Modern Monetary Theory: Australian economist on rethinking public finances | Q+A 2024
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- เผยแพร่เมื่อ 9 ก.ย. 2024
- Modern Monetary Theory encourages people to rethink taxes, spending, and public finances by reframing the conversation around money supply.
Modern Money Lab's Steven Hail says Governments shouldn't fixate on delivering budget surpluses. That is because, according to Modern Monetary Theory, New Zealand can't ever run out of money because it issues its own currency. He argues inflation won't be rampant under this system because increasing taxes can reduce the private sector's spending power.
Join Jack Tame and the Q+A team and find the answers to the questions that matter. Made with the support of NZ on Air.
New Zealand, since 1986, has been operating on a 'for profit at least cost' neoliberal economics and governance model, we are so fixated on making 'surpluses' the country has lost it ability to make long term investments in the country that has lead to short, cheap, quick fix solutions, thinking and planning, that has created the mess the country is in.
You ever wonder where all the covid debt went to? How much was the total package? Who do we owe debt to? Were any caveats agreed to Incase of us defaulting. AirNZ, yeah it's 52% taxpayer owned, but they got a NZD900 million loan on top of a NZD700 million wage subsidy then got another NZD600 million within the 1st month of the original lockdown. Them and the nzrfu were the 1st to ask for bailout money. No one seems to want to talk about the absolutely massive amount spent on a 'flew'.
New Xiland loves censorship
I'd argue doubling down on "being green' and nothing else is probably worse
@@bangarang3810 - What is wrong adapting to sustainable, environmentally friendly green economy?
@@chrismckellar9350 it costs at the pump, according to steve keen u can only run 4ever deficits if u have a export led economy, as tht will create demand 4 the currency like japan us and china
If NZ issues debt in its own currency it can never go bankrupt. This is true, however confidence in that dollar and the value of that dollar is another matter. If NZ ran massive deficits it's likely that we would see significant inflation devaluing the real purchasing power of that dollar over time.
thts right we countrys culd gt awy with it back in day as countrys had closed economys, and countrys that are export led can get awy with it, but thts nt nz
@@alistairmcnaughton1933 MMT doesn’t argue for that. It’s proponents are very conscious of inflation. The real issue is investment in productive capacity. Fiat money creation is only once source of money creation. Inflation nowadays is driven my bank created credit money, created for speculation on the PONZI property market. Private credit money creation for profit is the elephant in the room. The banks like to pretend they are intermediaries but they are not.
Not confidence, productive capacity. He explained that at the beginning.
That's true but to offset the inflation the spending must be on productive endeavours that boost productivity. Unfortunately a lot of spending, especially by the previous regime, did not boost productivity and resulted in the lingering inflation.
Youve missed the point entirely.
Even by your argument if massive deficits were run then unemployment would near zero before inflation happened.
Also because less welfare was paid out and more tax receipts would be received, those deficits would recede and turn into surpluses.
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Go watch the documentary “Finding The Money” if you have questions.
I agree. Anyone who thinks the NZ Govt caused inflation to spike when all 40 OECD nations had theirs spike, is saying NZ Govt had control of the phenomena, LOL. The reason to spend more on alternative secure clean energy sources, dissuading Russian aggression, developing speedy vaccine responses, etc., to keep inflation from spiking - not flail with austerity - is to accept we are all interdependent in terms of fighting poverty, security, energy, tech, education, peace, etc. Pay down the world's hard and aching needs, not the lesser and even illusory debt, as THE priority.
The reserve bank did. And they actively created a recession, and said they would. That's technology not the government, but in a way, they had to to control the results of quantative easing
Whats key as he points out is what that deficit is spent on.
Its an investment in the productive economy then all good it will improve all our lives, even if that longer term.
What we have now is a Govt thats cutting its budget when there is a global recession and rising unemployment, surely the govt should be counter cyclical to buffet these shocks ?
Now could be the time to spend on Infrastructure and health services.
Absolutely.
It's so refreshing to watch an interview with someone who moves the discussion beyond a the failed orthodoxy approach. The economy sits within natural world and we need a plurality of systems that protect people and planet. I'm keen to see more interviews with economists who haven't swallowed the cool-aid. How about an interview with someone who can talk about Regenerstive Economics?
Beware the titillation of sweet nothings in your ear friend.
Unfortunately this completely ignores currency trading, and that NZ needs to import goods that need to be paid in USD. The value of the NZD is determined by that trading process. If we behave like a South American socialist state, our currency will devalue, and we'll quickly learn the importance of managing our deficit. But what do I know.
Well you know more than the 'expert' in the video 🤣
MMT takes forex trading into account but it wasn't explained in this particular video.
At least someone knows something, I’m getting really concerned with all this modern day thinking, like it hasn’t been tried before..
@@bobtuiliga8691 that is not what he said. He said be aware of inflation, target money creation at productive investment, and that what we call Govt debt because it is denominated in NZ $ can be repaid because we are a currency issuing country. Of course we have to maintain International confidence. The real issue is decades of Bank created credit money and NZs high private sector debt - all wasted on property speculation. Bankers and their economists pretend they are intermediaries but they are not - they created the disastrous GFC for which Govts around the world then had to bail them out.
@@DavidTangye do you have a reference for that; I'd be keen to read. Cheers
We are truly living in an idiocracy.
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Good work Jack, now could we get someone from the other side of the fence, ie Bitcoin, on the show to explain how fixed issuance and deflationary economics will benefit all. Might I suggest Jeff Booth, Preston Pysh, Robert Breedlove or Lawrence Leopard
Imagine if kiwis could have more adult conversations like this instead of the continual tax and spend merry go round
Printing money just increases inflation
No it doesn’t
Not if you take it back out, there are many reasons for inflation yet neo classical thought doesn't accomodate.
Our national debt is 45% of 1 years gdp.
We don't need to go crazy but we're in a great position.
We need working ferrys ⛴️ ports and roads.
It's actually 43-44% debt-to-GDP
@@braydeny you should read more about what we call Govt debt. That in our current money system we choose to issue bonds and pay interest on those and bank reserves is the decision of Neoclassical economists. The real debt we should be worried about is our private household debt which is very high at 91% of GDP. It’s this private sector Bank created credit money that is the real issue because it has been used to pump up our property sector while infrastructure investment by Govt had been constrained.
@kevinmckay1955 oh yeah I'm totally with you on that one, I'm a massive dave ramsey fan and he teaches a zero debt asset building game and it works very well and quite fast.
@morgan_kemp you are correct I will edit it from 30% to 45% a fee months ago it wasn't as easy to find that stat and I may have read something misleading. Thank you.
I still stand by my argument though lol 😆
Did you even watch the interview?
If they can issue currency as much as they want without causing inflation why I have to pay tax?
Taxes remove money from the economy in order to make room for more spending elsewhere.
It's what keeps "printing money causes inflation" from happening.
Great let's try this for our public health systen and our education system at least. Fund it fully from the level of budget that is needed. We don't need Prof Levy, just the correct level of funding, to hires the people (front and back) and see how that goes. Still focus on the efficiency but that should be after. After all it is the outcomes we want right?
Indiscriminate funding won't achieve anything. Profit driven incentives based on service expectations is the only thing that will work
@@bangarang3810 is that you Prof. Levy? :)
Look at the USA!
So money means nothing...
I hope you aren’t just printing letters ?
Money doesn’t mean anything to a govt that just types numbers on a spreadsheet.
Try and tell that to your grocer, and walk out of their shop with apples, without police on your tail. It is exactly because money does mean something that government s can print it in favor of product and work done. To say that it doesn't mean something because it cannot be repaid is simply false.
@@stephenjones8114 you said something about a grocer for some reason ???
Govt debt is just tax credits (dollars) in the economy that haven’t been used to pay taxes.
Govt money is only 10-15% of the total money supply, the rest is bank created credit.
Bank loans create new deposits.
Jeez I hope that doesn’t cause inflation 🤦♂️
This rotted my brain
Why ? It’s actually true and correct.
@isawaturtle it is true and correct, that's the issue. What the gentleman is describing is currency debasement, which is one of the worst societal ills that a government can thrust upon it's people. Debasing currency directly led to the collapse of the Roman Empire and the US Confederate states, along with many other empires I'm probably not aware of.
This guy is simply dressing up the debasement process in a modern facade, in the hopes that no one will notice. Modern economists rarely study historical economics, so it's likely that he probably isn't even aware of the devastating consequences that currency debasement has.
@@jesseking9254 No he isn’t, you’re just harping on nonsense that someone told you once.
Look at the US and yet people still want US dollars.
Steven Hail is talking about targeting spending to focus building a better society.
He also explains how monetary systems works.
I wonder why people hate learning ???
It’s like that movie where the blonde is being chased by the murderer and she sees two signs - one to certain death and the other, to safety.
So she runs to the certain death way
@isawaturtle Zimbabwe. Richest nation in Africa to poorest because of currency debasement. That's where we're heading too.
@@jesseking9254 Not quite.
Zimbabwe
1) Kicked white farmers off their lands and gave the task of farming for the nation to freedom fighters.
2) Infrastructure so worn down by no investment and corruption
3) Central bank governor never past high school
4) Zimbabwe had to borrow in USD which it couldn’t get to pay back - dumb move
5) inflation came first and money “printing” second.
I wish people thought for themselves a little more and didn’t just repeat stuff.
Don’t worry I will have another 100,000 people say the same thing with no understanding.
Then they way Weimar Republic like it means something … the US didn’t lose WW1 but hey apparently the US will turn out like they did 🤦♂️🤦♂️🤦♂️🤦♂️🤦♂️
I find it absolutely incredible that our government gives $20billion windfall to banks. That's nearly 20% of the govt's tax take. $76 per week per New Zealand resident. Including babies.
They're quietly trying to sell kiwibank again too.
Not to mention the electricity generators.
What $20 billion windfall would that be?
@@billyruffian1426 the interest they pay to Banks on bank reserves. Didn’t use to happen prior to the GFC.
Forget equating the federal govt with a business or household.
Well this "specialist" has never heard of Venezuela before.
Keep printing money, what could go wrong.
They borrowed US dollars. Big difference!
MMT recognises the inflationary pressure from excess printing of money. MMT is and always was a description of how the economy actually works, so to be comprehensive it also describes the impact of printing excessively.
@@marcusr182is that your entire criticism? How erudite.
Just bring back the gold standard even 30-50% I think it'll fix surplus spending and having us to buy gold to increase 'gdp'.
MMT= Magic Money Tree!
Congratulations. You just discovered how money is created.
Banks do it, the government does it.
Correct. That is the reality of fiat money.
@@billwilson1320 It wasn't a recent discovery! 🙂
@@billwilson1320yes its called theft, theft of your limited time on the planet. Time you gave in exchange for magic money that some intelect in glasses can devalue at a whim.
When you understand MMT it all becomes clearer.
So much so that when people come up with shit then they really look naive.
The problem you will have is to convince naive people that they are naive.
That’s the hardest part.
Right at the end of this interview he admits his theory when put into practice might lead to inflation and/or a reduction of confidence in the currency. It is noteworthy that this guy has had no actual experience working for a government apart from giving seminars to the Australian Department of Prime Minister and Cabinet.
You obviously didn’t listen. Demand driven inflation when spending is driven by a shortage of productive capacity. Your criticism is personal not objective.
He didn't start MMT. Try Warren Mosler, who literally used to work in the heart of currency world and came to the realisation that most people - including those who govern the reserve bank, don't actually understand what actually happens. My own hypothesis is that we haven't ever really understood how money works since getting off the gold-standard, and everyone still reacts to the monetary system as if we were still on it.
He did not say that 😂😂😂
As he said. You don't put MMT into practice as it is how the system works already.
@@redrockcrf4663absolutely spot on.
These “economists” should review Argentina case and then be asked the same questions. Seniority is thief, it is inflation and that is an un-legislated tax.
whats your education level?
Argy borrowed in US dollars. NZ doesn't.
@@billwilson1320 Exactly
Maybe study Argentina to see why they have problems rather than just claim off the top of your head ?
They do consider Argentina, Warren Mosler talks about it all the time
As a New Zealander currently woking in a country that just "prints money" we have had 350% inflation in 8 months....this "print money approach" DOES NOT WORK, all that happens when you print your way out of a debt is to devalue your currency greatly, and prices jump.
This is because the country that you refer to is exceeding the absorptive capacity and productive capacity demonstrating irresponsible monetary and fiscal policy…
@@cplamac6447 yes, creating excess money is inherently inflationary.
You are speaking as someone making numbers up.
Oh. so after the GFC when Obama printed heaps of dosh there was rampant inflation?
NOTHING in MMT, no book, no article, blog, magazine or academic paper says "just print money". Suggest learning about MMT before making such statements.
He says that the NZ govt isnt going to go bust, but i do think he should have defined clearly what his version of bust means. An economy where the majority of people cant afford housing, struggling to buy the basics and unable to save for a rainy day, a currency no other countries want to touch, failing health system, failing infrastructure, failing education, violence out of control, i could go on. There is on paper economics and they there is reality of the health of the economy and its people. Zimbabwe is still 'technically operating'- people love there and go to work etc- but no one would ever say they havent gone down the toilet. I would argue being so far away and so small, NZ needs to do a better job relative to on paper economics than moat other countries. He mentioned Norway and Singapore... both incredibly rich countries because they have a govt culture of efficiency and low waste. I was in Singapore late last year and the wellbeijg of their country relative to NZ is palpable. Coming back to NZ after that teip felt like returning to a dysfunctional backwater.
except when they scream about it while in opposition, got it. always Nats get a pass to up the deficit while when Lab does it it's high crimes
How about we call out the irresponsibleness of both parties? Hmm??
Yes!
Depends where the government spends that printed money and deficit as to how inflationary it is, I think it needs to get spent on a good infrastructure plan spanning decades now. If the printed money is handed out with no long term return then we will see high inflation and a weaker dollar
So important.
Perplexing. I certainly prefer temporarily raising taxes to giving interest to banks. But I don't understand the rest
1. Why borrow money at all if you can print it? Can he explain how other countries get in trouble when they print money?
2. Why are our authorities spending money taking away carparking and making speed bumps in instead of fixing potholes? Why do they spend our money on things we don't want, sell our income earning assets, give our money to banks, then whine there is not enough?
We don't borrow. He needed more time to explain.
Spending money on healthcare, infrastructure, transport, education, policing etc. generally makes the country more productive so while it would increase inflation in the short term in the mid to long term it would decrease inflation as productivity/supply would rise therefore lowering prices. As long as you are increasing productivity by spending money on the country you can print as much money as you like.
Countries generally borrow money to fund govt. spending by selling securities as they see it as fiscally responsible because they have to repay that money with gathered taxes by a due date. One way out of this is to decrease govt. spending and lower taxes but I think his argument is that because you can print money you don't need to do that as long as you are spending on things which make the country more productive thus controlling inflation. Countries get in trouble when they print money in a corrupt or highly unproductive economy
@@jayrob5270 but thts the problem once u let the gene out of the bottle spending on productive stuff becomes open to interpretation....best to play it safe a scenario culd arise were we have invested in nz productivity yet havent received divined, just because we pay teachers more doesnt automatically result in more productive ppl
@@1112-g1x there are two sources of money creation - fiat ( Govt ) and credit money ( credit ). We let the genie out of the bottle years ago by letting banks create endless credit for property speculation and consumption. What we should do is reduce the role banks play and divert money creation to productive infrastructure investment.
They give away breaks to their supporters, it's called crony capitalism, and if you were an insider you would benefit too..
@nzqanda please set your default comment sort to newest in YT Studio when uploading each video. Nobody realises half the comments are hidden under the default "top" sort. Usually the intelligent comments.
Printing money?! Not like that hasn't been proven to lead to disaster except in every case where it's happened.
You can not spend more money than you earn in perpetuity. Debt has to be serviced, and that servicing could end up being so costly that we have to increase taxes, reduce spending, or continue to balloon the debt (causing a vicious cycle).
Greece, anybody???
Greece's situation was quite different due to being in the Euro - i'm not sure its really an equivalent.
@@JimmyKip
Thats a moot point. Do you follow yanis varafoucus? All neolibral economies work this way. Only difference with Greece is that the elite's decided those banks weren't too big too fail, and it gave them a chance to give BAIL IN laws a run, as opposed to BAIL OUT laws.
@@JimmyKip please feel free to respond to my more substantive points
@@morgan_kempThe us tripled the money supply from 2008 to 2022 without inflation. Actually a few other countries did as well.
Greece isn’t a monetary sovereign nation.
It uses the Euro which it doesn’t create, so your post is erroneous.
Read the bitcoin standard and the fiat standard by professor Saifedean Ammous, both available in audio book. Or don't, just don't complain.👍
Mr Hail says I am a modern monetary theory economist at Modern Money Lab Which is a think tank for monetary policy. always concerned about think tanks and who funds them. and how little thinking they do.
He has plenty of previous experience in the UK and at Adelaide University.
It's more interesting to question why he is appearing. Consider also, that 9 out of 10 viewers understood next to nothing of what he said apart from the message, "the NZ govt can issue as much money as possible and not go broke". The conversation about "communism" was revealing.
@@acegikmoii He is lecturing in NZ at the moment (Auck Welly). The interview was way too short.
Japan’s experience with similar policies shows that while inflation can be controlled, economic stagnation and limited growth remain significant concerns - without any potential avenues to pay down debt and return to surplus.
Japan is a successful economy. NZ not.
Thank god you are back, a proper journo unlike your colleagues who are so biased why TVNZ still employs them is amazing
I am not fully up to date with the latest deficit levels of NZ but Isn't the NZ govt already running eye-watering deficits within its government. So shouldn't the benefits of MMT be already present within the economic system?
There also is an economic article this weekend that states NZ is in the worst 5 countries in terms of real median hourly wages since the start of the COVID times. So all that 100 Billion spent to lock people in hotels and homes to delay the disease coming into the country didn't create these imagined benefits like what this esteemed academic has stated should be flowing through the economy right now.
Nz defecits and public debt are very small. Their size is not a concern. What the defecit is spent on may be. We suffer from short term thinking, hence our massive infrastructure defecit.
So the solution to the cost of living crisis is for New Zealanders to simply switch from being currency users to currency issuers. Then we would never have to worry about running out of money... [joke]
The govt. isn't a user. He covered that.
Mainstream economists are the cranks. They don't use money, banking or debt in any of their models.
Individual New Zealanders are not Sovereign entities and therefore cannot print money. If they do the government has laws because that is what is counterfeiting.
Only the government can create currency...but:
“Everyone can create money; the problem is to get it accepted“ Hyman Minsky
@@DavidTangye I've edited my comment to make it clearer - see square brackets
Unfortunately we NZ trades with rest of the world…therefore we require our dollar to be of worth to other nations and currency speculators
True. But what are the mechanisms at play here? Those of Bretton-Woods. And they involve all boats rising upon the same tide. Sort of. And it is not as if NZ is alone in becoming a pariah. Oddly enough, we are a country too small to make any meaningful difference in climate change, but we are a titan when it comes to showing the world how to behave like a business. Just look at all the children we are prepared to sacrifice in order to meet budgets.
The US can print currency because they (for the time being) are the world’s reserve currency.
NZ does not have this luxury.
NZ doesn’t have the absorptive capacity that the US does. Yes, US has greater flexibility but that doesn’t mean NZ should apply neoclassical artificial rules….
@@waikanaebeachabsolutely agree. NZ can still print money if there is no resource shortage causing inflation.
All govt spending is with a new dollar created on a spreadsheet.
All govt receipts are dollars deleted from the spreadsheet and economy.
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The government already print money. So the argument does not hold.
The important point is that MMT is a truthful description of how the economy already operates. Money is printed out of thin air, and people want and work for it nonetheless. Neo-liberal policies, contrawise, manufacture poverty to secure their bankrupt moral thesis. Wouldn’t it be good if it was all “user pays”, and I could buy people. If those who could not pay would simply crawl into the gutter and be silent. In the real world, meanwhile, those pushed into the gutter retaliate and cost ever so much more in crime. The innocent child is consigned to penury as collateral damage. And even though the punishments, pursuing the same bankrupt moral thesis fail, there is apparently no limit to the money that can be accessed for prisons and boot camps. Thereby the self fulfilling nature of the corrupt economic/moral position secures sufficient impoverished and incarcerated instances to scare the populace into believing that there is a shortage of money. Otherwise, after all, these atrocities are but the decisions of governments. Albeit, one has to wonder, are our politicians so constrained by their own bankrupt ideology, or does America via the IMF insist that NZ impoverishes our kids and accept the greater crime?
Stunningly misguided and factually wrong. This theory might explain Japan, but that doesn't mean it's good policy for us.
@1:20 "the New Zealand Government doesn't have to go and find its currency from the private sector". Yes it does, the bond market is the expression of private sector confidence in the debt issued.
@1:47 "every dollar the NZ Government spends is a new dollar". Just wrong. Spending from revenue is spending existing dollars.
It has been a while since a bond market strike. Liz Truss managed to stimulate one in the UK. We do not want to poke that bear here.
Operationally the government does not use tax revenue or bond sales to create deposits in the private banking system. In any case, it is logically absurd to say that the NZD used to pay a tax liability or buy a bond ultimately originated from revenue or a bond sale as they logically pre-suppose the existence of NZD.
Where do you go and find letters to make this post ???
The govt adds numbers to a spreadsheet like you add letters.
Learn how the system works.
That guy has a really large brain!
Pretty impressed how the interviewer seemed well-briefed and knowledgeable on the topic
😂
There was an Austrian in the 30s that sold a country on this. He socialised many of the businesses and made the remaining private businesses accountable to government overseers. He made train travel very cheap, subsidised many sectors of the economy, printed money flat out to pay for government run infrastructure projects. Good socialist behaviour which is promoted by certain political parties within this country to this day. Other nations around the world were in awe of this, they event hosted the Olympics to great fanfare. We have the benefit of hindsight now as we know that eventually that country had to take drastic measures to keep things in balance. Eventually the maths came home to roost. Other countries have tried it since, from Venezuela, North Korea, Cuba, etc. Sadly I live in a world were we actually have to make a choice if maths is real or not. I believe maths is real
And it was extraordinarily helpful that the U.S and allies sanctioned that country for using their sovereign currency as they thought best, for their people. I am sure the capitalists in the U.S who so sanctioned and made that system unworkable had the well being of the peoples living under that currency in mind, not their own profits. Indeed, Russia does the same thing. And no matter how many sanctions are applied, that country keeps operating.
What are you talking about? Hitler literally invested the concept of privatisation and sold state assets.
NZ currency should be backed by a commodity/ gold in RBNZ.
Instead its just paper. And if that can be printed at will, uts worthless
Norway gets revenue from other countries due to their investments lol
While NZ pays interests to lenders, like this guys employers…
People have to know what real money is and its purpose, or we fall for these con artist, a bit of history,
What is real money? gold/silver whats is purpose? to hold purchasing power for the people over long periods of time.
Example, 1830ish you could purchase a 5 piece suit for $20 1oz of gold was the same price, u could swap the paper for the 1oz gold coin and visa versa.
Here we are 2024, 194 years later how much of a 5 piece suit can you purchase today with $20?? not much, yet real money 1oz gold coin is around $4000 NZD, so real money did its job held purchasing power,
So if people arent working for money what are they working for?? fiat currency, bit of history again,
USA became world power and world money reserve since 1946 after WW11 since USD was as good as real money, all countries linked their money to the USD,
Since 1947 onwards, USA and their allies invaded many countries, WARS were fought with real money,
USA ran out of real money because of their wars, so they took the world off the GOLD Standard in 1971 which allowed their banks to print at will, Every time they print 1 USD it dilutes purchasing power for the people globally, the more they print, we the people lose purchasing power,
Here we are 194 years later, USA print trillions to cover their huge deficits, so we the people lose huge purchasing power, we are all feeling the cost of living globally,
These con artist, so called expert want to bring in their CBDC central bank digital currency, when they will control everything people do with the currency, If you dont follow what governments want, they can turn u off, like whats happening in China with their social credit score, if you dont follow the government they cut u off,
Take us back to real money the peoples money, gold and silver, but central bankers and politicians cant control real money, plus central bankers and politicians hate real money as they have to stay within their spending, cant do toilet paper spending,
So more of these con artist will come up on fake media to spread their evil, why a CBCD is great for the people and governments moving forward, lets hope nzers are awake this time, Just remember their last scam, COVID
Yes people do have to know. And the question is, what is value? To which the economist has no answer. Or rather a surfeit of answers. The physiocrats said it was land. Enter John Law into France. Locke said it was labor. So I can spend my day picking up sheep shits and sell them for the cost of my labor. Ol' Adam Smith said said, labor, no, gold, no money, no wool, about as woolly as you can get. Game theorists say competition. Utterly forgetting that there is no competition without coordination.
The answer is will. If people will that the money printed out of thin air has a value of X, then the money printed out of thin air has a value of X. There is no value independent of human fiction and desire.
@@stephenjones8114 It would be too big for most to understand whats going on if you dont learn history,
1) The west has had monetary dominance for over 300-400 years,
2) The west has dominated and invaded the east for their resources over the same period of time.
3) Now, the east is moving away from western currencies using their own and dumping the USD.
4) USA. maybe has 350 million population, then maybe Canada, Australia so on, each country has smaller population.
5) China has over 1 billion, India the same, with other eastern countries they have huge populations combined.
USA presidents have been destroying their dollar for over 20 plus years since coming off the gold standard, its becoming toilet paper, as more countries move away from their dollar, inflation is going to hit USA and western countries real hard,
The banking people are moving all power from the west to the east, bringing in their central bank digital currency to rule over all,
As Henry Kissinger used to say, once u get people to voluntary take trial vaccines we have them in our hands,
And like he says, Control the food you control the people, control the energy, (oil, natural gas) you Control continents, Control the money u control everything and everyone.
@@1meanmaorimean1 Gold and silver are both suppressed in real value due to the derivatives markets. Sovereign countries could also influence the gold/silver supply and therefore the price by taking over mines and controlling supply to the market (DeBeers). What Western governments should be doing while countries will still trade their money is print money to buy Bitcoin(true hard money). ₿
@@sieve1826 hmmm, i like BTC however I hate the block chain, It seems blockrock has built their derivative platforms, so like gold and silver they will control BTC, countries are dumping BTC, USA is buying them, The war in Ukraine seems to be their proxy war, Where they are using Ukraine to print crazy amounts of USD currency send it to Ukraine, then it comes back as some kind of tax benefit, then the money men are buying up all physical assets, BTC, Gold/silver mines, land, countries etc... printing the USD into oblivion it will become like every other fiat currency toilet paper, Then their new digital system will come in when they control 90% of real physical assets, Their digital system its basically in place, So ww111 normally comes when the crazies want their money system in place, This is the 4th monetary change, 1913, 1946, 1971, then ??? all done under world wars, except 1971, thats when USA took the world off the gold standard, Bankers plans centuries ahead when it comes to money, and its not to benefit the people, lol,
@@sieve1826 Thats what seems to be happening with USA proxy wars, Ever since the invasion of the Middle East it started really ramping up, With the endless printing to fund these wars, politicians are sending this currency to what ever country in the way of arms/weapons, food, shelters, selling it as we are here to help lol, again its coming back to the USA in tax benefits, They are then taking that rubbish paper and buying all the BTC, Gold/silver mines, land etc...before moving everyone into digital, When digital fully comes in, You wont need banks, Governments can control all without them, That government can be anywhere, just depends who wins the war, To the banking people, politician's bosses they wouldnt care which country has that power, They will be at the top of what ever country wins ww111, as normal they will direct them puppets (politicians) for the next 100 plus years,
Fascinating. NZ govt is not a household budgeting exercise. It's the leading driver and healthcare, transport, infrastructure is its business. Politicians live to survive, my guess is the last minister knows these financial principals and the latest minster couldn't conceive this is real.
It’s already happening in nz I believe with that level of debt
Inflation has been an issue for 40 years, not just since the pandemic. Property has gone from 5x min wage to 15-20x min wage. This guy is just another boomer whos profited from that time so sees no issue. Tell this to young kiwis that have left to Aus because inflation has ruined the ability for a good life here on a standard job. Fiat currency has never worked in history.
Promoting government to spend more is dangerous. That means the taxpayers money is been spent and whatever they want to spent, the politicians pony project etc, will always come back to us, taxpayers. If government spend more will council needs to spend more? It all goes on in a circle.
No. Taxes are never spent. MMT explains that.
@4:00 no, not exactly true! MMT reveals monetary systems like NZ's does *_not_* even have a nominal inflation constraint. We can have any nominal inflation rate we care to have. The real constraint is the political psychology --- people psychologically do not like seeing prices rise even when their wage is rising faster and production is adequate. So even though they are better off, they'll vote you out of office if the nominal price level goes up too fast for their taste, but the latter is not an economic problem, it's a political psychology problem. What matters is the real wage (how much your whole income can purchase) not what $1 can purchase.
Having stated that, the NZ gov is the monopoly currency issuer in NZD (together with state charted banks who issue credit) as Prof Hail says, so the government is the price setter, not price taker, so they can control the inflation rate. The reason why we want moderate inflation is so the lowest wage can continually rise, via a full employment policy, preferably using a Job Guarantee buffer system, rather than via obscene regressive Treasury bond instruments (aka. _basic income but _*_only for people who already have money_*_ and in proportion to how much money they already have_ ).
Prediodically increasing the base JG wage floor keeps inflation healthy and incentivizes more spending, less saving, (savings get eroded by inflation, which is progressive policy. Savers are demand leakages, forcing governments to run large deficits, so antithetical to capitalism, capitalism runs on sales, not on savings).
US govt has run deficits ever since bill clinton, similar to what this fella is proposing. Now US govt debt repayments r over 11% of gdp n rising. Printing more money wont help. Lets see where this goes to compare against this theory.
Clinton ran surpluses. History.
There are different ways of printing money. The US chose to repay bonds early which put cash onto banks balance sheets in place of liabilities. They could have printed money & spent it on roads, railways, IT backbones, health & education to increase productivity, but for idealogical reasons(the free market😱) did not
Rob Muldoon, he built plenty of infrastructure and didn't worry about debt. A true MMT Visionary.
He borrowed in foreign currencies, which he couldn't print to repay. And we had our dollar pegged.
Wonder why he didn't borrow in Nzd, currency debasement ?
@@lowtech_1 Our exchange rate was fixed at the time (pegged to something else), not floating as it currently is. Today, NZ's exchange rate is floating and we have no government debt denominated in other currencies. Thus, unlike the latter cases, there is no external limit -a limit beyond what the NZ government can actively chose to impose - to the reserve bank honouring its liabilities denominated in its own units of account. Yes there are inflation and devaluation constraints.
interesting conversation
The Government get enough in taxes so we don't have to live in a broken country!
But all the money is in the bank accounts of the uber-wealthy, and we won’t tax the rich. Until we tax the rich our country will only get more broken.
Taxes are deleted and not spent.
Much of those taxes goes to unproductive spending - NZ Super and Health spending - that does nothing to fix what’s ’broken’.
@@Detached_Contemplation
Taxes are deleted and never spent.
We have either the lowest, or the second lowest tax rates in the OECD, depending on how you measure it.
Ask him why the increase in money supply since 2000 (has doubled and then doubled again) just so happens to match the increase in house prices over the same term (has doubled and then doubled again) yet is not responsible for inflation?
It has increased house prices, because all the cash was given to banks. Abd banks always lend on domestic property first as it is lowest risk. If that money had been spent on productive infrastructure we would be in a different position. Just ask Norway.
@@deerfootnz Well I am not complaining but this seems like a far better idea. Japan is another example of a country that has poured public $ into infrastructure and in many places are over built. I lived on a man made island less than 6km² and it had better bridges and access than Auckland to North Shore!!!
Whatabout in the Weimar Republic and their printing of the German Mark? Did that lead to insolvency and total societal chaos? Yes.
As well as Zimbabwe & Argentina
The Weimar Republic had to pay high repatriation amounts to the WW1 victors hence the high inflation.
@@chrismckellar9350 How does sending money abroad cause inflation?
All sovereign countries print already.
@@bobtuiliga8691sending money abroad means buying foreign currency Kiwi currency. If there is excessive selling of kiwi currency then that will devalue it (supply and demand) so overseas goods will cost more and there will also need to be excessive printing of kiwi dollars to pay for foreign goods. That is inflation.
❤
That how every empire fails. Prints unlimited money. Fools theory.
MMT does not advocate for printing excessively. It does not actually advocate for anything. It is a description of how economies actually work, not how politicians and bullshit economists advocate and set narratives for it.
Why is the presenter saying "niet effiet" instead of "net effect", what is wrong with him
Send this guy to Zimbabwe
Yeah Zimbabwe had to pay reparations to their white farmers in real(dollar) terms for seizing their farms which totally destroyed their currency. This is isn't exactly translatable to New Zealand...
@@Perdition84Zim was repaying debt denominated in foreign currencies
They try to run it like a corporate
Until the lender of last resort is required. the corporate Air New Zealand. The corporate Kiwi-Rail.
Comparing to other OECD countries tgan run deficit is such a false logic.
All because other countries like PJapan, UK, US are gradually going broke, doesnt mean NZ ought to follow.
That was Robbos false logic that got us in this position
There's something quite disturbing about this guy.
The logical conclusion to these arguments is endless inflation and printing more money to combat rising prices and then printing more money to combat rising prices and then printing more money to combat rising prices and then printing more money to combat rising prices and then printing more money to combat rising prices...
That is not at all the logical conclusion. You haven't understood anything.
If you use your ears you’ll realise that’s not what he said at all
How did this work out for Zimbabwe or 1920s Germany?
Both of those countries had massive debt denominated in foreign currencies. Very different. This is also the trap that Muldoon fell into
These MMT people are cranks.
Yup. When reality doesn't fit your world view you create alternate 'facts'.
No you are just ignorant.
Does anyone actually watch this crap?
Given that you obviously have no knowledge nor interest in economics, and that MMT is an explanation of how economics actually works, you probably should just scroll quietly on, so you don't advertise your ignorance.
@@DavidTangye😁😅😂🤣😭
The more you print the worse it get just ask labour
All money is printed. That's where it comes from.
Correct. Excessive printing devalues what is already in circulation. That's inflation, and is why a dollar buys a tiny fraction of what it could in the past. Excessive printing = high inflation.
@@DavidTangyeNo. Inflation is caused by a mismatch between demand and supply. Printing money MAY cause that, but does not if the economy is running at below capacity.
And the last Labour government printed no money. Firstly the Reserve Bank are independent, and secondly the economy was at capacity.
The govt might not become techically insolvent because they can print currency, but guest is being dishonest if he thinks printing excess currency wont devalue currency: it will become worthless
Nz govt does have to find NZD before spending it; its called tax
No. Wrong. Money is created when the govt spend it. And it's destroyed by taxation.
Why is Q&A entertaining such dangerous far left theories.
This is sure to cause hyperinflation by continually debasing the currecy.
Ask Zimbabwe
The left and right are two cheeks of the same arse, interesting how you came to the conclusion its left wing politics though ...🤔
Zimbabwe got into trouble by borrowing in US$. A very different case.
Steven Hail is just pointing out the system we have now without the budget carry on.
In Australia back in 2013 there was meant to be a debt and deficit disaster …. Fool lots of people.
Now people look stupid but conveniently look the other way.
Funny how humans don’t just learn what they don’t know about the monetary system ???
i wonder how the country would be if we didnt export to import the same product like timber , coal , meat and fruit n veg. i got some leg ham the other day made from pork from the usa and spain . how much "pollution" does that shit cause ? how is that cheaper ? and why do we have to sell the best to import crap that doesnt compare ? if nz issues the currency then why do we need to do this crap ? the reality is our prime cuts of meat sell cheaper overseas than the substandard shit they sell us really bizzare in my opinion.
no you can't just print money
Can . Only thing is use money when needed and use efficiently
OK. Tell me where it comes from then?
Actually, money has been minted for thousands of years, paper notes for hundreds, and unbacked fiat digitally since 1973.
@@billwilson1320 same way as money is coming from at the moment. Actually the money mechanics is clearly mentioned by MMT and is accepted by bankers as well. Refer to whitepapers from BOI and RBNZ.
Money as we know are liabilities or IOU by govts and by private banks. If there is a need and the resources are available govt can always find it using IOU.
Same way as NZ banks create money to buy houses.
And more money creation makes inflation which has happened to house prices.
@@jomigregory7253 I know. I was replying to the first poster.
The interviewer doesn’t adequately pull this guy up on a very fringe economic theory which is now discredited elsewhere in the world
Tell that to the FED who keep printing money year after year. Or to Russia, who no matter the sanctions imposed keep trucking along. So too, Turkiye.
Please don't expect anything of worth in this comment section, you're welcome.
Aye, if only we were able to have more intelligent public conversations as a national community.
@@fleurosea But then we might be able to have nice things, and it seems like we're not ready for either of those things...
If government's don't need to worry about deficits, (because they can apparently just print new dollars without consequences) then they have no reason to be taking taxes. Free lunches all round. Let's see how that works out
@@hoiho1000 it’s not what he said. If you want to see who create money with no consequences then look to credit money creation by banks, fuelling useless property speculation. They pretend they are intermediaries but credit money creation is responsible for growth in todays money supply.
It's nowhere near what was proposed. Money creation always has to be with regard to inflation. Inflation is caused by a resource shortage. That might be labour, natural resources or capital. Printing money can only be done if there is no shortage of actual resources.
I'm not sure if I laugh at the amount of bs or cry because people take MMT seriously.
Yes I do.
You have obviously not studied MMT, or if you have you don't have the capacity to understand economics.
@@DavidTangye Well versed in it thanks. I understand economics very well .Cheers.
@@DavidTangyeand at least I can write coherent sentences.
@@deerfootnz minor voice to text slip, now fixed
100%
Debt and borrowing should be viewed against what it’s for and with long term vision.
Consider the starting case where there is no money. The reserve bank prints $10 and expects $0.1 interest. Somehow the $10 borrowed, the only money in existence, has to pay back $10.01 to quit the debt and the interest. This is the logical impossibility you are suggesting. Money borrowed, plus interest, can never be paid back out of money borrowed.
@@stephenjones8114 The Reserve Bank pays interest on reserves.
😂😂😂😂 what a load of bull crap
Its not the deficit that matters necessarily. Its how the deficit is funded that counts. This economist needs to go and understand accounting because he seems not well informed in that respect.
Do you understand the National accounts?
@@HenriettaP significantly better than you I suspect
And accountants need to go and understand math. Any trade can be profit, loss or break even. Accountant's fetish for profit ignores that many exchanges are loss. The police cannot fund their operations by user pay for example. MMT acknowledges this basic fact that accountants like to pretend does not obtain.
@@stephenjones8114 I think you’re living in the past. The fetish for what was called output pricing was a fantasy of the Public Finance Act 1989. It was abandoned stealthily 15 or 20 years ago because it didn’t work. Accountants are employed in not for profit organisations the government being only one of many. As it happens I worked on the project which proved the PFA wouldn’t work. Go and find Allen Schick’s report from circa 1997. It’s discussed in there. The point I was making is that the MMT theorists engage in a dangerous idea. Look at the US. Its debt is 7 times greater than its entire annual revenues. It does have to be repaid but it will not be achieved by quantitative easing. I prepared an accounting model which demonstrates why. I can give you a copy if you like.
The problem witth guests like this, is that if NZ did MMT and economy imploded, the instigator wouldnt be held responsible for the consequences.
What you mean like the rampant and irrational policies set in play by Labour 1984. If only Roger Douglas and co could be held responsible for the lunacy that has seen NZ youth suicide fall from second lowest in the OECD to the lowest. While Douglas proudly exclaims that he killed only 13 farmers by removing farm subsidies and throwing those individuals into that turmoil, not to mention trashing the wool industry.
Japan interest rates have been zero or negative for years. Th closest enterprises to Japanese Yen creation borrowed at marginal interest levels and invested into other global markets paying far greater yields (profit). When Japan recently increased its interest rate, borrowers of Japanese Yen shorting the system were placed under pressure forcing a sell of in the markets. Steven Hail should not generalize when he knows better. He is more of a weasel than a parasite.
Zzzzzzz
Borrowing is monetary policy not fiscal
Hail was referencing Japanese interest rates being lifted. What happened. If you don't know about the "carry trade" and its risks, you should look into.Zzzzzzzzzzzzzz
@@stephenlaurence8650 zzzzz Japan doesn’t borrow to fund spending.
US inflation reduction act increased spending and therefore inflation
Well Spoken.
He is got to be Joking. If the government keeps printing money, The confidence in the NZ Dollar would plummet making it essentially worthless.
That is not what he is proposing
Did you not listen to what he said?
never listen to people who look like demons
Steven Hail is correct.
Randall Wray backs this up as to why govts that issue their own currency sell bonds.
th-cam.com/video/pex89N9Oqog/w-d-xo.htmlsi=o1uqbXnbFvbEhSTH
This has been totally discredited. I cannot believe you would still broadcast this misinformation
This is what the government wants you to think. But tell- if it was a viable solution- why haven't we done it ages ago?... why is our infrastructure not maintained or expanded on a need based system of priority?...
@@myresponsesarelimited7895because it's in someone's best interests...
Stephanie kelton myth of gvt debt
What a loony. Let’s just print more money and we can grow the economy. These economists are weird and think this hasn’t been thought of before …
What a loony. If more money is printed then obviously the economy has grown. It now has more money. That is the definition of growth.
He doesn't even sound confident.
MSTR
Tax doesnt destroy dollars, high interest rates do.
Tax provides income for govt
Tax does indeed destroy dollars, in as much as it removes dollars from circulation. The MMT way of describing this, and conversely it's opposite counterpart, is as spending by first printing new money. The net effect is the same, in that what is important is the deficit or surplus, and where the money is spent.
@@DavidTangye no tax redistributes dollars from private sector to public sector.
High interest rates destroy currency, thats why they lifed OCR to tame inflation
@DavidTangye Tax is revenue for govt to spend, its on the Treasury website
@@andrewking9435 I agree, tax can be considered revenue, as it saves them from printing new dollars, ie, the more tax coming back in the less new dollars needs to be printed.
@@andrewking9435 how does tax redistribute dollars from private sector to public sector? Tax comes into central government. Whether they spend it on public sector or private sector is irrelevant?