.
Do you a degree in economics and finance? because I am sure that a lot of people would like to know why it’s convoluted.
The point of MMT isn't to dictate right from wrong. It's to give people the clearest explanation of how our modern monetary system works. These guys didn't create the system, they simply theorize and debate its functionality and existence.
@@NathanRyanAllen The point is while its defenders claim this would be the case it actually isn't. Some of the presuppositions are just blatantly wrong.
@@cyrusol Such as?
@@NathanRyanAllen That money is only created by government through spending. That taxation would be the thing that gives value for a currency. That inflation should be the only limit for a monetary expansion.
At the 42 :20 of thsi video Mosler calims the zero interest rate in Japan has not caused their currency to go down. Utter B.S, since Japan's currency has fallen 35% since the 1990's compared to the US dollar which has also itself fallen to approximately half in purchasing power over taht period.
The public never hear about guys like them who offer different ways in dealing with the economy
Great interview with a great mind. Nice work RVF.
I believe austrian economics for many is easier to grasp, while listening to a MMT is alot harder. especially if your knowledge in economics is limited.
MMT works because most people think of money in austrian terms.
Can you post the article Mosley was referring to around 10:00
How's mmt working for you?
Too bad half the time he's whispering and at a mile a minute. Did anyone hear his points?
He's clearly not confident in what he's saying.
Why keep a standing supply of unemployed workers? I want a standing supply of jobs, so that workers routinely reject lousy jobs. otherwise it's a buyer's market with someone taking every lousy job someone lists.
Because if they do that then who'll do those lousy jobs? They need someone doing it.
But Don't worry pretty soon the robots will be doing those jobs and people will be getting free money.
After a few more decades the robots will even b paid for those jobs and they will spend the money as well.
@Rabble Repository hahahaha, Spock was imagined by a fantasy writer half a century ago... He's not actual future.... I think you've b paid n exposed to too much fantasy. 😂😂
T
When unions lose influence, a UBI can give bargaining power back to people.
My thought is why can't local govts be currency issuers too? Why can't Texas issue longhorn$? Why can't the town of Kelowna, BC, Canada issue kelownies?
The central bank and private investors could buy these local currencies on a DOMEX (FOREX for domestic trade).
The Central bank currency could then be based on an average of all DOMEX traded local currency values.
Another option is to have state or local currencies only. The dollar or euro could merely be a special (central) bank card issued to everyone that automatically converts local currencies when you go to shops in different countries (think using Mastercard as a Canadian to buy souvenirs in the US). Like this, the state (or nations in reference to EU members) could adjust their fiscal and monetary policies which cannot happen with a single currency.
And some may point out that private and state currencies had existed in the past. That is true, but they were gold or silver backed. MMT thrives on fiat currencies.
Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊
Elephant in the room is; If they're spending it before the purchasing power is transferred that will introduce inflation.
What if all this money being created goes into non-productive endeavors such as asset prices? I'd like to hear Mosler have this conversation with Richard Werner. Make it happen Realvision!
The money goes to government spending, not directly to investors.
@@robertbrandywine Yeah so we don't have to wonder if it is going into non-productive endeavors, we know it is...
@@robertbrandywine the money makes its way into private economy via bank lending, but what if that lending goes towards asset purchases? I like Werner's very simple idea of restricting lending for asset purchases (though maybe allowing for mortgages for primary residences)
@@freddieg7131 Exactly - Straight into non productove areas which politicians have decided on to allow them to carry out their plitically biased programs. Nothing to do with productivity.
Govt creates the dollars to purchase goods and services that people produce. As the banks are agents of the Govt (operating to create dollars under govt regulation) then Govt can enact regulation that prevents its agents the banks from producing speculative credit as Richard recommends, Bank Credit Guidance or Window guidance. I know both Richard and Warren, and each of them espouse this policy. Bank Credit Creation for GDP based transactions, not for speculation and bidding up prices of existing goods and services eg housing for instance.
well if money system is dependent upon monopoly then I would rather have opensource blockchain which expand money supply based up economic need be the monopoly.
I'm inclined to agree with you. However, how would the blockchain monopoly mechanism - as the functure that enable complex large-scale exchanges of "products and services" (that people create and need, or create and crave for reason of drives that are neurotically compensatory in nature) - be guarded, against manipulative info-tech wizards/politicians who are driven by *unhinged* greed or an *unhinged* "messiah complex" or hunger for power?🧐
How would you provision government? Part of the reason we have a monopoly on the currency is to move real resources from the private sector to the governmental sector ie building up national defense, police, fire etc...
Would you rather live in the jungle, where you would be at the mercy of many of the other inhabitants of this planet?
@@richardmillar2412
My thought is why can't local govts be currency issuers too? Why can't Texas issue longhorn$? Why can't the town of Kelowna, BC, Canada issue kelownies?
The central bank and private investors could buy these local currencies on a DOMEX (FOREX for domestic trade).
The Central bank currency could then be based on an average of all DOMEX traded local currency values.
Another option is to have state or local currencies only. The dollar or euro could merely be a special (central) bank card issued to everyone that automatically converts local currencies when you go to shops in different countries (think using Mastercard as a Canadian to buy souvenirs in the US - you don't need to exchange currency, the card does it when you swipe). Like this, the state (or nations in reference to EU members) could adjust their fiscal and monetary policies which cannot happen with a single currency.
And some may point out that private and state currencies had existed in the past. That is true, but they were gold or silver backed. MMT thrives on fiat currencies.
What is the difference between QE and the Fed crediting somebody when the Treasury asks them too? Both put dollars into the system.
QE is an asset swap between reserves and bonds. Under MMT understanding, both are functionally “money”. Bonds are just ‘future’ reserves. Reserves are to bonds as checking accounts are to savings accounts.
QE is different in that since they can’t print money without congressional approval, they use QE, the purchasing of treasury securities ( collateralized debt) to forgo congressional approval to introduce money into the banking system (emphasis on the banking system not the economy). Once the Fed buy the treasuries which are just USDs locked away for a set number of years 1, 2,5,10,20,30. They mostly buy 1Y Treasures during QE and then they swap them with other central banks and primary dealers (banks) for cash to spend on whatever they want. In essence the way it’s accounted, cash is swapped for cash( in the form of a collateralized 1Y treasury) the collateral ofc is U.S dollars. So after 1 year the Fed pays out the banks the equivalent of what they swapped from them. It’s done this way because the Federal reserve act doesn’t allow the Fed to buy/sell anything except collateralize treasuries and issue U.S dollars.
I'm sold
"If you can come up with a reason they weren't going to default, there was a lot of money in that trade." Countries have defaulted on fiat throughout history. This seems like a great MMT example of making up a narrative to support your position instead of the proper investing route, which happens the other way around.
defaulted on their own fiat? post ww1 Germany doesn't count because they were ding the exact opposite of what they should've been by buying foreign currency and gold to pay their debts in.
No country has ever defaulted in their home currency. It was always foreign debt. Silly.
You obviously missed the entire point of MMT, I suggest reading the Deficit Myth. Only countries that actually has the privilege of operating under MMT can never default. There are plenty of countries that don’t operate under MMT, meaning they don’t have monetary-sovereignty, they aren’t the sole issuer of their currency, they don’t tax it, and it’s not back by any commodity that is limited, the country that has Monterrey-sovereignty will never default and has never done so and will never do so.
it isn't even possible to default with a fiat system if debt issued in your own currency
Give me examples from countries that have defaulted into their own fiat currencies. This is for me, as illogical as saying that the bank broke in a match of monopoly(the game).
Excellent.....easily worth another listen and a download
Mosler says it's just a balance sheet but China just had a balance sheet sale
Monetary policy is very simple these days. You go further in debt to start to get your way out of debt.... errrr... yea I think that's how it goes?
Yeah.... totally. thats totally it.
No no, MMT states that you never have to pay back the debt. You can just keep printing and pay back the old debt by borrowing more. It never has to end
This guy was not specific - he seems to understand how it works, but doesn't explain well. That Stephanie Kelton is more clear on explanation.
Bottom line, is spend now, tax later and as long as the debt to GDP is under control, and we have inflation in check, we will be ok.
Inflation is in check for now, because the Fed is buying all the Treasuries available for sale, providing liquidity for the market. That 10 year Tres Note yield is important. The Fed has to make sure it doesn't go up beyond 2-3%.
So if the yield on the 10 Year Note starts to rise, it means people that own these notes are SELLING creating upward movement in the yield. When they sell, they are creating cash for their accounts. BUT if there are no takers for the notes, the Sellers have to drop their Ask price. When sellers drop the ask price, to get someone to buy their notes, it means they concerned that the US may not pay the note - or the threat of inflation. They want to beat that inflationary curve.
However, when the Buyers for the debt drive the PRICE of the US Tres debt down, by not stepping in, the Fed basically prints more money to provide the liquidity and buys all of the debt in the market.
There are two opposing forces that the Fed is attempting
A) the control on inflation - by keeping it under 3% - we continue to have a society based on debt, and people work to pay off debt.
B) The control on deflation - the thinking is that in deflation, people will delay their purchases in anticipation of prices going down. Example when gas prices are going down, you may wait for the next week to purchase cheaper gas.
Deflation means money in essence is "destroyed" is the term used. And that's leads to inactivity in the economy. These are on broad terms.
However, Technology has been a deflationary force example - TVs gone down in price, you can buy more memory for cheaper and computers cost less today, than they did years ago.
So really, with the complexity of the US Economy and the behavior of people's spending patterns - NOBODY really knows. Economists and University professors break their heads in these discussions. We can only LOOK BACK and determine the outcome.
The state should have the monopoly on money creation just how he says it, BUT IT DOES NOT! Money is created as credit, and credit is created by private banks! The only thing that counts, is what new money (in the current paradigm credit) is used for, and instead of having the state use credit for public works / in the public interest, or at least have credit used for productive purposes, credit was used for speculation! When a dollar of new credit creates less than a dollar of GDP growth, which happens when the overall debt is so high it can no longer be serviced at current rates, you actually destroyed wealth! You still get redistribution effects, but you destroy wealth. - The new money needs to go to public works and the poor: if it ends up with the rich, it only drives asset bubble inflation, but not real growth. - You need to put the new money in the system at the bottom or in the public interest. If the new money gets only issued to the rich you get corporate takeovers and buybacks and stuff, that only further aggravates the problem, as it solidifies the 1% vs 99%, which will produce social unrest and change the political landscape in an unforeseen manner!
haha, 'new money needs to go to public works and the poor'. Funny how ppls political bend can pop right out of a comment.
Get out of the machine and use Bitcoin.
Can anyone explain what he means when @ 36:00 he says "We don't begin (our MMT) with the state collecting money and spending it because there isn't any."? Since there are numerous currencies available to the state I'm assuming that he doesn't mean that there actually isn't any money out there to collect but rather that there isn't any money out there that the state can spend in such a way that the effect of it's spending can predictably and consistently direct private spending into enterprises it values higher than does the aggregation of it's people (the private sector).
He is wrong because he says "we begin with a tax liability. We don't begin with the state collecting money and spending it because there isn't any" this is a false assumption because the state itself cannot and did not exist without some sort of agreed money be it a precious metal or other just like in recent times the Euro did not begin with tax imposition but with an existing currencies being purchased at an exchange rate for the new Euro.
Taxes do not make the state's new money valuable and the evidence of this is all of the state's money that failed to have any value when it was expanded so much that it resulted in massive inflation and hyperinflation despite taxes imposed by the state.
MMT proponents like Mosler have no answer to counter this fact and they just ignore it I suspect becasue it kills their theory.
Added to that the idea that taxes create people looking for work in the government does not fit with even MMt's version of reality since one of MMT's other claims of taxes being destroyed after collection and not funding government spending.
How is this different from QE and the principles of monetary policy? We can already print money and add it to the economy. The big equalizer being inflation. How would this effect inflation differently in anyway ? Is there something I'm missing here .
Using fiscal policy to increase the amount of currency in the system allows for more targeted spending that can lead to more optimal outcomes. Federal job programs, infrastructure etc.
We are already doing MMT. The debt is huge and it keeps on going. MMT is no big deal, except for the fact they bet the farm on debt. Think of your personal finance, its always nice to NOT have any debt, that way you always have the option of getting a loan if you run into hard times.
MMT the debt is maxed to the point where any new debt directly goes to inflate the currency.
Mosler is talking small change, borrow this, print that, no big deal but its just like the son who keeps coming to Dad and borrowing money. The son never understands the value of a dollar; ie the value connection between real goods and currency is lost.
Households, firms, and governments that use a currency they don’t control can get into insolvency issues when getting into debt.
Governments that issue their own sovereign currency do not need to borrow in that currency. This is the main point of MMT which throws away whatever notions of debt people have.
When the government sells securities to the private sector in exchange for currency (which it issued previously), its simply a swap from a non-interest bearing government issued debt (cash) to an interest bearing one (securities).
It is not borrowing to fund the government as governments that print its own currency does not need to borrow in that currency.
The cash simply disappears. It is reappears when the Fed buys back those securities.
The non-government held national debt is simply the US securities that was bought with cash that the private sector saved. It’s the private sector savings in securities form.
No need to worry about it.
I have so much respect for Mr. Mosler, and hope for the MMT movement.
It hasn't created Zimbabwe yet, it can't go wrong.
@@Tenebrousable, What does that even mean?
@@muserwood That Mosslers assumptions are critically upside down, and it will turn in to Zimbabwe. Government can't ensure spending happens with "unused resources", scarcely even partially. Employment alone. It will bid up wages. And the unemployed will remain unproductive. They need deflation, to work for cheaper, to make them profitable. Government jobs programs will be using real scarce resources and materials that private sector could have used to turn a profit. Now the resource is spent and prices are bid up. People run out of money to buy the product. Company goes under, and poverty gets worse. And the monopoly of money is now broken, forever. We have a real alternative, an absolutely scarce money. 21million max.
Love the Star GATE Rug Patterns on the floor, very clever>>> Excellent insite on ECB , FED, central banks. We spend before we ever have Green deal, LOL>>>
Here to figure out what MMT is because of Adam Friended.
If more engineering students created financial models based on MMT it's adoption by economists would be far greater.
@@lostalone9320 actually, they do, but not the typical ones. Delta U = Q + W, for example, by substitution yields Delta GDP = M + W, where the change in GDP equals the net result of M, stimulus, ('cash' resulting from the change in government deficit spending), added to W, economic productivity. This action will either increase or inhibit total GDP output. Of course, this is a generalization of the First Law of Thermodynamics applied to economic systems but it works and there are other physical models that work as well.
@@genecat
◇ or ♤ can work for delta. No need to keep spelling out 😋
It's true that the gov't can finance its entire operation with newly created money in place of conventional (confiscatory) taxation, but that is never without consequence. Changing the ratio of money in circulation to the actual goods and services being produced by the economy (aka currency inflation) will invariably produce price inflation, although not always instantly, depending on the currently prevailing 'velocity of money'.
You are right. - Prices are a relationship between available money and available goods or services.
unless there is fiscal space...
Fast forward to 2022 and how is that inflation working out? BOJ owns a large part of Japan. Crazy talk. Reminds me of Long Term Capital Management’s confidence in their strategy until it failed catastrophically.
Correct me if I'm wrong here, but I think he explicitly says that money creation without increasing taxation will lead to inflation. So long as additional expenditures are matched by taxation, the velocity of money in circulation is going to be unaffected.
If the tax system is properly-tuned with MMT in mind being the key. To pull off something like an employment guarantee in the simplified examples, your tax system just needs to be pre-built to indirectly absorb everything you pay your new employees back into the government in the same tax cycle. In that case, the money being saved (economic assets) remains stable and velocity in the private sector should be unaffected.
What happens if the dollar loses reserve currency status?
@TrollMaster Fictitious Fables of Europa it's not. MMT Literally depends upon exploiting reserve status of the dollar
Excellent Stream, experts like Warren Mosler give me HOPE. Bernie's Financial Advisor is a Professor of MMT as well - Stephanie Kelton - it's how we're going to pay for it.
You Must be desperate to be asking this guy to give you hope. He only has hopelessness to offer. .
@Rick Vis Weimar was asked to pay reparations in French FRANCs, not their own sovereign currency.
@Rick Vis LOl you just got owned and don't realize it. Germany according to MMT would have been able to spend that is to say pay back their reparations in full with no risk of default had they been allowed to pay in their own money.
Yeah well Biden's economic advisors were steep in MMT. How's that working for you?
Bertrand Russell said the best way understand a concept is to listen and buy into someones argument first, then critique it second. Sadly lacking in comments below!
If you just look for confirmation bias then you will never expand your knowledge.
@vertex2100 i think you should watch the bit about where he talks about rates again. and your just regurgitating Austrian mantras that only account for a single part of a complex decision making process for businesses. loan rates are not just set by the central bank, the type, length, risk, collateral involved are all more important factors of the price of borrowing.
no one school of economic thinking has ever got it right, in fact they all get most things wrong. whats important is that different schools of thought reveal different questions to consider, even Marx does and am no fan. this guy whether you agree with his conclusions or not offers a valuable in site into how the reserve system works.
8:27
47:03
47:38
Surely Zimbabwe was doing MMT .....why the rest of the world didn't ship them food, goods and raw materials for THEIR MMT money ?
Smart dude.
Bitcoin fixes this
This used to be called inflation or currency devaluation. MMT is just an attempt to rebrand something everyone knows is bad as something benign.
hi james. i totally agree the world has gone completely mad. mmt wont end well
MMT spend first, add to debt latter. The main point is MMT is all about increasing currency supply.
Interesting when Mosler states the currency has value because its needed to pay taxes. So cryptos will be controlled by government when the public conducts significant transactions with it.
The best way to get rid of the curse of currencies, including the dollar, disasters, collapses, monopoly ogress, crises and wars
Scientific and technical development in general opens horizons that did not exist in areas that no one has addressed before, as it develops work and elevates it
My humble opinion is that the economic system and the mechanisms of its employment and directing this development and the speed of its response to it is the key
I want to repeat my presentation under my main name in the civilized dialogue website and its basis
The best benefit we can get through artificial intelligence to calculate the value through one measurement knowledge of scientists for the value just like the units of measurement in the ISO system such as meters, joules, lots, pascals, volts, amperes and bits..... And blockchain technology to manage its circulation and get rid of the concept of currency
To get rid of the curse of coins
So far I haven't seen a person who can explain MMT in a way it can convince a common man. This type of pseudo-elitism is not very appealing. Even quantum physics can be explained in a layman language so a kid can grasp its basic concepts.
Jan Klosowski Check out Stephanie Kelton TH-cam video on MMT. Lots easier to understand than this
@@soulmate805 I will. Actually, I start to understand MMT. It doesn't mean I agree with it.
The main flaw is giving the government too much power. I believe that every power will be misused. It's in human nature. Therefore, I find MMT utopian. In the long term, it will lead to a disaster.
@@JanKosowski and so will the status quo ... so maybe some overarching indoctrination is to blame ... wouldn't you say ?
@@UnhingedBecauseLucid I prefer to stick to MMT discussion. The theory describes (and justifies) something that is an arbitrary choice in the first place. I would rather start with questioning the choice instead of looking for better framing for it.
Metal doesn't come from the government - it comes from the ground. Ancient governments could and would take foreign money, jewelry, and purify metals. Silver and gold prospectors could have ores of various purities stamped into standard coin - this is how Mansa Musa became one of the wealthiest men in the world. Governments cannot *issue* metal in the way they can issue paper currencies so the two banking paradigms are not equivalent, perhaps that is why his point frustrated that poor man. The private sector *can* - through trade and industry - pay the government before the government spends any money. We do not *have* to back the paper with debt instead of a commodity like before Nixon closed the gold window.
Mosler's gaps in education on monetary history might be distorting his views of how money must work. This is a very new experiment in debt-backed fiat banking. Since 1971 - for the first time - the world has been on a paper standard. We will see how it ends, but I'm skeptical of his certainty that we have reached a complete theory of money.
Metal is far too expensive. Computer money is cheap. Realty check : cheaper always wins in this world!
Why would a sovereign nation allow metals prospectors and traders to control their money supply?
@@Pushing_Pixels Yeah, who needs controls? Or history books for that matter. You guys will make it work this time.
@vertex2100 Right?? 🤣
"Negative interest rates is a tax on rich people" - Really?
Rhetorical, right?
@@traderbilly5939 Low interest rates increase the value of future profits because they are discounted with the low rate. So asset values increase today. Negative interest create an even bigger boost to the value
It isn’t a tax on “rich ppl” it’s a tax on ppl with money/saved money. “Rich ppl” take out loans too. So it’s kinda a “tax” on ppl without loans. As far as I understand.
In the short term yes. In the long term it does not favor the rich. He is taking about government bond payments going directly to the people with money for them to have more money, why??
@@lukesplettstoesser1558
If people pay interest on loans, would a negative interest rate mean interest pays me?
My question is this if MMT is this effective then why did Russia default on external and internal debts? They have their own printing press shouldn't they have been fine?
MMT talks about Japan being the example. MMT people are correct that Japan has been able to keep it going for 30 years but doesn't the Japanese government own a large portion of their bond and stock market?
The Russian Central Bank is staffed by neoliberals trained in the West so they make the same mistakes.
@V J you're trying to suppress my freedom!
The question is not its effectiveness in comparison to any particular orthodoxy simply because the purpose for which some are considering it now is as a p a l l i a t i v e to take the edge off what is essentially a p r e d i c a m e n t.
@vertex2100 The rentier class would call it "making sure the frogs aren't startled while the pan heats up."
Ultimately, it doesn't matter all that much in the long run because very few will escape the turmoil that's coming...
I've no doubt Japan had the blessing of the Empire, ...sorta.
Not the case for Russia.
At that level, there's no such thing as Geo-Politics free banking...
His theory is right assuming the investor class goes along with it.
But if the currency ceases to be a value store then investors will be incentivized to hold alternate sources of value.
Our current bout of low interest rates have incentivized investors to chase yield regardless of risk.
I'd be curious to know what he expects if we effectively decouple yield from the price of money. I think we would disagree.
But the investor class must pay taxes unless you live in a corrupt society that allows the wealthy to evade tax. The tax ensures people must pay money to the nation and thus creates demand for the currency.
MMT can minimize hardship during the covid recession.
@@lostalone9320 - Nonsense
@@lostalone9320 Treasury -> masses -> sales -> jobs -> taxes. MTD unemployment benefits > MTD social security. Benefits > wages. Without benefits there would be mass hunger and homelessness. Shorts resent MMT. Sad.
That is what we have seen with all the stimulus spending.
check the fed balance sheet. It already did
MMT can only work in a perfect world driven solely by natural market forces ...
Central planning makes it highly susceptible to political influence that allows our govt to make arbitrary decisions on how to allocate wealth while the middle class takes the hit.
cool
While I totally agree with the theory and understanding of money operations, MMT doesn't actually disprove any of the other economic fundamentals we've traditionally held. It just reframes how we think about the origin of modern currency in that it comes from a monopolistic supplier in the form of government. The issue is that government is a human construct. We don't intrinsicly need the government to issue money for societies or markets to function. Just like the theoretical "base case" created by MMT, we could create an equally valid base case in which no government exists and individuals demand goods and services to meet their needs and desires. That demand creates suppliers who are willing to provide those goods and services. The individuals then compensate the suppliers based on what they're willing to pay for the goods they demand with something of equal value. Naturally, some sort of currency arises to represent the value of goods and services and make exchange more efficient. And now we've arrived at an equally valid theory resembling free markets.
Can you have a system with no government? I followed your economics but in reality is it possible to have a nation without government. If the US government disappeared tonight, many different groups would seek to replace it both from with and without the US.
@@MrFiendinpotter you're right, but my point isn't about government, it's about the existence of markets in the absence of government. Without a government issuing a universal currency, trade would still exist. This is an historical fact. Universal and fiat currency is a relatively modern idea. Trade and markets have existed since people bartered for fish in exchange for grain. The question is what really has / should have more influence over our money and our markets. MMT-ers believe it's the central government; free-marketers believe it's the individual and the combined demands and desires of many individuals.
@@MrFiendinpotter *Did you just describe Afghanistan?* 😂
@@dragon__soup *Free marketers should just go look at what happened to the native americans, getting whooped by a centralized government.* 😂
MMT is like a motor with no governor for speed control. It's fun to see how many RPM's it will turn until it blows up.
I like how conservatives watch two minutes, smash the dislike and start typing up a fury in the comment section 😂
Modern monetary theory is simply an explanation of how sovereign countries issue their currencies. The idea that spending comes before collecting revenues and dilution.
This is the case with our military spending, our tax cuts, our wall street bailout, etc. His main argument is expansion for spending should include a job guarantee for unemployment, because our current inflationary system maintains a certain level of unemployment, by principle.
Japan's debt to GDP is around 2.5x larger than the US, and the value of the Yen has grown substantially more than the value of the dollar over the past 30 years. But I thought all debts were inflationary?
MMT's co founders Mitchell and Mosler both emphasise that it is merely a framework to view the economy through, rather than something that is left or right. Kelton probably pushes it being a little more progressive than they do.
52:48 - one side note Warren Mosler's quad hulled cat would be immune to conventional torpedoes because like a car it only has four contact patches. modern torpedoes try to lift the ship up to break its back in the middle, and Mosler's quad hull design doesn't get wet in the middle.
You are wrong because modern torpedoes can detonate under the ship without physically hitting it to set off percussion cap type of trigger. They breaks the back of the ship. They do that by either thermal image detection or by magnetic detection. They would sink his quad hulled vessels just like any other.
@@Rob-fx2dw did you listen to how he said that if the middle of his ferry never touches the water, it would be lifted up by the pontoons on all the four corners? Go ahead try breaking a board by lifting it by all four corners. You're wrong.
@@JinKee Look at this mark 48 torpedo explosion.- Almost any ship would be broken in half by that amount of explosion with the initial rate of propagation of the explosion at close to 32,000 feet per second !!
Besides all that the design is very, very limited by the aft hull running in the turbulence created by the forward hull.
It has all be tried before and rejected for a number of other reasons including high risk of structural failures.
I'd like to know what the purpose of taxation is, if printing and spending seems to be the entire strategy here.
To control inflation. And to change behaviour, like taxes to curb waste, polution, and carbon emmisions. Taxes can also be put on cigarettes and alcohol to limit use of these substances.
Skar Scalp Tough. That’s the literal price of citizenship. Surrender it and move or run for office and change it.
@Skar Scalp it doesn't have to be used on cigarettes or alcohol, it was just an example. It can be used to get companies to behave more ethically.
Y T You really don’t know how democracy works, eh? *pats head*
Y T Lol, tell us more about the “encouraging people to run for office to change things” wing of fascism you think exists
I find it hard to understand what he is saying. He is using too many difficult words too quick. I like listening to Peter Schiff, he explains Austrian economics for dummies but still goes into detail.
Is there any equivalent MMT guy that explains the advanced stuff in a simple and clear way??
ill take "what is inflation" for 5000 Warren.
"Didn't watch the video" for 500
@@johnberk9315 ill take "inflation in the past 2000 years" for 500 warren.
"How to finance the green new deal ? - congress appropriates the money, treasury instructs Fed to credit the appropriate accounts." - Mosler
"Yes.That's how we pay for things. We change the number in the accounts" - Alan Greenspan
MMT = Monetary Magic Theory, or simply an accounting entry
Leftists ignore the fact that Germany's C02 went up because they replaced nuclear base-load power with intermittent wind and solar forcing yhem restarted fossil fuel plants. Now they are stuck paying 30 cents a KWh.
I have studied MMT for 4 years. I agree with 99% of MMT, but the idea that higher rates are stimulus is RIGHT ceteris peribus, but it is WRONG in reality. After 40 years of Fed puts and multiple expansion in the stock market, if interest rates are raised, APPL would be trading at 12 times earnings at 5% interest rates rather than 35 times earnings at 0% rates and QE. Imagine if everyone woke up and there stock portfolios were down 50%! Higher interest rates would also tank real estate and yes, money would flow from the gov to the private sector thru bonds, but net worth would crater and this would be restrictive, not strimulative. Someone please tell me why I am wrong
You are dead on accurate, and it's why MMT is a little too idealistic to be effective long term.
As of today, we have APPL is trading near highs. PE is 32.77 not 12. Interest rates are 5.25%. Real estate hasn't tanked, in fact, they're more expensive than ever.
Thank you Warren!!! Why are they taxing the people?
*Drive the currency.*
Would take a look into "The Venus Project". Imo way more sustainable idea as it moves past constrains like monetary systems.
Yet you can't solve price.
The Venus Project is laughable and last i checked (through their material and emailing multiple people affiliated with then. Best i got was one person on facebook giving me an answer like "we'll worry about that later) they have zero clue about how to deal with econonic calculation, nor are they even interested in thinking about.
Paul Joseph on the other hand tries and fails to deal with it. Even removing the one video they had on it, but last i check still talked about it on their site. However they admit that they dont know how to deal with it. That they have no equations that work. And that someone else (or multiple people) will have to work out how it will be done later (but ive respect they at least acknowledge it).
But arbritary numbers entered into an arbritary equation will always return meaningless answers.
On top of that they rely on the ignorance of the masses to peddle their poison. That being economists dont consider resources! They pretend theyre unique in many ways. But scientific collectivism has been pushed since at least Marx, and tried in multiple countries. And it still failed spectacularly.
And what really annoys me is PJ mentions economists like Malphus. Meaning the few RBE pushers who have read economists know one of their central premises about being different is a complete fabrication.
No, it's just new age technocracy for sillyheads.
I knew a lady who swallowed a fly, I don't know why she swallowed a fly, perhaps she'll die.
I knew a lady who swallowed a spider, she swallowed the spider to catch the fly, it wriggled and wiggled inside her, I don't know why she swallowed the fly, perhaps she'll die.
I knew a lady who swallowed a frog, she swallowed the frog to catch the spider, she swallowed the spider to catch the fly, I don't know why she swallowed the fly, perhaps she'll die.
At the end of this she settled for MMT
Using more debt to solve the excessive debt problem. It starts with money created from a debt that will never be repaid.
And then all was well!