to be fair that was before mike got into mmt i think but mmt was predicting this in 1996 people like l randall wray, bill mitchell and warren mosler also said this long before 2008 schiff is a gold standard person who the financial system like so they have him on
I respect Warren Mosler in this debate for his candor about how the current system works. He admits, that the whole system is based on compulsion, monopoly, violence and political control. He admits that this is how it is and I'm just explaining how the game works.
That's how stupid the MMT economics is when it promotes more compulsion and monopolistic power over people by politicians. It claims to be theory but the tests applied to it show the failures that render it is based on false asumptions. He is not honest when challenged about his theory where it is shown to be faulted so badly that it is in tatters.
Would you rather live in a system where a collective entity has a monopoly on violence but is bound by constitutional law and democracy? Or a system where violence is decentralized and anyone can attack anyone at any time with no fear of state authority?
@@Rob-fx2dw you are coping hard dude. MMT has been doing nothing but racking up wins and the detractors other than myself have nothing in the way of a real argument to offer.
@@steviewonder417 The whole of MMT is a myth that appeals to wishful thinking people who are incapable of doing a hard analysis of facts or even initially determining fact from fiction. It is full of contradiction within it's own narrative. e.g. taxes are unnecessary then taxes reduce inflation, then taxes put value into money.
Murphy is more extreme and emotional than Mosler, & it comes off as disrespectful when he compares Warren to criminals. He blames warren for the system but Mosler is like the rest of us, trying to find solutions in modern life. Murphy is whining about how the system should be but never gives any solutions.
kjnkjnbkjbjn jhbjknnhbkjnjkh he mentions policies? Austrian policy was made on sound money. Fiat is hot potato, spending the $ wisely is better than saving money for a government.
@@seanmcconnell2345 I know I am a year late. Whining you say without any solutions. Be fair. He did say the solutions were to have the govt out of the banking system, stop the artificial control of interest rate and give currency back to the people (stop the monopoly of govt fiat money). So take your pick. Or maybe you just wanted to condescend him? If so then bravo you did it, hope you felt good ;) Edit: You have to distinguish being offensive from being disrespectful. Offensive statements can be posed respectfully. He was saying that the proposal was as absurd as someone robbing for those reasons. He may have come off as offensive but it is a bit of a stretch to say disrespectful. I may say Steph is the best player ever, it might be offensive to LeBron fans but not disrespectful.
At about an hour and thirty minutes into the debate - Mosler suggests that if people were really upset at unemployment, and not okay with relative low inflation - than there would be protests against the Fed. But how many people outside the small percent of the population that can grasp economics and how complicated the whole system of MMT really is - would know enough to march against the Fed? Those that partook in the "Occupy Wall Street" movement did not really understand that their real gripe was against the Fed, and not Wall Street. But it takes some real thought exercise to reach that conclusion when everything around you looks bleak.
Precisely. Who wrote and passed the laws that allowed 30 to 1 leverage, and the housing bubble (AHA and the implicit US taxpayer backstop for Fannie/Freddie)? The parasites in Washington. IQ2: Blame Washington More Than Wall Street For The Financial Crisis-Intelligence Squared U.S.
The vast majority of people don't even know that they down own CASH in their bank accounts, they only own a bank liablity. They'll only wake up in bank runs or large inflation. A low inflation rate keeps everyone calm - like a boiling frog.
WallStreet pays no taxes and is parasitical to the productive economy(www.counterpunch.org/2015/09/01/how-wall-street-parasites-have-devoured-their-hosts-your-retirement-plan-and-the-u-s-economy/), also we need to use the FED to finance a recovery - www.twsp.us
Yeah this is just a really bad explanation of what the "Occupy Wall Street" movement was about. Many of those people knew that just about everything the people on wall street did was legal. Whether or not the government should have made those financial games illegal, the "Occupy Wall Street" movement was furious with "Wall Street" actors who "gambled" irresponsibly with what they saw as their savings and their homes and their livelihoods. The "Occupy Wall Street" movement felt that "Wall Street" had a moral responsibility to keep their money "safe," and acted immorally. Many of them were dumbfounded that those financial practices weren't illegal, because they were under the assumption that government institutions like the FED and FDIC protected them from that kind of behavior, and many of them were rightly angry at the government for not regulating it, but their true complaint was with the way their fellow citizens gambled with their financial stability in such a callous manner.
+PoliticoSTK 88 Perhaps, but I could tell immediately that he didn't like the sophomoric argument about robbing liquor stores - which is the same old government-as-household fallacy of composition that Keynes referred to. The argument doesn't work and despite the aversion to guns-and-jails, there simply isn't another way to govern us unless you like having a Mad Max world of predatory gangs where "only the strong survive" - but not for long as they too grow older and weaker.
+sensey07 There are tons of untried ways to govern people. It's highly unlikely that none of them are better, given that most of the world is modeled after the US, the first attempt at a workable system. It is just hard to try new things when it comes to innovating states or public services.
I found that comment (about Murphy being condescending) accurate and it's a fallacy to say that whoever points that out must be a good person, he is stating his perception and that has nothing to do with the way he has acted in the past. And I can bring at least 3 situations where Murphy was very condescending in his comments towards Mosler's views. Regarding Robert Brothers comment, it shows how US-centrism works, to say that the US was the first attempt of a workable system is to completely disregard History, what are you even talking about? Did you forget the Roman Empire, the one that promoted the Republic? What about Greece and Democracy? What about the thriving civilizations during the Bronze Age? Because they didn't have cars or planes they were not in a "workable" system? What about the British, China, Japan ... and any freaking other civilization that existed before America was even found?
As a hard-core Austrian, I think this debate was FANTASTIC. I also think Austrians need to address MMT better than they have so far - AND I think this is one of the best conversations I've seen between the two schools. Thanks!
Bob is pretty weak here. All he need to stress the flaw of MMT is that in Molster's example of Subway coins. Well Subway can issue as many coins as they want, but they have to have product when the customers who bought those coins wanna exchange coins for their product. As for the government, they can issue as many fiat currency as they want, but when the holders of those fiat currency eventually spending those fiat currency, it will lead to inflation because the government only create fiat currency but they didn't produce any product or service back into the economy while in Subway case, they not only sell the coins but they also product the sandwich for when those coins are claimed. That's the flaw with MMT. Bob should've explained this better!
Mosler actually did address inflation. the BOJ, FED and ECB have spent trillions buying assets and inflation's been stagnant and there's been no effect in the real economy. they could've instead implemented Mosler's policies which target employment and lift burden out of the poorest shoulders in our societies.
That guy who was the first to comment I have seen before. The guys who runs the economics blog. I'm pretty sure he was a wallstreet econ. commentator pre-2008 housing market crash, and he was scoffing at an Austrian economist who was claiming that their was an impending crisis-- literally laughed in his face about it. Then, well, obviously, that guy got his foot stuck in his own mouth. Kind of funny the "condescending" tone he supposedly finds in R. Murphy's arguments- guy hasn't quite recovered since his misunderstanding.
@@AnarchyEnsues "jewish economics" That's funny considering he's catholic and people call Hans Hoppe a nazi. Nice try though. "Jewish economics" doesn't sound racist at all...
@bobdole57 dude, its the root of Austrian economics/anarcho capitalism. Its an economic/political system moulded around idealism fantasy idea of removing the state. A philosophy designed to waste your time with intellectual excerices while people implementing their economic/political agenda take everything for themselves . Once you realise that hebrew capitalism is enforcing tyranny on the people via their ownership of the media and controlling a super majority of all political campaign money, things like never ending war in the middle east make more sense.
Prior to the Keynesian Revolution, inflation was defined as an increase of the money supply. Rising prices were seen as a function of the increased supply of money. People who define inflation as simply rising prices skirt the issue. In your list of three reasons why prices can rise, you never even address monetary issues. The idea you can track and measure a general price level is hubristic at best. The economy is dynamic, prices move in different directions at the same time.
But still nobody thinks about the total money supply when setting their prices. Only when there is increased demand prices will change. You might argue that in the long run the quantity theory is right, but as for example 2008 has shown singular markets can have that kind of inflation. The housing prices skyrocketed, but for example food didn’t get pricy that fast. In an idealised market the quantity theory would probably be right, but in reality there is just not enough speed in the money circulation
@@doncorleole2356 given enough time, excess money would distribute throughout the economy. 2008 proves that money can be printed and channeled into an asset class, but the excess money is neutralized if consumers can't exchange their equity for purchasing power. 2023 proves that the quantity of money theory is correct in regard to stimulus money.
@@digitaldough8972 lmao no it doesn't show it was correct. We kicked the van down the road and have had to continually repump money into the system. It doesn't show we can print endlessly and rack up debt without fear because we control the printer (mmt in a nut shell). The effects are short term gain long term loss, we are seeing the effects now in 2023. Our only hope is that the US dollar stays the international currency standard.
MMT economists don't believe that we can "print money endlessly" and rack up debt forever without negative consequences. The part they don't say out loud and explicitly (because it's not going to be popular) is that taxes have to increased somewhere to balance things out. Who will be most affected by this? Those who hold most of the money aka the wealthiest among us. I've only just started listening to this debate so if Mosler contradicts this I'll revise my opinion, but it's pretty clear that this is implied in Stephanie Kelton's book The Deficit Myth.
@@filmjazz to my understanding its not to 'balance out' all the spending, but that at a certain point spending pushes the country over production capacity with excess demand, and taxes serve as a mechanism to pull back that excess demand
8:40 "Give 40% of the campaign funding raised to the opposition..." So, all of them or just the candidates deemed VIABLE by some nonprofit, for profit, or govt? Would it be split 5+ ways for a district (rep, dem, lib, socialist, green, or other parties) election? Would it be done for primaries, funding the same party candidates (20+) as well as the opposition candidates (also 20+)?
i can't see how this is a debate at all. bob has ideas about the way the economy should be "there should be no central bank", and warren has no particular opinion but just says "we currently do have a central bank". those two statement don't contradict each other.
what is frustrating too is that Murphy's angle absolves him of needing to try to propose solutions, policy or practical...every time he was asked about policy suggestions or suggestions for solutions, he shuffled around the question
@Frederick Shull you miss my point entirely. if he doesn't have answers to the problems he insists are present, why are we listening to what he has to say. At least I can believe that Mossler believes he had an idea of how things work, and what to do from there. What does Murphy have to offer? Merely beliefs (and nothing more really) about individual actions (or how he thinks individuals should act) that neither inform his ability to provide a solution or apparently even the beginnings of working towards one.
@@Joshvs3 He believes that the government should absolve itself of any role in the economy. What he fails to understand is that basic principals such as property ownership rights are the construct of government. My one true wish is that these Austrian school economists could have a chance to live in the world with the laws (or lack thereof) which they espouse. It would be utterly hilarious to witness that but it can never happen so they can spend their days in think tanks talking about how if only their fantasy world could be implemented in the real world all economic problems would be solved.
@Frederick Shull nowhere in moslers philosophy does he advocate central planning, i believe you are misunderstanding what he is saying, he is in fact a capitalist and wants to do away with income tax entirely so that more people can buy goods and more people can produce goods. the govt has to spend money into existence and the only reason that money has value is because the govt demands it back as a tax. mosler only argues that there is no need for the fed to have a positive budget, the fed should be spending money into the economy not taxing it out, he argues that our economy is starved of cash. moslers words not mine "when the U.S. government does what’s called “borrowing money,” all it does is move funds from checking accounts at the Fed[federal reserve accounts] to savings accounts (Treasury securities) at the Fed. In fact, the entire $13[now 22] trillion national debt is nothing more than the economy’s total holdings of savings accounts at the Fed." use the case of ww2, our deficit/ gdp was 20% by the end of the war and there no problems, however a year later when deficit/gdp fell to 7% there was recession, also observe the historically low deficit/gdp in the years 1929(.7%), 1930(.8%), and 1931(.6%) that preceded the great depression. also observe tax hikes in 1936 followed by a decrease of deficit/gdp from 5.1% in '36 to 2.4% in '37 with a return of the depression in '37. his core argument is that when fed deficit becomes too small it is essentially taking money from the economy
I don't think it's true at all that Warren Mosler doesn't have any normative statements in there. But Bob Murphy absolutely doesn't just say that we should get rid of central banking or how the economy "should be". Murphy presents what is generally recognized as the austrian perspective on business cycle theory and uses theory to describe how the economy works, or at least parts of it. @goshjosh If you argue for the abolition of central banking then you can do just that, you don't need to have a replacement. Bob Murphy is against monetary policy altogether, meaning that he is against any monetary authority setting any policy. You wouldn't say that you need to propose an alternative if you argue against concentration camps.
@@herohero-fw1vc - Petter wrong about what would undo the destruction th-cam.com/video/sgRGBNekFIw/w-d-xo.html&t=156 or tinyurl.com/yxxn3bau . . 29 DEC 2007 07:52 - But I [Peter Schiff] think the economy, in general, is going to be a bigger issue. I think, certainly by November [2008], it'll be obvious to just about everybody that we're in a pretty severe recession. . I think a lot of the voters already know that. Some of the people here in Wall Street haven't figured it out yet. . But I think that the recession, the economy in general, will be a much bigger issue. . Unfortunately, I think, you know, it's not tax cuts that we need. . We really need a lot of spending cuts. . The government has to cut spending because if they cut taxes and then just print the difference what we get is inflation instead. . So we have a little bit more money in our paychecks. But we have to pay a lot more for food; we have to pay a lot more for energy; and of course eventually we're going to see a big increase in interest rates as a result of all this inflation. .
@@Terribliz yes, we've known Peter Schiff hasn't known what he is talking about for a long time. Some people just can't wrap their head around believing that the government has access to unlimited cash. It goes against everything they've ever been taught about economics.
- So you see the government is like a cheater? - Yes. - And you don't see anything wrong with that? - No, that's just the system we live in. - OK, so when the government does it, it's not cheating, but any other group does it, it's cheating? - Well, yes they make the rules. - Why is it OK for them to make rules that benefit themselves, at the expense of the citizens? - Because they got the guns, and are not afraid to use them. - And you don't see anything wrong with that? - No, that's just the system we live in.
Diogo V. Kersting you don’t understand the role of sovereignty in society. Imagine a contract between individual priority owners that sets rules for how the properties look so as to collectively raise the aloe of everyone’s property. Is that sovereignty? Is it evil somehow? This isn’t even how the real world works but any Austrian would have to admit it is social contract theory and there’re voluntary and not evil by Austrian standards. Anarchy really is fake and gay.
@@steviewonder417Sovereignty??? Do you think certain individuals have a 'moral' right to aggress (use force, fraud, or extortion) against others? If your answer is 'No', then you are an 'Anarchist' or a 'Voluntaryist' and a 'moral' human being. If your answer is 'Yes', then you are a 'statist thug'! Make the correct choice, please!
I see you Mike Green. Even though you didn’t introduce yourself, I noticed and was glad to spontaneously come across some earlier conversations with you. I wish you were having a three way debate with an Austrian and an MMT economist. Consider it. We’d love to watch.
I’m no expert in economics, but the pandemic, although 99% of its effects were awful, had one good side to it. It taught people a little tiny bit about supply side economics. There have been times where, no matter how much money you had, you could not get everything you wanted or would normally be able to afford. Some things were so limited in supply that it was just unattainable and some supply was just outright nonexistent. All the demand in the world and even free money from the govt didn’t fix this problem.
That’s funny I think the exact opposite happened. The government literally put money in there bank account they bought food payed their bills and that it is a policy choice to keep the rich getting richer and the poor struggling. Not having toilet paper because of a global pandemic that had people panic buying is not a confirmation of supply side economics. Man Reagan really broke people’s brains.
@@Eastbayrob ?...I'm not talking about toilet paper. I'm talking about all sorts of things that were unavailable due to the restrictions: Restaurants, clubs, concerts -- countless products and services. The government could have put $1 million into my bank account and it wouldn't have made Disneyland any more available to me. The park simply was absent from the market.
@@davidr1620 "The park was simply absent from the market" Nice thought. You could also say that millions of workers were absent from the market, and these were all intentional policy choices that our government made! It really is wild to see how real emergencies (like Covid) can so radically shift the political window. Less than a year before Covid, Andrew Yang and his freedom dividend were laughed out of the discussion. As soon as things got really bad in the US, suddenly "fiscal hawks" were signing on to stimulus checks and 600/week in extra unemployment! Although the same crowd hardly shies away from enormous tax breaks. I hope more people can see that the government doesn't "interfere" with the market; it CREATES the market.
you don't know what you're talking about have you ever heard of Merrill Jenkins go look em up on youtube go look up the Coinage Act of 1792 and go look up the coinage act of 1965 and go look up the Federal Reserve Act of 1913 which allowed for fraction of reserve banking which is immoral you're a clown in yourself you don't know what you're talking about
Mosler keeps talking 0 interest rates. Who in the world would ever buy U.S. treasuries if getting a permanent negative real rate of return? Not to mention all the inflation that would cause. All treasuries become debt monetization?
On the issue of deposit insurance, it is clear that increasing the level of coverage to depositors permitted the banks to engage in high risk investment activities. The related issue is whether the FDIC appropriately analyzed the risk and therefore adjusted premiums charged to banks based on asset concentrations.
Robert Murphy really does use a whole lot of Straw-manning to make a negative case of his opponent's point of view, instead of explaining his actual point and path forward. I think his opening statements about losing showed he was fearful and unsure of his ability to argue his points. I understood where Warren Mosler is coming from and the points where he wanted to go.
@CrabApples Bodaciously Bitter Fruit's Kind of funny you think that when Murphy now concedes almost every MMT claim such that he finds MMT to be true but not a moral good or ideal.
Hold up man, it wasn’t just a Nasdaq bubble pop. It was across all indexes. Yes the NASDAQ would’ve contracted more than other indexes “theoretically”, but the initial contraction was a healthy and needed market correction after sustained growth over many years.
Some of the MMT folks saw that there would be a crisis before 2007/8 based on an analysis of the private debt sector growing. Steve Keen called it as did some of my friends.
8:40 "Give 40% of the campaign funding raised to the opposition..." So, all of them or just the candidates deemed VIABLE by some nonprofit, for profit, or govt? Would it be split 5+ ways for a district (rep, dem, lib, socialist, green, or other parties) election? Would it be done for primaries, funding the same party candidates (20+) as well as the opposition candidates (also 20+)?
Mosler misses the point again 1t 34:20 . He says if you borrow $50,000 to buy a car there is not someone else out there who now cannot buy a car because you borrowed $50,000. The issue is there is someone else who cannot buy that car because you have bought it. They have to bid for another car for which there are Not an unlimited amount of cars available for sale. His subway token explanation is totally flawed because the subway token is worthless without the subway and the limited number of rides. Not the amount of dollars or amount of tokens. Tokens are only a away of either restricting the number of seats that are for sale or gaining payment before you actually ride or bypass the need to exchange payments at the time of queuing for ride. It is the limitation on the resources (seats) that is the issue and that limitation is because resources for one facility or one product have to be bid for against the competition for their use elsewhere..
He meant that the $50 000 are not unavailable. The car obviously is, hence them repeating CONSTANTLY FOR IMBECILES LIKE YOU! SPENDING IS LIMITED BY REAL RESOURCES, NOT PEACES OF PAPER!
@@Stewiehleba That reply "He meant that the $50 000 are not unavailable." is doing a dopey and a statement like that puts you into that category. You don't understand what fiat money and credit is. The $50,000 is always available - It's called 'Credit' in the private sector and the interest rate is the adjusting factor. Most money in the economy is fiat credit money. Ther is never a shortage of someone willing to lend on credit provided an interest rate is negotiated.
You think that there is a limit on amount of cars US can produce? US could easily produce and/or import enough cars for every grown individual to have couple of them, get new one every few years, and for those who are well off to be able to collect for luxury or rent (rent a track etc). Constraint is artificial and manufactured in order to control people and create disproportionate distribution of wealth. Ok, CEO managing spaceship company can have enough to have a private jet, multiple residencies, leftover money to invest further or for company's risk management, but shouldn't all workers be able to afford at least single residence, Corolla and something on the side for their own life's risk management? There can't be enough homes and enough cars for every worker? CEOs need to have enough so they can fail in perpetuity without ever being accountable, bribe politicians so they pay large fines with money workers earn, instead of going out of business and to prisons often?
Murphy is arguably right about a fixed exchange rate system. Mosler is right about a floating exchange rate system. We and most other countries live in a floating exchange rate system. Also, there is a fundamental difference in outlook towards "the Gubmint". Murphy & co. think people in government are idiots or worse, and therefore he wants to reduce government policy space as much as possible, e.g. by fixed exchange rates, hard money, etc. Mosler & co. say "hey, fiat money and floating exchange rates give us all this policy space. Think of all the good we can do if we have smart, good policy-makers." The fundamental flaw from Murphy's side is that hard money and fixed exchange rates don't constrain governments and never have. As soon as they become a problem for the upper class, they just get rid of them - which any government can do by fiat. The problem for Mosler's side is finding smart, good policy makers.
22:48 This is not true. If you get a mortgage, and your bank doesn't have that money in savings. You still get your mortgage. The bank (artificially) creates money to do this. The Bank of England wrote a paper about this a while ago, how commercial banks create money.
It's not about that. If you take a mortgage you go into debt, but person who you bought the house from has that money so until he/she spends it technically it counts as savings.
if it is a new house, it will be a profit of the company that sold you the house. Until this company spends it, its their money ready to spend, that's what savings are
Miszcz Funcjonowania PiG Lol Get the fuck out of here! You are clearly missing the point! Haha the company doesn't just let in the house and lets you start paying for it, you have to get a loan, like Onne said they dont loan you anything!!!!
are you stupid or what? the company sold you the house - that's how it makes money. You took a mortgage and went into debt, then moeny fom your mortgage went to the company. there are clearly lots of idiots out there.
Interesting discussion, not really a debate. They should have targeted the differences between their policy recommendations instead of delving into how their systems work. Both are advocating action to be taken, and Mr. Murphy hit it on the head only at the end. MMT may be highly specialized to the system as it is, but it does not follow that the MMT policy recommendations for change are better, only less drastic. Mr. Mosler brought up that the gold standard wasn't as useful to the gov esp in times of war due to its limitations, as if this were a bad thing. Perhaps from the perspective of the gov, but I think you'd be hard pressed to find anyone else who would see a limitation on war making, misallocation, and destruction as a bad thing.
@@Endelite No, and thankfully I don't have to. We already spend far too much on our military as it is, with little or no cost cutting incentives in place, quite the opposite in fact. Our biggest budget busters are entitlements, not national defense. Whether our finances are real or fiat will make little difference to our future adversaries, as it made no difference to our adversaries in the past.
@TheCanMan Can Since 1990 I don't have a problem with that. Nasa hasn't been fit for purpose in decades, and what advances were made through the agency could just as easily have been done under the airforce. The panama canal could just as easily have been a privately funded project if it were really worth it.
@TheCanMan Can Since 1990 "Non of that would happen in the Private sector Come with your delusion" If it isn't worth doing in the private sector it probably isn't worth doing for the gov either. . "Capitalism was suppose to liberate us from feudalism" lol, speaking of delusions, you are confusing economics with government. . "Not eternally enrishine us to those very rent seeking creditors" Then don't go into debt if you don't want to. . "These ass hats make debt instruments " All the more reason to deregulate the market and let the market forces crush them. . "An you 👄 pieces that defend them are equally responsible" As opposed to you who can't even coherently communicate your ideas. YOU are the clown, spouting nonsense in a youtube forum six years after it was started.
"Every country that goes to war, immediately suspends the gold standard." EXACTLY. No fiat currency = much more limited capacity for governments to wage wars. Pretty sure that's a good thing.
+Shawn Cowden its called war financing the central bank buys goverment bonds in order to fucking fund the war if they were in a gold standard in such discipline the central bank wouldnt be able to fund the war it is a necessary thing not a good thing by the way the golden standard was such a failure that all the countries that had it except the us devalued the price of gold in order to over value their own currency in order to have deficit and start goverment projects
Shawn Cowden we are talking about the secoind world war thats when the golden standard ended in one side of the war were the nazis and in the other everyone else so what the heck man
Nixon took us off the gold standard in '71 to reduce fiscal strain caused by the money spent on the Vietnam War.... now they can fight stupid war after stupid war without constraint. If our interventions can even be called "war".
MMT uses Japan as a fine example of no inflation happening. Do they use it as a fine example of no growth happening too? By the way, debt can only be payed or even maintained with growth...
I would argue that having resources that can be used as money would more likely lead to an invasion/liberation (depending on one's POV). Oil is a useful commodity, much more so than gold now. Notice how the us invaded/liberated some countries and not others for the same reasons. And, more recently, notice how Russia is using its oil as a trump card (no pun intended) for Europe in the ukraine war/liberation (yes, I did it there too).
My take-away from this is that the government issues money by spending it into the economy then reclaims it through taxation. Therefore individuals who operarate as government officials operate under a different set of rules than everyone else, who don't have the privilege of spending money into existence and then collect it later through taxes. Does anyone else here not see this as morally problematic? For all the talk about inequality, the real inequality is this big elephant in the room. We have a House Speaker who's been in Congress for 35 years. That's a long time to have the privilege of not having to live within their means and deal with the effects of legislation that everyone else outside the government faces. If we are to continue with this monetary system, we need term limits.
Great debate, but Mosler's use analogies was hiding the facts a bit. The government, he says, can print any amount of train tickets it wants, but he did not address the fact that if it did, each ticket wouldn't buy a ride - there's just not enough trains. Also, he says people work with the aim of paying the tax collector, thus govt money matters, but people don't do it. They work because they want and need the things they can trade for they work. Also, if you added three zeroes to the value of his card, and the tax collector just charged a thousand cards, then the zeroes really would not be significant, contrary to what he said. A great debate, but not so good analogies.
+isacvale This is true if the economy is at full capacity. If the economy has high unemployment, or surplus capacity, then printing money will increase output. What so many don't seem to understand is that debt creates money, and paying off debt destroys money...so, if the private sector is deleveraging debt (destroying money), then increasing the amount of government money that circulates doesn't necessarily increase aggregate money. Also, most misunderstand the connection between bank reserves and deposit growth, they believe that The Fed is increasing the amount of money in aggregate demand, it doesn't. Only Treasury deficit spending can increase aggregate demand directly. The Fed can only prop asset values, which does really affect the real economy. Mosler's sectoral balance approach is accurate in my opinion, but certainly doesn't tell the _whole_ story. =)
+isacvale He never advocates for the government to print enough money so every single person has a ticket. He's advocating for them to print, and circulate enough tickets so that the trains don't have empty seats. In other words the government should spend enough so that there is 100% employment. Austrians say that would be problematic. But under the current configuration of an economy with floating rates and a sovereign currency it would not. The proof is already out there, we have 7 years of data on deficit spending since 2008. You're right that people work because they want and need things. Mosler doesn't argue that. He's saying that people work for USD, as a form of payment. They will not accept payments in gold, peanuts, buttons, pigs, etc. They accept only the USD as payment. They do that because it is the only currency they pay their taxes in. The US government does not accept any other form of currency. That is how the government has a monopoly on the currency.
+isacvale There is no limits on the number of trains that can we can build. When the demand for train rides increases, the train companies will strive to meet that demand. Although the creation of more trains may not be instant, typically there are enough empty seats already available to meet demand until more can be created. Think about a barber shop. If no one is at the barber shop, the barber isn't producing any hair cuts. But if the next day, 50 people show up for hair cuts, the barber will create 50 hair cuts. If even more and more people start demanding hair cuts, the barber will hire more workers so that he can meet demand.
+donnabret On that belief you have left out the critical part of barbers having enough haircuts. The reality is there is nobody who knows how many haircuts are needed or wanted in an economy as her is nobody who knows how many of any particular thing is needed at any one time. That is an over simplification that leaves out the scarcity factor of economics and the realtive price or one service compared with another. It is all to simplistic to say there needs to be more demand created to make more work. It misses the critical fact that shortage is the consistent problem. Not shortage of haircuts but shortages of what is needed to respond to the ever changing needs of people. There are always shortages of some goods. Eventually people by their choices decide what the shortage of goods or services are. They may be particular medical requirements, roads in the right place, vehicles, vegetables or other foods and a host of other goods. the part that the MMT theory leaves out is 'Price.' Price determines how many goods and services of a particular type are to be made and distributed to many places for sale so people can buy them. To say that making more demand will solve a problem is only looking at one side of a problem. Supply is the other which must take into consideration price. Price is determined by people ultimately since they will pay for some things but not pay the price of others depending on many of their own factors. The same over simplistic view applies to tickets on a train. Just issuing tickets to fill a train would be plainly stupid since that leaves out the price factor entirely as well as the competition for resources that is expressed in prices. Would you make more demand for all goods by issuing tickets? What about making more demand for the people who make train brakes or people who fill swimming pools or people who pick vegetables or accountants or drive taxies or for the tens of thousands of goods on a supermarket shelf ? How many would you make and what price would you charge? If not who would do it and what prices would or should they charge?
+Wayne Vernon Again, I don't like analogies because they can be stretched to gruesome ends. But keeping "trains" at full capacity is not attainable nor desirable. First of all, to do it means the product ("train") isn't being paid with value, but with fiat, causing havoc in a system with limited supply of resources (havoc such as inflation, inefficiency and so on). But, more interestingly, the consumption of a good or service, and therefore its scarcity, is a signal to the market to produce more of it. How much of a good is being demanded and how much people are willing to pay for it allows resources to be allocated very efficiently without central planning. Just two more points: people do not accept USD exclusively so they can pay taxes - they do it because USD has historical inertia (it is a feasible system) but mainly because they are forced to (as they are forced to pay their taxes). I can't imagine why such a nonsensical proposition is so widespread. In the existence of better money, we'd all get only as much bad money as we're forced to (preferably zero). Finally, no one can build as many trains as he'd like because of scarcity - and we can't even tell how many trains we need if we keep filling them artificially. If no one wants trains, or haircuts, these business should go bankrupt so resources can be allocated on things people want. It should be obvious, but keeping full employment for barbers and subsidizing haircuts no one wants is a terrible way to run an economy.
I FINALLY understand all of this now. The Austrians want government accountable to the people. The MMT folks acknowledge that a man with a gun makes us do anything he pleases. The Kenesians want to pretend there is not a gun to anyones head. Its all about who's hand the gun is (supposed to be) in.
34:34 Wrong. The person who borrowed his $50,000 to buy the car now has a car, and there is 1 less car in the economy for the saver to purchase. People aren't after dollars; they want what the dollars buy. Wasteful expenditures are wasteful expenditures. One's consumption of scarce economic resources retards the ability of others to consume the same good.
That is both an oversimplification and misrepresentation of the Austrian view. They see neither government nor the market in the way you describe. One of my favorite Rothbard quotes (like him or not, it rings true): 'It is no crime to be ignorant of economics, which is after all a specialized discipline and one that most people consider to be a dismal science, but it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.'
You make very good points. I love how you specifically point out the incorrect statements. And totally didn't just say "it's wrong because it's wrong". You totally could not copy and paste this comment to apply to literally anything. You also could not post this comment unless knew exactly what you are talking about.
@1:53:00 in summary, Murphy is straw man-ing Mosler. Mosler, and no one in the MMT community, has ever said government is not currently self-constrained in budgeting. The whole point of MMT insights is that government can, if it decides, remove those artificial constraints, and nothing bad would happen. The new constraints, according to MMT, are resource constraints and full employment, you cannot have -1% unemployment/ 101% employment, you cannot employ 50,000 trained teachers in classrooms if there are only 49,999 trained teachers. This is why MMT is so vital, it allows legislators to remove currently self-imposed restraints, and impose superior restraints, which for a monopoly issuer of currency are resources constraints, and inflation constraints. MMT is not about no restraints. MMT is not a licence to print money. Those who think so are pathetic and dishonest or have not learned what MMT is all about.
If I work and make $1000 a month and I lose my job. The government comes in and pays me $1000 a month. Why should I go back to work? Am I now counted as employed because I am on the government payroll? What incentives individuals to create and innovate in society? The problem with government spending is that it is inefficient and creates massive waste. I have audited government budget's.. they have a policy which is to spend spend spend otherwise their budget gets cut in the next fiscal year. What is stopping the elite to spend on the elite and leave the serfs behind? I mean all you would need to do is just bump the hand out another few hundred bucks. Where is the study on welfare and perpetual poverty?
The money part of the equation don't matter, that's always infinite for our federal government, the ONLY thing that matters is we have enough real resources available to buy with that money. So all that matters is govt is investing in and strengthening our PRODUCTIVE CAPACITY to ensure the available real resources are available to buy with any future SPENDING
The one thing we know, that government is strictly unable to invest productively. Most all it does, is pay costs for unproductive action. How much income does the road generage? Well, some. How many roads is enough? Well national income is growing by half a dollar for every dollar debt taken. That should give you a clue. So we take a 10^12 USD more debt. That'll help, says the MMT.
Actually there's evidence on both sides of you get beyond ideology. Counter examples: US private healthcare costs far more per capita and delivers worse outcomes per capita than public option healthcare examples such as the healthcare for US veterans, or national systems such as in Australia or Europe. Don't believe me on the worse outcomes then do some research, but if you want a simple way of looking at it the average US citizen's life expectancy has been going down even as the rest of the world including Australia and Europe is rising. Another example of efficiency is the way the CCP has modernized Chinese cities with world class infrastructure. Look at US cities and so many have such rundown infrastructure that citizens in other countries would be horrified.
@@joythought For every wealthy chinese, there's 1000 of their supporters living in the countryside in abject poverty. US healthcare is a scam, because of government bs regulation. US is dropping because of deaths of despair. Suicides, opioids, etc. Paying 1000bucks for 20 bucks of insulin, that is a decade out original patent. Yet somehow the monopoly is upheld, because of evil government regulation. Health outcomes are very fine, when you go to the hospital. You will get treatment. That is not nearly as certain in single payer systems. You will get put on 6 month queue on anything not acute. Acute? Sure, kinda ok. Elderly and in long decline in health? Good luck. Simple way of looking at it? Has completly assbackwards results.
Mosler. "If the gold standard is so great why do governments suspend it when they go to war?" That question implicitly assumes that going to war is a good thing. War is a bad thing, always and everywhere, and the gold standard gets jettisoned because it would constrain war and advantage that/those countries with greater reserves. Period.
A couple of things you have to ask yourselves is why MMT may not be practical for us, since if no answer can be found, it is a sound path to embark on. MMT's core fundamentals derive in part from Keynes' theories, which many would argue were an ideal set of monetary & fiscal policies that could help revive economies that collapsed due to a decrease in aggregate demand. However, Keynes himself argued that his theories where to be applied only under specific circumstances where AD fell and AS (aggregate supply remained constant) in which case the Government should increase their spending and create a fiscal deficit to consume the extra surplus in supply that would remain available in the economy in order to cut the bottom & later on the top from the business cycle. In order to do this, Keynes argued that governments should run a fiscal surplus during the boom years, reducing the monetary supply in the economy that had been introduced during the bust period. This is of course a huge oversimplification of his theories, however, few economists outside of the classical schools of economic thought found much issue in these recommendations, for which they were implemented by governments all over the world. The issue of course was that economic assumes that people are rational, at least to some extent, and that politicians want the best for their country, but as we all know, it is not from the goodness of the butcher's heart that we get meat to eat for dinner, it is due to their own self-interest. This meant that nations all over the world took Keynes idea's and kept only the part that was politically profitable, at the end of the day, who cared about the business cycle when elections creeped up in the corner, right? This has led nations all over the world to create huge fiscal deficits that they will never pay off. This has created different consequences for different nations since each situation is different. For those that borrowed in other country's currencies, the risk of default grew exponentially, causing many economical collapse along the years. For others, welfare states where implemented with the best of intentions to ensure that the people found themselves better off regardless of their faith, & slowly but surely these nation's cultures and motivations to continue innovating, continue growing (in terms of REAL GDP) and continue prioritizing their liberties over their paper money has subsided. Now, where could MMT fail in the US? Let me start off by being clear, I am not sure whether it would work or not work, I am not sure whether it is desireable or not desireable, frankly, each individual's morality & ideology will lead them to a different conclusion, but I am sure that it is essential to question any theory or economical current that one seeks to adopt BEFORE doing so. Firstly, for MMT to work the Federal Reserve would need to be politically independent in order to act in response to the levels of inflation and not to the demands of a president or congress seeking re-election. We know that on paper they indeed find themselves in this position, however, just a quick look at present times and at what has been historically done to Keynes' ideas can tell you that this is largely an idealistic utopian belief. Secondly, The Federal reserve would need to have real time, exactly precise data on what the current monetary supply IN CIRCULATION is, the actual rate of price inflation in EACH AND EVERY INDUSTRY AND REGION since bubbles can form in all asset classes as well as all cities in the country, and one number reflecting all states and cities would not accurately do justice to the real situation on the ground. It would also have to find a way to inject or retrieve money from certain sectors of the economy and certain regions of the country without necessarily impacting all others, which would prove excruciatingly difficult in this era of special interests. Thirdly, the individuals at the federal reserve would not only have to have even more power than they currently do, they should be expected to exercise this power absolutely perfectly, making all the right decisions at the exact right time with no margin of error whatsoever. Fourthly, the currency value of the currency in foreign exchange markets would be expected to be analysed and controlled heavily to ensure that the country's exports remain competitive in the global outlook to ensure that more productive, supply generating companies and jobs are not lost as a result of government intervention, which would be considerably difficult since our currency follows the laws of supply and demand similarly to all other goods and services. Even more points: Unelected officials will be given the remote control to our economy not only with the ability to create money like they currently do, but with the ability to decide or directly guide the taxation imposed upon the population regardless of the will of the people, since imposing taxes is vital in MMT's regulation of Inflation. - In the event of that a given good's supply is reduced substantially, say Cars, the Fed would have to ensure that none of the money being introduced in the economy be directed towards the purchase of cars, since doing so would inherently become inflationary quite rapidly, for which they would have to greatly reduce the freedom independent adults have on what they want to do with the product of their work, going far beyond what we now consider the role of a government that believes in democracy and the will of the people. - In the event that a mistake is made and inflation arises, taxation will have to be increased to levels much higher than what we currently consider reasonable, which will decrease motivation of production in the private sector thereby reducing aggregate supply of goods and reducing the amounts of goods available in the economy for money to purchase, creating more unemployment and either worsening inflation if people are subsequently employed by the job guarantee that MMT's superstars prescribe only to bid up the prices of these goods which are collapsing in supply, or creating mass suffering amongst people who have no job, have no money, have high demand for money since their tax obligations are high and are forced to see prices rise around them. Many more things can be said about the theory but I've gotten quite tired as is. Again, I do not claim that these points are inherently valid or that MMTers cannot provide me an answer for them, as a matter of fact, that is exactly what I hope will happen as the reason I post this comment is to get some insight as to how you would combat these issues if MMT were to be implemented. Personally I find many elements of MMT really insightful and extremely useful, whereas I struggle to grasp other elements of the theory like any other theory out there. Apart from the Job Guarrantee, I attempted to leave out policy prescriptions since they are for the most part absolutely appalling from my point of view, and it serves no purpose discussing them until we have reached a consensus on how MMT would actually work. Whoever you are, & I plan to comment this on multiple videos to get more insight, I highly encourage to write your thoughts and comments on what I have just laid out, as well as any concern or alternative you have for the theory, please keep comments civil so we can learn and grow together, thank you!
You are the type of person that this world needs now more than ever. Thank you for this comment. Some of the stuff in this comment is stuff I never even considered and ot impacted my view of MMT significantly.
Lysander Spooner besides being my great great something or other was a member of the first socialist international, alongside Marx. He was also against wage labor entirely. Not quite the Rothbard before Rothbard he is remembered as by libertarians.
The austrian guy is never able to try to say something is not true in what Mosler says. MMT is not about what should be, but mainly about "how things actually happen". Quite hard to contradict.
damn, how didnt bob murphy at @1:06:40 say something in the lines of "so you want few private bankers to a money monopoly through the fed".. Im surprise he didnt say anything else there
After continuing to listen to this debate, I'm shocked to realize that Warren Mosler hasn't the faintest idea of what money is. On more than one occasion, he refers to the central bank as a "score keeper" and that money is just a way to keep score. This view is utter nonsense. First of all, even if it were true, Mosler assumes that the score keepers are "playing fair" and not picking the winners and losers in the "game". More importantly, however, is to understand that money, at its core, is a form of technology that facilitates the exchange of real goods and services. When I do my job and get paid, the money I receive is a claim to goods and services in the economy. When government (or a counterfeiter) creates money out of thin air, it does so having produced nothing of value in return. This newly-created "money" finds it's way to the wealthiest and most politically-connected individuals and special interests, who benefit before prices adjust to the inflated supply of money.
You're thinking of money as some moral issue of real value. It's just a trusted IOU with the trust coming from legal force of the government. The real value comes from people doing things to get it.
jazeboy69 There is both a moral and economic component to unbacked fiat currency - both of which are harmful. We can see this when we think about a counterfeiter printing paper notes in his basement. We intuitively understand why this practice is morally wrong, and it's not because it is illegal. If I print money in my basement, I am creating claims to goods and services without having produced anything of value in return. When I spend counterfeit money, I am telling a lie - I am telling the recipient "I did something to earn this and now I'm exchanging that 'stored' value with you." From an economic perspective, my ability to print unlimited notes and spend them as I see fit will result in distortions in the market toward shorter-term consumer goods, and away from savings and investment. The skew in spending caused by my counterfeit spending spree will distort price signals in the economy, leading to a less-than-optimal allocation of resources if this practice is continued over time. Now, when we pass laws to allow counterfeiting on a mass scale, does this solve either the moral or economic problems with counterfeiting? of course it doesn't.
+gergenheimer again I hear you but why a shiny yellow metal and not red or grey? Gold isn't related to morality unless you think a god gave us just enough of a certain element to support our money supply. Can you at least tell me why gold? Why not titanium or platinum much better elements IMO.
jazeboy69 My point is that "legal" and "moral" are not the same thing. Just because something is technically legal does not mean that it is morally justifiable or economically beneficial. An example of this were the fugitive slave laws. These laws required American citizens to return escaped slaves to their owners. The entire state of Wisconsin stood its ground and said "we will not enforce the fugitive slave laws, because we know slavery is wrong." Would anyone today say that the citizens of Wisconsin were being immoral because they defied this law? Part of the problem is that I think you are applying a strictly legalistic standard to the word "counterfeiting". To you, counterfeiting is someone creating money who doesn't have the legally-granted authority to do so. The more accurate and relevant definition of counterfeiting is any time force or fraud is used to game the monetary system in your favor. This is precisely what governments do when they grant themselves the right to print money, while keeping it illegal for you and I to do the same. This gives politicians and bureaucrats the incredible power to distribute newly-created money to their friends, family and the powerful and well-connected, at the long-term expense of the rest of us.
Dimitri - Exactly - and Mosler did not answer it but tried to go on some rant about restricting the supply which he says caused someone to miss out. Not so in the real world since there is not a fixed amount of money needed for every thing that is sold which is reflected in the adjustments that we see as changing prices of goods or services. When money is short and demand falls so do prices adjust to a lower level and that is the adjusting mechanism that results in jobs for all if there is not interference by legislation that demands prices stay too high or too low or quotas on the production or purchase of goods. Mosler ignores the price factor which destroys the credibility of his argument.
The answer is pretty simple. The contract remains the same. If you want to factor price levels or other factors into your contract, there's nothing to stop you doing that. This is already done with inflation indexed bonds.
I totally agree! This is the best question! But I think we all know the answer: the purpose of the new money supply is to put extra into their and their friends pockets(change the distribution), disguised as to save the market😂
Correct. Mosler doesn't address the question which cuts to the heart of the debate. The current monetary system is merely a mechanism of control. Mosler, and all MMTers, believe in the legitimacy of redistribution by governments while hard money advocates believe in meritocracy. The Mosler Murphy debate is really a debate about Marxism/Socialism vs Libertarianism.
I like how the moderator pointed out that the similarity between the two approaches is that they are narrative. I've studied both separately, and never realized that aspect as something they had in common.
In Dr. Murphy's closing remarks he talks about how both models are looking to change the system from the way it currently operates, which is true, but I think there is a major difference between tweeking the system and completely upending the system. Just shifting to a fixed currency from a fiat currency, as would be required under the Austrian model, would have MASSIVE impacts on your society and would take decades to reach an equilibrium. Dr. Mosler's proposals would take a few tweeks that would take a couple election cycles, but it would not have that period of intense market correction.
38:15 If a steel monopolist sets price, the own rate is zero. There it is. Government doesn't have a monopoly on currency. It only monopolizes its currency. You can hold gold, euros, or bitcoin as currency, just as you can build with Bethlehem steel, or Japanese steel, or aluminum. And on tax day, you can convert your gold to dollars and please the taxman and pay him with his dollars while standing on your head and singing the national anthem, if that is what he wants.
Unfortunately Dr. Murphy really didnt bring up important Austrian concepts or do a very good job defending it with the Austrain logic. For example when Mosler was talking about 0% rates, Murphy should have said, "creditors wont lend precious capital for 0% return. The risk differs between each debtor and creditor and interest rates are a price for that risk compensation" etc.
Macro Lux over 90% of money is created by banks they are also monopoly suppliers. it is the APPLICATION OF INTEREST to moeny creation that is the problem.
Adem what precious capital ? the central bank (government) and the commericial banks cost to create money is 0. they have enslaved us all by charging interest to our debt obligations that does not exist. When you takeout a mortgage to buy a house for say 100,000 the bank gives the seller the 100,000 and you have to pay the bank 100,000 plus interest. the banks only created 100,000 in new money so where are you supposed to get the interest from ?? the interest was never added to the money supply so it is impossible for all the debts to be paid off. thats whywe have to have Inflation (new loans/money) or else the interest destroys the money supply.
gpain616 Capital is finite to investors as no dollar can be in the two investments simultaneously. You are thinking about today's money supply that the fed allows banks to borrow freshly printed money from the Fed at 0% (0% funds rate). Traditionally how were loans lent out? Supply and demand of the banks funds. For the bank to lend money it needs depositors. The interest pays interest to the depositors and also a small profit for the bank. But there is going to be a problem, similar as Japan, that you cant print youth. By lowering rates to 0 they are subsidizing the young and reckless and indebted by hurting the prudent and savers and capitalists. We will get to a point where the largest births in US history, the baby boomers, will be retired. And at 0% interest and CPI (lets use the governments numbers for sake of simplicity) of 2.5%, not only will they drain through their savings without interest to compensate their retirement but they will lose their savings even faster due to inflation.
Adem Tumerkan capital is infinite. banks creat money through fractional reserve banking. they make a loan of which and i gave you an example, they Create the PRINCIPLE into the money supply. but they charge interest on it. the money to pay the interest does NOT exist. its usury. do u not see the flaw here ? banks can grow and have grown the money supply exponetialy. also look at private debt in the usa almost 200% ... WHAT SAVINGS ?? their is none. all the interest payments owed from past loans are eating all the new money created. its a debt trap , a snake eating itself. you can not have an economy with Interest/ USURY as its monetary system.
We will go to jail (a gun to our heads) if you don't pay your taxes, right now. So it is that Austrians want to change a monopoly FIAT monetary system while Mosler wants to use the current system to make different policy decisions on how its distributed. Austrians need a constitutional change while MMT only needs Congress to change spending budgets.
The constitution restricts the government from emitting bills of credit, instead they may only coin money. Please explain how you got that exactly mixed up. That is exactly why they created the FED as 'independent', because the US government could not emit bills of credit. The FED US Treasury arrangement is a technical work around of the constitution.
Interest rates aren't solely tied to currency exchange rates. I think Mosler is ignoring how interest rates affect all capital allocation decisions not just what currencies FX traders are going trade. Controlling interest rates works no better than wage and price controls. It causes a Misallocation of capital, Malinvestment and many many other unintended consequences.
Can someone explain to me what is meant by fixed and floating exchange rate and why , according to MMT, the interest rate should be 0 in a floating exchange rate system ?
How much euro is 1 dollar? Im a fixed exchange rate sys this is fixed by let’s say US gov. So the fed has to do eveything to keep the fixed exchange rate. This limits the fiscal space of the gov, and adds burden on fed without that much of benefit. It is suggested the interest rate zero because higher interrst rate might cause higher inflation, in comtrast to the conventional wisdom, also suc rate is basically free money for the rich, UBI of the rich, and at the end lower interest rate might help economy growth (this is conventional).
Mosler offered the gold standard as an example of fixed exchange. Its essential difference to floating exchange is that it represents a hard limit on policy; without this hard limit, the interest rate tends to zero under a floating exchange because of political rent-seeking, but because it's technically legal and regulated, it's all good.
Mosler blurred the definitions, implying that an attempt by the government (or perhaps anyone) to control (change) an exchange rate, amounts to a 'fixed' exchange rate system.
Murphy: we should just have no government at all Mosler: we should get rid of the PAYGO rule and focus on good automatic stabilizers Murphy: See?!?? We’re both just as radical!!
Well he literally didn’t make that claim at all but ok. Easiest thing in the world to do is mis characterize someone’s argument and then debate your own mis characterization
I love the 9mm analogy. Makes a lot of sense that the only way to make gov fiat valuable is by threat of violence. Aside from that the card isn't the currency. It becomes the asset, like a concert ticket.
He says that austrian economics isn't libertarian politics packaged as economic theory, but he does repeat libertarian talking points like 'govt is violence'. Yes, I agree, but I thought that was inelegant.
Yes gov is a monopoly on violence. When you have a people’s gov however that means nothing more than the people are in control. It’s funny to me libertarians think that this is evil yet they think they are sovereign and have a monopoly on violence where it concerns their property lol. Quit being a child. Violence is ontologically true.
@@steviewonder417 so hard to deal with this level of ignorance. The analogy was simply a good one & I never mentioned libertarians. This is about macro economics & the austrian school. The analogy is about the specie of currency & how only a fool would want to hold fiat as their capital. So the threat of violence becomes necessary. Sound money prevents the need for violence pertaining to the monetary system.
@@freemarketeer7093 you need fiat you numpty because of said monopoly. What’s crazy is you think we need less tax CREDITS (currency) and more unemployed even when you know fiat is only scarce because the monopolist needs you to provision the government through our collective labor. Why do you want to retain the false edifice of that scarcity imposed on us being a real scarcity?
@@freemarketeer7093 money or no money. Fixed exchange or floating violence is and will always be. Libertarians are idiots who have no clue about anthropology or history and that the record shows violence even war was prior to the advent of money especially a monopoly on it. Read Graeber and get a clue dude you are lost.
One Austrian economist who has developed a comprehensive theory of economic cycles (which is different from a "financial" or "business" cycle) is Fred Foldvary, at San Jose State University. He accurately forecasted the 2007 crash of U.S. property markets and how this resulted in a financial meltdown. What Fred Foldvary has factored in is the operate of land markets and land speculation as a fundamental driver in the cycle. He does not make the mistake of calling the crash a "housing" bubble. Land prices climbed at rates not sustainable given the decline in household incomes and household savings. Add to the problem the pattern of deregulation that resulted in explosion of the subprime mortgage lending loaded down with outright fraud and predatory lending, and the private label mortgage-backed securities this market generated finally blew up and caused investors to abandon the conventional MBS market as well. The financial implosion was on.
@@wallycheung Fred did hold many of the same views as did Henry George. I do not think he thought of himself as a "Georgist." At best he might have accepted the term "Neo-Georgist". Unfortunately, Fred died in June of 2021 following a fall at his home.
in a sense a riskless interest rate should be zero. Govt doesn't need to borrow from the private sector if it can borrow directly from the Fed by means of an accounting entry. Problem is then there is no constraint on money creation. The creation of a govt bond actually acts as a brake, being a declaration the money is a loan and should be repaid.
I think the MMT guys miss something. Governments are *great* at misallocating capital. We can see with Greece and Puerto Rico, where their debt was *cheap* that they were not able to spend it in ways that properly allocated capital. The advantage of fixed rates is that economics then becomes about trade and production; and governments weren't able to outcompete those against whom they had a trade advantage (cheap debt for funding investments). As well, they create demand through taxation of dollars. The 'at the point of a gun' analogy then rises to the fore. You know what works really well for creating demand for debts? Enforcing it as legal tender. Only enforce contracts denominated with dollars as (at least) one component. VISA is perfectly allowed to take my lump of gold to pay my bill. But I *MUST* give them at least the dollars we agreed to. So, I will want to go get dollars.
"It's not easy for a central bank to create inflation, they've been pumping out 85 billion a month in QE!" I wonder what he'd say in 2020 when they will print untold trillions over the next couple of months and about half of Americans are shut inside not producing anything.
There has been plenty of inflation since the 08 collapse but it has been in the non functional economy. The stock market and real estate as an example.
@@magusyilie You're absolutely right. People think if we have inflation we must see things rise uniformly in all asset classes, but that's not true. Prices of TV's can go down while prices of cars or gasoline goes up. Real estate is a mainstay reflecting inflation, because as credit goes up, RE is a main receptacle for such credit expansion. Prices frequently drop so much on used cars because credit terms are less available than for new cars.
It is what the monetary world calls immunized money. It is coming from private sector savings that is to say bonds, via reverse repo at zero percent interest which means zero market risk.
I’ll summarize here from what I can gather from each side: 1. MMT: Short-run non-neutrality of money; Long-run non-neutrality of money. 2. Mainstream: Short run non-neutrality of money; Long-run neutrality of money. 3. Austrian: Short-run non-neutrality of money; Long-run non-neutrality of money. ‼️On the surface, it seems like MMT and Austrians agree on money’s effects on the economy, but I will argue in short that both of them mean different things when they claim that money is not neutral in the long run. ‼️Austrians coming back to the point about money’s effect on real variables, it seems that while the mainstream and Austrians differ on the long-run effects of increases in the money supply, they both agree that the kind of pecuniary benefits MMTers support with an increase in deficits through total debt monetization is not viable. I found it extremely telling, and very amusing, to see this comment from someone in the debate who supports the Federal Reserve’s monetary policy in response to an MMTer: I dont know what else to call “printing money makes us richer”. What’s a better label? This point can be related to Austrian capital theory, which has somewhat influenced the debate, but not to the extent I think is appropriate. That same commenter made several related points about one of the overlooked faults of modern monetary theory. That is, there are constraints on the policies which MMTers are attempting to put forth in academia. These constraints are related to real factors: There are a finite amount of real resources that can be used to invest in projects or spend in consumption. This could mean money in a traditional savings and loan bank, a bond mutual fund, a pension fund, etc. If you think that there are not real resources being moved around in capital markets then you reject basically all economics at a fundamental level. If you do not think that real resources are moved around in the market this implies that financial markets have an infinite amount of resources to go around to fund any project we want. This is not the case. Someone else made a similar point: There is a real resource constraint - if you use real resources to build a factory, those are resources not available to make chocolate cake. If all output is consumed, there’s nothing left over to use for investment. At full employment, this constraint binds, and is what determines real interest rates. Everyone agrees on this point. For the mainstream, the benchmark model is the real model that would hold at full employment. Keynesian effects enter through the deviations from this model. For MMTers, the benchmark model is a nominal model, where actual quantities of money are sitting around in different places in the model, and the government can act on those quantities. That’s why the discussion of “loanable funds” is so confusing. The mainstream is thinking about the real constraint, while MMTers are thinking about the nominal balances. I agree with their points completely, especially when one of them ironically uses the phrase many Austrians wield against these very individuals, “if you think otherwise then you think markets are able to create goods out of thin air.” However, I don’t think their arguments go far enough, particularly when it’s stated, “Of course, in recessions when we have underutilized resources, there is less if any competition between the private sector and government. But we’re not always in a recession.” To add to their stance, it is important to remember some of the most important points of capital theory. First, capital is heterogenous and multi-specific. This means not just any pieces of capital or labor can “fit” together, they must be complimentary to one another in a given production process. Each factor of production has an opportunity cost, especially the less specific it is. Many factors have several uses, making it more versatile in production and it’s demand more elastic. If a given production method is found to be unprofitable, then the capital used can be reallocated to another industry or sector which needs it. But this comes with a cost, when capital is reallocated, it must often be changed, restructured, or formatted to adjust in a new factory or firm. There are therefore transaction and transportation costs involved when resources are allocated to new places by changes in monetary policy. This is what Austrians mean when they say money is a “loose joint” in the system. When there is malinvestment, resources are wasted because they are often very specific and cannot be inserted into another production process, making it idle. The MMT position completely ignores this. Second, interest rates influence the value and supply of capital. If interest rates rise (fall), then the price of capital tends to fall (rise), but this process can be reversed if the interest rates don’t reflect the time preferences of individuals. This is a point that MMTers miss, and is related to Austrian business cycle theory. Labor is also affected by these policies since it must be complimentary to capital used in specific processes that are affected by them. Otherwise, workers must be retrained to be properly absorbed back into the labor market in accordance with a given capital structure that changes when prices, interest rates, or government spending and taxation change. And with MMT, there would be high rates of volatility in these variables.
Yellow/Blue _Austrian Watchman how exactly does MMT not account for inefficiencies? Isn’t that what prices are for? Of governments set the prices through their spending why don’t they just shop around?
F Bordewijk you should put in a little more effort, some of us are trying to figure things out and all the insults from the MMTers isn’t winning anyone over. I’d like to know where he is wrong.
@@soulfuzz368 Basic MMT is not that hard. It's a matter of logic for the most part. Mosler's simple maxim that government levies a tax liability then puts its currency out to be acquired to pay the tax, thus creating the monetary economy of that particular unit of account, hasn't been undermined by any of the people who keep coming forward to dispute it.
1:13:26 It was the government, with the Federal Reserve Act and other interventions, that further centralize financial institutions by permiting and compelling wall street to pile on leveraged positions with no risk of failure (too big to fail)
@@zygi22 - You misunderstood some basics. Very difficult for our ancestors to change their understanding from Ptolemy's earth-centered model of the real world to Copernicus's sun-centered model or the real world. This understanding of a model of political economy which actually includes the tool of money is just as unbelievable. GIMMS_Training_May_13_2019 tinyurl.com/tyn32g4 . . Steve Keen Speaks at Minsky 100th tinyurl.com/s6n7f7w . . Keep studying. . Your world will turn upside down either, easily as for me, in the time it took for one sip of coffee, or it will be a very, very difficult paradigm shift. . Get out your MONOPOLY board game and ask someone to join you in starting a game who is an accountant or who has completed a college Introduction to Generally Accepted Accounting Principles. . Start your game of MONOPOLY using "T" Accounts . You can call the notes in the rubber band the supply at "the Bureau of printing" . Then record on the "T" accounts your moving of the notes from the Bureau of printing to the Central Bank Take note of the Debit (RED) and Credit (BLACK) . Then record on the "T" account your moving of money from the Central Bank to each Player . Then look at all that money in player-circulation and take note of where it came from. . Then add a rule to the game: Balanced Central Bank Rule : When all players have passed go, then collect all the money from the players in order to balance the statement of the central bank. . Take note of the money safely balanced in the central bank and the poverty of each player who lacks all money.
Looking at this old thread, and the one-liners under +stefaobc's post, and after reading a hell of a lot, it's clear MMT is a misnomer, it is not a theory. Whoever came up with that name should be shot. MMT is a description of how the financial/banking system and fiat currency works. It is not up for debate. It would be like debating whether double entry book-keeping can truly keep track of credit and debit. What can be debated is policy. And that's where the Austrian school is as poor as Neoclassical and Keynsian economics, mainly because the policy derived from those philosophies is based on belief --- although each separate aspect of these old schools can be critiqued separately and some hold up while others are pure ideology. If you read Mosler's "Seven Deadly Innocent Frauds of Economic Policy" you will see some sensible policy based on MMT. Contrast Mosler with another Austrian school advocate like Walter Block, who is a complete joke, theorising all in a fantasy world of libertarian assumptions that can never be true in the real world. That's why philosophies are good: they allow theorising in a fabricated toy world, which is useful, but also why they are often fantasy.
The term "Modern Monetary Theory" was derived from a joke. Some journalist invented it from Wray's book Understanding Modern Money (1998). But Wray meant "modern money" as an inside joke from A Treatise on Money (1930), where Keynes says that the "modern" form of money as a nominal unit of account had been around for the past 3000 years since Babylon.
@Tim Wallis. "Redistribution of wealth" is NOT what governments are "supposed to do." Not even close. Socialist govts do that. Govts with mixed markets do that. It is not what govts are "supposed to do."
Enjoyed this a good bit. My fundamental problem with MMT is the same as Jacob (Yacob? sp?)'s raised at 1:21:50 , although I would say it a little more simply -- the printing of money (and similar operations) is a tax. And the response from Mr. MMT that it's super necessary in order to not have too few units is feeling a little anemic right now -- who would bend down to pick up a penny? I know I can't be bothered. We do not have a problem with divisibility that requires more money printing. Also, there are a ton of people in the "top comments" here that do not know how to use the reply button cause they're clearly replying to people. It makes me lose a little faith in youtube's ability to sort top comments.
You wrote that 3 months ago, do you still have that same problem with MMT or is it sorted? Kudos to you for having enough of an open mind though to watch a debate on this. BTW how on earth can currency exist if it cannot be created? How do you know what the right amount is? I also don't understand exactly why you believe that a bit more or less currency in an economy, means that Businesses Owners or a Rent Seekers will therefore decide to raise or lower their own prices (the definition of Inflation & Deflation), and get away with it, bc of a lack of competition. Now sure, why risk it at large levels? But MMT economists don't advocate that either. To me, that seems to be a fear of the unknown or new or of freedom or what could be an exiting future where the economy serves society, instead of the Idolatry of the Society serving the Economy as a living God. Yet it isn't so unknown, Japan already tried it after the 90's, and Mainstream economic predictions turned out totally wrong, like usual. Also, note that MMT economists advocate that the money supply be taken into consideration, rather than the Elite-Serving myth that "MMT means making a near infinite money supply".
@@pebblepod30 no, it didn't but thanks for the reply a couple thoughts here -- "I also don't understand exactly why you believe that a bit more or less currency in an economy, means that Businesses Owners or a Rent Seekers will therefore decide to raise or lower their own prices (the definition of Inflation & Deflation), and get away with it, bc of a lack of competition." because theres the same number of goods and services being chased by more dollars "How do you know what the right amount is? " not worth picking up a penny right now. weve got enough "Also, note that MMT economists advocate that the money supply be taken into consideration, rather than the Elite-Serving myth that "MMT means making a near infinite money supply". " i can imagine. i'm more concerned with what the US govt is actually doing and the effect it has on me
The printing of money is only a tax if it causes the value of your money to decrease faster than a desirable rate of inflation (2-3%). And it certainly doesn’t always do this. If there is “slack” in the economy (unused resources, labor, capital goods) then spending into the economy will increase production using those resources. When there are significant supply constraints (see the recent pandemic with lockdowns and supply chain issues) then spending money into the economy will raise prices but not production.
@@camerondye6108 i'd be interested in the money supply data, i do wonder what % of the money supply is actually being created annually, looking at all forms of creation. unfortunately, i don't have the economic knowledge to vet such data. but i wouldn't say a small amount of printing is "not a tax" because it has desirable qualities. it's still a tax, you are instead making the argument its preventing deflation or some such, and it's *worth* it being a tax because it prevents other economic disaster. ok, mebe, in extreme moderation is my inclination to say. and while i think the austrian response to the "slack" point would be to call it binging for a short-term fix at the expense of longterm trust in capital, the critique i would rather personally make is to say: MMT theories were used (probably inappropriately, i grant) to justify spending alongside lockdowns when supply constraints were obvious. maybe the adherents should do a better job preventing politicians from twisting their theories. tradingeconomics.com/commodity/eggs-us its hard to look at this graph and the reality of the "lockdown and spend" policies and have any faith in government or MMT, although you will probably say (and with some truth, i'm sure) that that is projection/the central banks and the adjacent lockdown policies don't directly relate. but however intertwined, an austrian economic view would not have been so callous in the printing or the locking down. i'm sorry -- this response prolly broadens rather than narrows the discussion and as i said you may have some legitimate claim that it does so unfairly. thank you in any case for the reply, it is interesting to see the MMT perspective and i can see why those claims are correct/reasonable, at least in some interpretation/scale.
@@nathanparker8555 No, the point is that if money printing is offset with increased productivity and isn’t causing significant inflation, it’s not a tax in any way shape or form because it’s not negatively affecting the value of your money.
There is no debate with fanatics. MMTs views on the origin of money are enough to disqualify it from the discipline of economics alone. It's a mistake to debate as though two ideas are equal
I don't follow Warren's business card analogy. @1:48:36 "im taxing you guys 25 cards and im only letting you earn 20" Government doesn't impose more taxation than the aggregate income of the people, do they?
ScottyNapaa - Only in Mosler's mind does the tax exceed the income. But it's only a sample of what is totally wrong with MMT. What is unbelieveable is that more people don't see it as totally wrong.
Of course it happens. This is when the public sector is in surplus, and the private sector in deficit. It happens in austerity policies. You should look at it at sectoral level, over time, not personal.
Agreed with many of Moslers points - but there's not a theory of economics in here. People who think Mosler is 'right' are responding to tit for tat policy issues. If you think Murphy is wrong - you don't understand what he's saying or why. A 2 dimensional object travelling around an orange can't understand why it ends up back where it's started. All the best peeps
The Austrian mistake is in using a price clearing analogy to fix a bust. When prices & wages fall, debt-to-income ratios spike and debts become more difficult - if not impossible - to repay, as these are priced in nominal terms regardless of any changing real conditions. Professor Steve Keen shows how even if you have a gold standard, allowing a private banking system to create deposit money via loan creation almost always generates asset bubbles followed by a Great Depression/Financial Crisis event. Banks lend for the purchase of assets, while Keen has shown that asset prices rise as borrowing accelerates, so we end up with more and more borrowing as people try to chase gains in that market. (In other words, private, deposit-taking banks - not governments - spark and sustain asset bubbles via their lending practices, and by taking advantage of people's desire to benefit from a perceived price trend that the banks' own lending created.) Private bank lending creates deposit money that enters into the real economy, creating extra demand in the economy until, soon enough, the serviceable debt limit is approached. Then borrowing slows down, asset prices fall and this causes net repayment - and reduction - of money, rather than borrowing and net money creation. Reducing the money supply drags down incomes, employment, and wages, & as Keynes noted decades ago - & Keen demonstrates so clearly with his models - one of the stable equilibrium of banking-based capitalism is zero income, zero employment, zero profit, and the banks end up owning everything. Debt-deflation, depression, & unemployment emerge out of a positive feedback loop that is created whenever the private bank-created money system moves into net repayment, regardless of whether gold is the reserve currency or dollars are. Eliminating private banks & bank-originated deposits entirely is the only way to produce a pure commodity money, if that is the goal.
Adrian The federal reserve sets and manipulates the interest rates though. If a bank is too overzealous with lending it becomes insolvent, so its self regulating. If anything, giving one authority the power to manipulate interest rates always leads to malinvestments which is what happened in 2008
The critical part you're missing from this is the federal reserve enables this aggressive fractional reserve banking as when the banks are caught in a tough position of not having the available funds when people come asking for their money, the fed bails them out to prevent a bank run. The very fact they can fall back on this allows them to be exceptionally risky with lending. If that weren't the case, banks would have to be far more careful with lending, if they were to utilize fractional reserve strategies at all. So you're right that yes the banks initiate it with their lending, but you're not mentioning how the fed enables this practice.
1:16:13 "every country that goes into a war immediately suspends the gold standard. Now why would you do that if it was so good for the economy? Cause it's not." Exactly the opposite: when a ruler of a country goes into war, he doesn't want the economy to work. A properly working economy would make it much harder for the ruler to waste resources on a war. A warring ruler needs the economy to stop working and instead he needs to be able to siphon resources from the economy for his warring effort. A working economy would try to defend itself from that. All the allegedly "horrible" consequences of the gold standard were only horrible for the rulers who wished to abuse the economy and uneconomically waste resources on projects the economy didn't wish for. The gold standard was an excellent protection from such wasteful squandering.
Oh, I like this thought. A ruler in war time needs the economy to be productive, but he needs to shut off the fair redistribution of earnings. I may take this idea. Going off the gold standard frees the government to invest as much as it wants in military activity from just printing IOUs. Then, after the war, they couldn't reestablish the gold standard, because the people were in poverty and needed a bailout. At least this fits with what I know so far.
@@warrendriscoll350 well he primarily needs to shut off the economizing which is the main function of the economy: determining where the scarce resources are needed most urgently and allocating them accordingly. He needs to override this process and instead allocate the resources for his own purposes. Unfair earning (and savings, and property) redistribution is only a side effect of this.
@@warrendriscoll350 except War is a non-productive- losing venture. You basically pay to destroy and to pay, you have to steal from the future to afford it. Thus, Gold - handcuffs for criminals - are taken off so politicians can plunder.
@@rsixx6548 It needs to be productive in order to create things to throw in the garbage heap of the battlefield. Like tanks and aircraft. Otherwise you lose. The system sees no benefit from this production but it is production.
this is like living in the middle ages and saying "could you please give me an example of a state that didnt wield the power of the church?" or on the eve of abolition saying: "could you please show me one nation that ever did away with slavery?" or in 1919 saying "could you please show me the society where women were treated equally to men in the public sphere?" just because there is mass irrationality doesn't mean the current ideology is correct or desirable.
Very interesting debate. At 1:02:06, I was surprised that Murphy even asked that question, because even I, someone who just started looking into the MMT stuff, knew that only the currency issuer could issue the money, not any Joe or company! Their debate reminds me of the current partisanism in our government. Each insist on their way of doing things is the correct way, but each can be a difference of night and day. As counter-intuitive as the MMT seems, I am not yet written it off. I wish the debate could be geared towards identifying a specific situation and ask each school to provide their view/cause and fix/prediction, under 7 min, with 2 min of rebuttal from the other side. Examples of situation: 1) Greek debt crisis of 2007. 2) Zimbabwe hyperinflation 3) Current 1.9 Trillion Government spending on infrastructure That way, it cuts to the chase and then explain the philosophy behind. It's just a much better way for people to absorb.
From an MMT perspective, that is correct. HOWEVER it is only correct for the Government, not for anyone else, individuals or firms. The Government can (and does) credit money to bank accounts, and thus inject money into the economy. Is it that difficult to understand?
@@landcruiserfan4206 It depends what you mean by wealth and your opinion on the ability of government and the private sector to create it respectively. I think most people think of wealth directly as or as a proxy for, roughly, "number and/or priority of ends achieved/achievable" (money is valued for what it can buy, not wholly for its own sake.) Simply creating money just allows the receiver(s) to move this type of wealth to themselves at the expense of others; it can only create this wealth if it's invested in increasing the number and/or priority of achievable ends. The question is, "Are there investments that, when made by government, produce real (inflation adjusted insofar as it's new money being invested) wealth and which would not have been pursued (or which would have been pursued less efficiently) by the private sector?" I think the answer, as a rule, is no; entrepreneurs operating in a price and profit/loss system are better at spotting and exploiting these opportunities than government bureaucrats. An Austrian approach can still allow new (bank) money to pursue investments beyond savings if we allow free banking (no reserve requirements, immediate closure upon failure to redeem.) It's just that if any one bank creates too much too quickly, more of its notes will end up with the other banks than vice versa and it will lose reserves, risking closure.
1:11:25 the issue with the Austrian school is that they say: “I would do nothing”. And people want politicians to do something, even if that doing could be the root of many problems and the next one.
Mosler - hands down. The more I'm hearing about MMT, the more sense it makes. It demystifies a lot of what's going on. And - a big plus - it uses real world events illustratively rather than ridiculous thought experiments, where independent agents 'freely enter into labor contracts', rather than people working to keep from starving. It says look, we're no longer on a gold standard, so let's stop pretending we are.
I m working to keep myself and others from starving, why am I not a free agent ? I decided to work here. Yes we are no longer on a gold standard but why shouldn't we?
@@transon6655 The answer to your first question is in the question: 'I decided to work here... to keep myself and others from starving' So, rent your labor to someone else or starve? Where's the 'free' choice? The person who wakes up each day and chooses to work because they want to, rather than because they have to - or starve. That's the free agent. Wealthy people make that choice each and every day. “It is the impossibility of living by any other means that compels our farm labourers to till the soil whose fruits they will not eat... These men, it is said, have no master - they have one, and the most terrible, the most imperious of masters, that is need. It is this that reduces them to the most cruel dependence” -- Simon Linguet, 1767 The 'Gold Standard' limits a sovereign govt's ability to spend. This is how you wind up with a mountain of work needing to be done; a mountain of people who want to work; with a mountain of natural resources, yet nothing happens. Why? Because - under a Gold Standard - our gold reserves artificially limit the amount we can spend. That's insane. We need new infrastructure. We have plenty of unemployed labor and natural resources, but we can't put it all together because, 'How we gonna pay for it?' That's an insane situation and a BS question. We have a 'printing press' or rather computers at Treasury. We just pay for the goddamn thing. Yesterday $1,200 was added to my account. How did it get there? Did the govt have to break open a piggy bank to get some gold bars? No. Someone at Treasury - by order of Congress - pushed a button and voila, $1,200 was added to my (and millions of others) bank balance. No Gold Standard in sight. No one saying 'you can't do this because your gold reserves are too low' This is how the real world operates. When Congress decides to pay for something, they just 'do the damn thing' [period]. The rest is BS.
jones1351 I have a lot of choices starve is just one of them. A lot of entrepreneur give me a lot of other choices ( Jobs) or I can even opene my own buisness. Or i can even isolate myself and live by myself in the jungle if i hate peoples as much as you do. Yes, I never said they can't spend. The problem I see is when they spend they will automaticaly reduce private spending. Increase in money supply is basicly a tax on savings in dollars. And you could argue that government spending is better than private spending, BUT let look at our real world. When we had Obama as president then republicans didn't want him to spend their money and when Trump in Office Democrats don't want him to spend their money. So now you will always have 50% of people who disagree with the way government spend their money. So the way I see is, it is best to just let private people spend for themself so we can reflect 100% how the people want to spend their money.
@@transon6655 One: ‘I have a lot of choices A lot of entrepreneur give me a lot of other choices ( Jobs)’ “It is want that compels them to go down on their knees to the rich man in order to get from him permission to enrich him” - Linguet Or Two: ‘or I can even opene my own buisness.’ Data from the Bureau of Labor Statistics shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. Or Three: I can go live in the woods? Nah. Or Four: I can starve. Still not seeing a whole lot of freedom of choice. ‘The problem I see is when they spend they will automaticaly reduce private spending.’ And… well remind me, how much private spending on infrastructure is the govt crowding out? How many private investors are building roads, bridges, schools, hospitals, or power grids that get us off fossil fuels, etc.? 70% + of Americans want govt to spend the money on Medicare for All, and education et al., instead of expensive and illegal wars. Yet both Reps and Dems in congress ignore the people and spend it on wars anyway. Even though M4A is a hell of a lot cheaper and will do much better than bombing poor people into oblivion and jacking up the list of folks who’ll hate us. So, govt spending isn't the problem. It's what they're spending it on. But, more important, the fact that they ignore the people when making those decisions. Worst of all is, none of these clowns rode into DC on tanks. We put them there,and then let them get away with ignoring us. But, back to the point, freedom. No. We are not free, informed and engaged citizens of functioning democracy. We're more like obedient subjects of a plutocracy, managed by a corrupt, and entrenched two party political system - who get to pull the lever every 2 years for candidates the plutocrats offer us as 'choices'.
Before this I was somewhat a fan of the Austrian school and Bob Murphy. After this I've got to reevaluate, Murphy not a strong debater.. too slow to make his points
Mike Norman is now complaining about disrespect when he laughed at Peter Schiff when he forecasted the financial crisis back in 2007.
Haha true although the MMT people did predict it though.
Schiff predicts a crash every week
That's Modern Moron Theory for you
@@danhworth100 every 10 months
to be fair that was before mike got into mmt i think but mmt was predicting this in 1996 people like l randall wray, bill mitchell and warren mosler also said this long before 2008 schiff is a gold standard person who the financial system like so they have him on
I respect Warren Mosler in this debate for his candor about how the current system works. He admits, that the whole system is based on compulsion, monopoly, violence and political control. He admits that this is how it is and I'm just explaining how the game works.
That's how stupid the MMT economics is when it promotes more compulsion and monopolistic power over people by politicians.
It claims to be theory but the tests applied to it show the failures that render it is based on false asumptions. He is not honest when challenged about his theory where it is shown to be faulted so badly that it is in tatters.
Would you rather live in a system where a collective entity has a monopoly on violence but is bound by constitutional law and democracy? Or a system where violence is decentralized and anyone can attack anyone at any time with no fear of state authority?
@@camerondye6108 I prefer a dictatorship of the proletariat
@@Rob-fx2dw you are coping hard dude. MMT has been doing nothing but racking up wins and the detractors other than myself have nothing in the way of a real argument to offer.
@@steviewonder417 The whole of MMT is a myth that appeals to wishful thinking people who are incapable of doing a hard analysis of facts or even initially determining fact from fiction. It is full of contradiction within it's own narrative. e.g. taxes are unnecessary then taxes reduce inflation, then taxes put value into money.
The only disrespect I saw was from the guy who claimed he saw disrespect.
Murphy is more extreme and emotional than Mosler, & it comes off as disrespectful when he compares Warren to criminals. He blames warren for the system but Mosler is like the rest of us, trying to find solutions in modern life. Murphy is whining about how the system should be but never gives any solutions.
@@seanmcconnell2345 What do you want a strategy guide? Implement his policies, that's the solution.
kjnkjnbkjbjn jhbjknnhbkjnjkh he mentions policies? Austrian policy was made on sound money. Fiat is hot potato, spending the $ wisely is better than saving money for a government.
@@senorshorty16 Right, I was talking about Murphy.
@@seanmcconnell2345 I know I am a year late. Whining you say without any solutions. Be fair. He did say the solutions were to have the govt out of the banking system, stop the artificial control of interest rate and give currency back to the people (stop the monopoly of govt fiat money). So take your pick. Or maybe you just wanted to condescend him? If so then bravo you did it, hope you felt good ;)
Edit: You have to distinguish being offensive from being disrespectful. Offensive statements can be posed respectfully. He was saying that the proposal was as absurd as someone robbing for those reasons. He may have come off as offensive but it is a bit of a stretch to say disrespectful. I may say Steph is the best player ever, it might be offensive to LeBron fans but not disrespectful.
At about an hour and thirty minutes into the debate - Mosler suggests that if people were really upset at unemployment, and not okay with relative low inflation - than there would be protests against the Fed. But how many people outside the small percent of the population that can grasp economics and how complicated the whole system of MMT really is - would know enough to march against the Fed? Those that partook in the "Occupy Wall Street" movement did not really understand that their real gripe was against the Fed, and not Wall Street. But it takes some real thought exercise to reach that conclusion when everything around you looks bleak.
I totally agree with you.
Precisely. Who wrote and passed the laws that allowed 30 to 1 leverage, and the housing bubble (AHA and the implicit US taxpayer backstop for Fannie/Freddie)? The parasites in Washington. IQ2: Blame Washington More Than Wall Street For The Financial Crisis-Intelligence Squared U.S.
The vast majority of people don't even know that they down own CASH in their bank accounts, they only own a bank liablity.
They'll only wake up in bank runs or large inflation. A low inflation rate keeps everyone calm - like a boiling frog.
WallStreet pays no taxes and is parasitical to the productive economy(www.counterpunch.org/2015/09/01/how-wall-street-parasites-have-devoured-their-hosts-your-retirement-plan-and-the-u-s-economy/), also we need to use the FED to finance a recovery - www.twsp.us
Yeah this is just a really bad explanation of what the "Occupy Wall Street" movement was about. Many of those people knew that just about everything the people on wall street did was legal. Whether or not the government should have made those financial games illegal, the "Occupy Wall Street" movement was furious with "Wall Street" actors who "gambled" irresponsibly with what they saw as their savings and their homes and their livelihoods. The "Occupy Wall Street" movement felt that "Wall Street" had a moral responsibility to keep their money "safe," and acted immorally. Many of them were dumbfounded that those financial practices weren't illegal, because they were under the assumption that government institutions like the FED and FDIC protected them from that kind of behavior, and many of them were rightly angry at the government for not regulating it, but their true complaint was with the way their fellow citizens gambled with their financial stability in such a callous manner.
lol... Who is Mike Norman to lecture people on being condescending? The guy is one of the biggest bullies that I have seen in economics.
+PoliticoSTK 88 Perhaps, but I could tell immediately that he didn't like the sophomoric argument about robbing liquor stores - which is the same old government-as-household fallacy of composition that Keynes referred to. The argument doesn't work and despite the aversion to guns-and-jails, there simply isn't another way to govern us unless you like having a Mad Max world of predatory gangs where "only the strong survive" - but not for long as they too grow older and weaker.
+sensey07 There are tons of untried ways to govern people. It's highly unlikely that none of them are better, given that most of the world is modeled after the US, the first attempt at a workable system. It is just hard to try new things when it comes to innovating states or public services.
I found that comment (about Murphy being condescending) accurate and it's a fallacy to say that whoever points that out must be a good person, he is stating his perception and that has nothing to do with the way he has acted in the past. And I can bring at least 3 situations where Murphy was very condescending in his comments towards Mosler's views. Regarding Robert Brothers comment, it shows how US-centrism works, to say that the US was the first attempt of a workable system is to completely disregard History, what are you even talking about? Did you forget the Roman Empire, the one that promoted the Republic? What about Greece and Democracy? What about the thriving civilizations during the Bronze Age? Because they didn't have cars or planes they were not in a "workable" system? What about the British, China, Japan ... and any freaking other civilization that existed before America was even found?
I never did see a followup video between Norman and Schiff, but perhaps Schiff mindfully took the high road. Norman would definitely have it coming.
@@acommunistdwarf He doesn't suffer disingenuous people very well. He probably believes in only 2 genders also.
As a hard-core Austrian, I think this debate was FANTASTIC. I also think Austrians need to address MMT better than they have so far - AND I think this is one of the best conversations I've seen between the two schools. Thanks!
udical-troll, you're a perfect rep for MMT. Tbanks for setting the example.
+udical out!
People like you drive people away from your goal. Thanks for the conversion.
Bob is pretty weak here. All he need to stress the flaw of MMT is that in Molster's example of Subway coins. Well Subway can issue as many coins as they want, but they have to have product when the customers who bought those coins wanna exchange coins for their product.
As for the government, they can issue as many fiat currency as they want, but when the holders of those fiat currency eventually spending those fiat currency, it will lead to inflation because the government only create fiat currency but they didn't produce any product or service back into the economy while in Subway case, they not only sell the coins but they also product the sandwich for when those coins are claimed. That's the flaw with MMT. Bob should've explained this better!
Mosler actually did address inflation. the BOJ, FED and ECB have spent trillions buying assets and inflation's been stagnant and there's been no effect in the real economy. they could've instead implemented Mosler's policies which target employment and lift burden out of the poorest shoulders in our societies.
That guy who was the first to comment I have seen before. The guys who runs the economics blog. I'm pretty sure he was a wallstreet econ. commentator pre-2008 housing market crash, and he was scoffing at an Austrian economist who was claiming that their was an impending crisis-- literally laughed in his face about it. Then, well, obviously, that guy got his foot stuck in his own mouth. Kind of funny the "condescending" tone he supposedly finds in R. Murphy's arguments- guy hasn't quite recovered since his misunderstanding.
Easy for Austrians to be clairvoyants when they predict 25 out of every 3 crises.
@@fablo7830 Only becuase of government prevention/the delay of those economic crises. Only because the US is the reserve currency. For now
@kippered beef Well, no, that isn't better at all. Why would it be better to constantly be wrong and frozen in fear?
So hilarious with that guy who slams Murphy for being condescending - then proceeds to ask extremely condescending question.
ok, but that's a perfect response to an idiot who is condescending. Don't condescend if you don't know what you're talking about.
Communism and hypocrisy go hand in hand
Lol nice Necro on this thread. I think that guy was a proto SJW. Today we would not even be surprised by such antics.
When you have more hair, these things don't matter.
@@shivan2418 its youtube. Go cry about necroing a thread on reddit
"I think you're too condescending, Murphy! [proceeds to be condescending"
Bob murphs snark is off the clock
@@AnarchyEnsues Bob Murphy is a genuine American hero
@@bobdole57 dude, all he does is repeat Jewish economics like thomas sowell... Not really revolutionary.
@@AnarchyEnsues "jewish economics" That's funny considering he's catholic and people call Hans Hoppe a nazi. Nice try though. "Jewish economics" doesn't sound racist at all...
@bobdole57 dude, its the root of Austrian economics/anarcho capitalism. Its an economic/political system moulded around idealism fantasy idea of removing the state.
A philosophy designed to waste your time with intellectual excerices while people implementing their economic/political agenda take everything for themselves .
Once you realise that hebrew capitalism is enforcing tyranny on the people via their ownership of the media and controlling a super majority of all political campaign money, things like never ending war in the middle east make more sense.
Who else here in 2020? *money printer go brrr*
LMAO
HOLY SHIT HE SAID WE WERE ALL THINKING IT AND HE SAID IT THE FUCKING MAD MAN
Same
BRRRRR
haha
Prior to the Keynesian Revolution, inflation was defined as an increase of the money supply. Rising prices were seen as a function of the increased supply of money.
People who define inflation as simply rising prices skirt the issue. In your list of three reasons why prices can rise, you never even address monetary issues. The idea you can track and measure a general price level is hubristic at best. The economy is dynamic, prices move in different directions at the same time.
But still nobody thinks about the total money supply when setting their prices. Only when there is increased demand prices will change. You might argue that in the long run the quantity theory is right, but as for example 2008 has shown singular markets can have that kind of inflation. The housing prices skyrocketed, but for example food didn’t get pricy that fast. In an idealised market the quantity theory would probably be right, but in reality there is just not enough speed in the money circulation
@@doncorleole2356 given enough time, excess money would distribute throughout the economy. 2008 proves that money can be printed and channeled into an asset class, but the excess money is neutralized if consumers can't exchange their equity for purchasing power. 2023 proves that the quantity of money theory is correct in regard to stimulus money.
@@digitaldough8972 lmao no it doesn't show it was correct. We kicked the van down the road and have had to continually repump money into the system. It doesn't show we can print endlessly and rack up debt without fear because we control the printer (mmt in a nut shell). The effects are short term gain long term loss, we are seeing the effects now in 2023. Our only hope is that the US dollar stays the international currency standard.
MMT economists don't believe that we can "print money endlessly" and rack up debt forever without negative consequences. The part they don't say out loud and explicitly (because it's not going to be popular) is that taxes have to increased somewhere to balance things out. Who will be most affected by this? Those who hold most of the money aka the wealthiest among us. I've only just started listening to this debate so if Mosler contradicts this I'll revise my opinion, but it's pretty clear that this is implied in Stephanie Kelton's book The Deficit Myth.
@@filmjazz to my understanding its not to 'balance out' all the spending, but that at a certain point spending pushes the country over production capacity with excess demand, and taxes serve as a mechanism to pull back that excess demand
Lmao, moderator SLAUGHTERED the definition of insanity.
Did he have his breakfast at a tavern? That was pathetic for a moderator.
lol 😂
@@KrustyOhh he literally interrupts the flow of conversation to haltingly repeat the previous speaker's eloquent question
insanity is when you do something twice.
8:40
"Give 40% of the campaign funding raised to the opposition..."
So, all of them or just the candidates deemed VIABLE by some nonprofit, for profit, or govt? Would it be split 5+ ways for a district (rep, dem, lib, socialist, green, or other parties) election? Would it be done for primaries, funding the same party candidates (20+) as well as the opposition candidates (also 20+)?
Fascinating debate thank you for making this possible we need more of this
@AppleScab (Venturia inaequalis
) Murphy changed what Mosler said to make it sound ludicrous.
Mosler didn’t play that game.
@AppleScab (Venturia inaequalis
) Warren isn’t slimy, he is actually telling you how things work.
i can't see how this is a debate at all. bob has ideas about the way the economy should be "there should be no central bank", and warren has no particular opinion but just says "we currently do have a central bank". those two statement don't contradict each other.
what is frustrating too is that Murphy's angle absolves him of needing to try to propose solutions, policy or practical...every time he was asked about policy suggestions or suggestions for solutions, he shuffled around the question
@Frederick Shull you miss my point entirely. if he doesn't have answers to the problems he insists are present, why are we listening to what he has to say. At least I can believe that Mossler believes he had an idea of how things work, and what to do from there. What does Murphy have to offer? Merely beliefs (and nothing more really) about individual actions (or how he thinks individuals should act) that neither inform his ability to provide a solution or apparently even the beginnings of working towards one.
@@Joshvs3 He believes that the government should absolve itself of any role in the economy. What he fails to understand is that basic principals such as property ownership rights are the construct of government. My one true wish is that these Austrian school economists could have a chance to live in the world with the laws (or lack thereof) which they espouse. It would be utterly hilarious to witness that but it can never happen so they can spend their days in think tanks talking about how if only their fantasy world could be implemented in the real world all economic problems would be solved.
@Frederick Shull nowhere in moslers philosophy does he advocate central planning, i believe you are misunderstanding what he is saying, he is in fact a capitalist and wants to do away with income tax entirely so that more people can buy goods and more people can produce goods. the govt has to spend money into existence and the only reason that money has value is because the govt demands it back as a tax. mosler only argues that there is no need for the fed to have a positive budget, the fed should be spending money into the economy not taxing it out, he argues that our economy is starved of cash.
moslers words not mine "when the U.S. government does what’s
called “borrowing money,” all it does is move funds from checking accounts at the Fed[federal reserve accounts] to savings accounts (Treasury securities) at the Fed. In fact, the entire $13[now 22] trillion national debt is nothing more than the economy’s total holdings of savings accounts at the Fed."
use the case of ww2, our deficit/ gdp was 20% by the end of the war and there no problems, however a year later when deficit/gdp fell to 7% there was recession, also observe the historically low deficit/gdp in the years 1929(.7%), 1930(.8%), and 1931(.6%) that preceded the great depression. also observe tax hikes in 1936 followed by a decrease of deficit/gdp from 5.1% in '36 to 2.4% in '37 with a return of the depression in '37. his core argument is that when fed deficit becomes too small it is essentially taking money from the economy
I don't think it's true at all that Warren Mosler doesn't have any normative statements in there. But Bob Murphy absolutely doesn't just say that we should get rid of central banking or how the economy "should be". Murphy presents what is generally recognized as the austrian perspective on business cycle theory and uses theory to describe how the economy works, or at least parts of it.
@goshjosh If you argue for the abolition of central banking then you can do just that, you don't need to have a replacement. Bob Murphy is against monetary policy altogether, meaning that he is against any monetary authority setting any policy. You wouldn't say that you need to propose an alternative if you argue against concentration camps.
Yes, that is the same Mike Norman that laughed at Peter Schiff on TV now complaining about disrespect. Lulz.
It must be the same rude "in your face ridiculer" Norman . The world could never deserve two!! That would two too many.
th-cam.com/video/sgRGBNekFIw/w-d-xo.html
@@herohero-fw1vc - Petter wrong about what would undo the destruction
th-cam.com/video/sgRGBNekFIw/w-d-xo.html&t=156 or
tinyurl.com/yxxn3bau .
. 29 DEC 2007
07:52 - But I [Peter Schiff] think the economy, in general, is going to be a bigger issue.
I think, certainly by November [2008], it'll be obvious to just about everybody that we're in a pretty severe recession.
.
I think a lot of the voters already know that.
Some of the people here in Wall Street haven't figured it out yet.
.
But I think that the recession, the economy in general, will be a much bigger issue.
.
Unfortunately, I think, you know, it's not tax cuts that we need.
.
We really need a lot of spending cuts.
.
The government has to cut spending because if they cut taxes and then just print the difference what we get is inflation instead.
.
So we have a little bit more money in our paychecks.
But we have to pay a lot more for food; we have to pay a lot more for energy; and of course eventually we're going to see a big increase in interest rates as a result of all this inflation.
.
Well everyone's laughing at Peter Schiff now :P
@@Terribliz yes, we've known Peter Schiff hasn't known what he is talking about for a long time. Some people just can't wrap their head around believing that the government has access to unlimited cash. It goes against everything they've ever been taught about economics.
When the two weird kids in class have a fight
- So you see the government is like a cheater?
- Yes.
- And you don't see anything wrong with that?
- No, that's just the system we live in.
- OK, so when the government does it, it's not cheating, but any other group does it, it's cheating?
- Well, yes they make the rules.
- Why is it OK for them to make rules that benefit themselves, at the expense of the citizens?
- Because they got the guns, and are not afraid to use them.
- And you don't see anything wrong with that?
- No, that's just the system we live in.
Diogo V. Kersting you don’t understand the role of sovereignty in society. Imagine a contract between individual priority owners that sets rules for how the properties look so as to collectively raise the aloe of everyone’s property. Is that sovereignty? Is it evil somehow? This isn’t even how the real world works but any Austrian would have to admit it is social contract theory and there’re voluntary and not evil by Austrian standards. Anarchy really is fake and gay.
@@steviewonder417Sovereignty??? Do you think certain individuals have a 'moral' right to aggress (use force, fraud, or extortion) against others? If your answer is 'No', then you are an 'Anarchist' or a 'Voluntaryist' and a 'moral' human being. If your answer is 'Yes', then you are a 'statist thug'! Make the correct choice, please!
You are so stupid. It's like saying the referee in a game is a cheater.
Yeah, a corrupt referee with guns which won't allow me to not-associate.
@@DiogoVKersting Not associating is not playing the game. If you want that, go live in the forest.
I see you Mike Green. Even though you didn’t introduce yourself, I noticed and was glad to spontaneously come across some earlier conversations with you. I wish you were having a three way debate with an Austrian and an MMT economist. Consider it. We’d love to watch.
I’m no expert in economics, but the pandemic, although 99% of its effects were awful, had one good side to it. It taught people a little tiny bit about supply side economics. There have been times where, no matter how much money you had, you could not get everything you wanted or would normally be able to afford. Some things were so limited in supply that it was just unattainable and some supply was just outright nonexistent. All the demand in the world and even free money from the govt didn’t fix this problem.
That’s funny I think the exact opposite happened. The government literally put money in there bank account they bought food payed their bills and that it is a policy choice to keep the rich getting richer and the poor struggling. Not having toilet paper because of a global pandemic that had people panic buying is not a confirmation of supply side economics. Man Reagan really broke people’s brains.
@@Eastbayrob ?...I'm not talking about toilet paper. I'm talking about all sorts of things that were unavailable due to the restrictions: Restaurants, clubs, concerts -- countless products and services. The government could have put $1 million into my bank account and it wouldn't have made Disneyland any more available to me. The park simply was absent from the market.
@@davidr1620 I though you were talking about electronic chips and was gonna ask why the supplier didn't simply up the price
Show me where MMT claims helicopter money is good and that it solves supply constraints.
@@davidr1620 "The park was simply absent from the market" Nice thought. You could also say that millions of workers were absent from the market, and these were all intentional policy choices that our government made! It really is wild to see how real emergencies (like Covid) can so radically shift the political window. Less than a year before Covid, Andrew Yang and his freedom dividend were laughed out of the discussion. As soon as things got really bad in the US, suddenly "fiscal hawks" were signing on to stimulus checks and 600/week in extra unemployment! Although the same crowd hardly shies away from enormous tax breaks. I hope more people can see that the government doesn't "interfere" with the market; it CREATES the market.
So very refreshing to listen to a seriously civil debate. Kudos to all involved !
you don't know what you're talking about have you ever heard of Merrill Jenkins go look em up on youtube go look up the Coinage Act of 1792 and go look up the coinage act of 1965 and go look up the Federal Reserve Act of 1913 which allowed for fraction of reserve banking which is immoral you're a clown in yourself you don't know what you're talking about
Except that first questioner
Mosler keeps talking 0 interest rates. Who in the world would ever buy U.S. treasuries if getting a permanent negative real rate of return? Not to mention all the inflation that would cause. All treasuries become debt monetization?
Good discussion and still relevant after ~10yrs
On the issue of deposit insurance, it is clear that increasing the level of coverage to depositors permitted the banks to engage in high risk investment activities. The related issue is whether the FDIC appropriately analyzed the risk and therefore adjusted premiums charged to banks based on asset concentrations.
Robert Murphy really does use a whole lot of Straw-manning to make a negative case of his opponent's point of view, instead of explaining his actual point and path forward. I think his opening statements about losing showed he was fearful and unsure of his ability to argue his points.
I understood where Warren Mosler is coming from and the points where he wanted to go.
@CrabApples Bodaciously Bitter Fruit's Kind of funny you think that when Murphy now concedes almost every MMT claim such that he finds MMT to be true but not a moral good or ideal.
@CrabApples Bodaciously Bitter Fruit's But what fears do you speak of?
Anyone else think the Austrian guy looks like George Costanza?
Millennial be like :- Who dat ?
I think he looks like Vizzini unrealitymag.com/wp-content/uploads/2010/11/vizzini.jpg
Cantstandya!!
And the MMT guy looks like Ray Romano
There is no such thing as society.
Hold up man, it wasn’t just a Nasdaq bubble pop. It was across all indexes. Yes the NASDAQ would’ve contracted more than other indexes “theoretically”, but the initial contraction was a healthy and needed market correction after sustained growth over many years.
Some of the MMT folks saw that there would be a crisis before 2007/8 based on an analysis of the private debt sector growing. Steve Keen called it as did some of my friends.
8:40
"Give 40% of the campaign funding raised to the opposition..."
So, all of them or just the candidates deemed VIABLE by some nonprofit, for profit, or govt? Would it be split 5+ ways for a district (rep, dem, lib, socialist, green, or other parties) election? Would it be done for primaries, funding the same party candidates (20+) as well as the opposition candidates (also 20+)?
Mosler misses the point again 1t 34:20 . He says if you borrow $50,000 to buy a car there is not someone else out there who now cannot buy a car because you borrowed $50,000. The issue is there is someone else who cannot buy that car because you have bought it. They have to bid for another car for which there are Not an unlimited amount of cars available for sale.
His subway token explanation is totally flawed because the subway token is worthless without the subway and the limited number of rides. Not the amount of dollars or amount of tokens. Tokens are only a away of either restricting the number of seats that are for sale or gaining payment before you actually ride or bypass the need to exchange payments at the time of queuing for ride. It is the limitation on the resources (seats) that is the issue and that limitation is because resources for one facility or one product have to be bid for against the competition for their use elsewhere..
He meant that the $50 000 are not unavailable. The car obviously is, hence them repeating CONSTANTLY FOR IMBECILES LIKE YOU! SPENDING IS LIMITED BY REAL RESOURCES, NOT PEACES OF PAPER!
@@Stewiehleba That reply "He meant that the $50 000 are not unavailable." is doing a dopey and a statement like that puts you into that category.
You don't understand what fiat money and credit is. The $50,000 is always available - It's called 'Credit' in the private sector and the interest rate is the adjusting factor. Most money in the economy is fiat credit money.
Ther is never a shortage of someone willing to lend on credit provided an interest rate is negotiated.
You think that there is a limit on amount of cars US can produce? US could easily produce and/or import enough cars for every grown individual to have couple of them, get new one every few years, and for those who are well off to be able to collect for luxury or rent (rent a track etc). Constraint is artificial and manufactured in order to control people and create disproportionate distribution of wealth. Ok, CEO managing spaceship company can have enough to have a private jet, multiple residencies, leftover money to invest further or for company's risk management, but shouldn't all workers be able to afford at least single residence, Corolla and something on the side for their own life's risk management? There can't be enough homes and enough cars for every worker? CEOs need to have enough so they can fail in perpetuity without ever being accountable, bribe politicians so they pay large fines with money workers earn, instead of going out of business and to prisons often?
A great debate until somebody let that prat Mike Norman speak
That was the best part 😂
Who the fuck is mike norman
"Informed electorate"
Hahahahahaha. Mosler made an unintentional funny.
Murphy is arguably right about a fixed exchange rate system. Mosler is right about a floating exchange rate system. We and most other countries live in a floating exchange rate system.
Also, there is a fundamental difference in outlook towards "the Gubmint". Murphy & co. think people in government are idiots or worse, and therefore he wants to reduce government policy space as much as possible, e.g. by fixed exchange rates, hard money, etc. Mosler & co. say "hey, fiat money and floating exchange rates give us all this policy space. Think of all the good we can do if we have smart, good policy-makers."
The fundamental flaw from Murphy's side is that hard money and fixed exchange rates don't constrain governments and never have. As soon as they become a problem for the upper class, they just get rid of them - which any government can do by fiat.
The problem for Mosler's side is finding smart, good policy makers.
Exactly
You are wrong...Google "Austrian economics on fixed exchange." I thought I never heard any Austrian take the stand that you just claimed...
@@johnludtke4416 Murphy's understanding of banking assumes a fixed exchange rate. It doesn't matter what google says.
@@ast453000 fixed to what the market values it at...which still fluctuates
@@johnludtke4416 No. That's not what a fixed exchange rate system is. Google "fixed exchange rate."
Dang Mosler has been advocating for medicare for all for a while
How come
22:48 This is not true. If you get a mortgage, and your bank doesn't have that money in savings. You still get your mortgage. The bank (artificially) creates money to do this. The Bank of England wrote a paper about this a while ago, how commercial banks create money.
It's not about that. If you take a mortgage you go into debt, but person who you bought the house from has that money so until he/she spends it technically it counts as savings.
+Miszcz Funcjonowania PiG LolThat makes no sense, what if its a new house?!!!!!
if it is a new house, it will be a profit of the company that sold you the house. Until this company spends it, its their money ready to spend, that's what savings are
Miszcz Funcjonowania PiG Lol Get the fuck out of here! You are clearly missing the point! Haha the company doesn't just let in the house and lets you start paying for it, you have to get a loan, like Onne said they dont loan you anything!!!!
are you stupid or what? the company sold you the house - that's how it makes money. You took a mortgage and went into debt, then moeny fom your mortgage went to the company. there are clearly lots of idiots out there.
Interesting discussion, not really a debate. They should have targeted the differences between their policy recommendations instead of delving into how their systems work. Both are advocating action to be taken, and Mr. Murphy hit it on the head only at the end.
MMT may be highly specialized to the system as it is, but it does not follow that the MMT policy recommendations for change are better, only less drastic. Mr. Mosler brought up that the gold standard wasn't as useful to the gov esp in times of war due to its limitations, as if this were a bad thing. Perhaps from the perspective of the gov, but I think you'd be hard pressed to find anyone else who would see a limitation on war making, misallocation, and destruction as a bad thing.
Can you convince all governments that might not mind waging war on your country to convert to a fixed currency system on the gold standard?
@@Endelite No, and thankfully I don't have to. We already spend far too much on our military as it is, with little or no cost cutting incentives in place, quite the opposite in fact. Our biggest budget busters are entitlements, not national defense. Whether our finances are real or fiat will make little difference to our future adversaries, as it made no difference to our adversaries in the past.
@TheCanMan Can Since 1990 I don't have a problem with that. Nasa hasn't been fit for purpose in decades, and what advances were made through the agency could just as easily have been done under the airforce. The panama canal could just as easily have been a privately funded project if it were really worth it.
@TheCanMan Can Since 1990 "Non of that would happen in the Private sector Come with your delusion"
If it isn't worth doing in the private sector it probably isn't worth doing for the gov either.
.
"Capitalism was suppose to liberate us from feudalism"
lol, speaking of delusions, you are confusing economics with government.
.
"Not eternally enrishine us to those very rent seeking creditors"
Then don't go into debt if you don't want to.
.
"These ass hats make debt instruments "
All the more reason to deregulate the market and let the market forces crush them.
.
"An you 👄 pieces that defend them are equally responsible"
As opposed to you who can't even coherently communicate your ideas. YOU are the clown, spouting nonsense in a youtube forum six years after it was started.
@TheCanMan Can Since 1990 You'll need to be more specific, last I checked capitalism operates exclusively on this plane of existence.
"Every country that goes to war, immediately suspends the gold standard." EXACTLY. No fiat currency = much more limited capacity for governments to wage wars. Pretty sure that's a good thing.
+Shawn Cowden its called war financing the central bank buys goverment bonds in order to fucking fund the war if they were in a gold standard in such discipline the central bank wouldnt be able to fund the war it is a necessary thing not a good thing by the way the golden standard was such a failure that all the countries that had it except the us devalued the price of gold in order to over value their own currency in order to have deficit and start goverment projects
I guess my point went over your head. Not being able to fund war is a good thing.
Shawn Cowden we are talking about the secoind world war thats when the golden standard ended in one side of the war were the nazis and in the other everyone else so what the heck man
Nixon took us off the gold standard in '71 to reduce fiscal strain caused by the money spent on the Vietnam War.... now they can fight stupid war after stupid war without constraint. If our interventions can even be called "war".
Shawn Cowden the took us out of the fixed rate gold bretton woods system they took us out of the strict gold standard in 1933
Make sure you listen to this: 1:52:40
I know, it's hilarious, right?
_"No inflation,"_ my hind foot.
MMT starts with the explanation of the system, and builds up on it. Austrian starts with a fantasy, continue with fantasy, end up with fantasy
MMT uses Japan as a fine example of no inflation happening. Do they use it as a fine example of no growth happening too? By the way, debt can only be payed or even maintained with growth...
japan manly got demographic problems, or is that the debts fault that they are not having sex?
debt can be paid with inflation. inflation can either be productive or unproductive.
@@dannykoman1413 On my way! to Japan. Gonna fix the not having sex problem. Im a huge sex-haver
@@landcruiserfan4206 thank you finally someone taking things seriously unlike that abe guy
@@landcruiserfan4206 they dont want foreigners
“When you need to go to war, you suspend the gold standard.” Gold standard prevents war … another great point, Warren, thanks!
preventing means it is a cause to stop wars. but when u suspend gold standard while going to war, thats more like a result
removing gold standard is like going on steroids. yes, you will improve your performance for short term but everyone knows how that ends
The gold standard never prevents war. It just gets suspended in the face of war.
I would argue that having resources that can be used as money would more likely lead to an invasion/liberation (depending on one's POV). Oil is a useful commodity, much more so than gold now. Notice how the us invaded/liberated some countries and not others for the same reasons. And, more recently, notice how Russia is using its oil as a trump card (no pun intended) for Europe in the ukraine war/liberation (yes, I did it there too).
lol you thought you did something here
I don't think Warren answered the fellow in the yarmulkes question. Did he though? That was around hour 1:25:00
My take-away from this is that the government issues money by spending it into the economy then reclaims it through taxation. Therefore individuals who operarate as government officials operate under a different set of rules than everyone else, who don't have the privilege of spending money into existence and then collect it later through taxes. Does anyone else here not see this as morally problematic? For all the talk about inequality, the real inequality is this big elephant in the room. We have a House Speaker who's been in Congress for 35 years. That's a long time to have the privilege of not having to live within their means and deal with the effects of legislation that everyone else outside the government faces.
If we are to continue with this monetary system, we need term limits.
also insider trading is pretty bad for congressmen
It's called socialism but as Lenin pointed out socialism leads to communism.
Wym their salary is afford to them by taxes
Great debate, but Mosler's use analogies was hiding the facts a bit. The government, he says, can print any amount of train tickets it wants, but he did not address the fact that if it did, each ticket wouldn't buy a ride - there's just not enough trains. Also, he says people work with the aim of paying the tax collector, thus govt money matters, but people don't do it. They work because they want and need the things they can trade for they work. Also, if you added three zeroes to the value of his card, and the tax collector just charged a thousand cards, then the zeroes really would not be significant, contrary to what he said. A great debate, but not so good analogies.
+isacvale
This is true if the economy is at full capacity. If the economy has high unemployment, or surplus capacity, then printing money will increase output. What so many don't seem to understand is that debt creates money, and paying off debt destroys money...so, if the private sector is deleveraging debt (destroying money), then increasing the amount of government money that circulates doesn't necessarily increase aggregate money. Also, most misunderstand the connection between bank reserves and deposit growth, they believe that The Fed is increasing the amount of money in aggregate demand, it doesn't. Only Treasury deficit spending can increase aggregate demand directly. The Fed can only prop asset values, which does really affect the real economy. Mosler's sectoral balance approach is accurate in my opinion, but certainly doesn't tell the _whole_ story. =)
+isacvale
He never advocates for the government to print enough money so every single person has a ticket. He's advocating for them to print, and circulate enough tickets so that the trains don't have empty seats. In other words the government should spend enough so that there is 100% employment. Austrians say that would be problematic. But under the current configuration of an economy with floating rates and a sovereign currency it would not. The proof is already out there, we have 7 years of data on deficit spending since 2008.
You're right that people work because they want and need things. Mosler doesn't argue that. He's saying that people work for USD, as a form of payment. They will not accept payments in gold, peanuts, buttons, pigs, etc. They accept only the USD as payment. They do that because it is the only currency they pay their taxes in. The US government does not accept any other form of currency. That is how the government has a monopoly on the currency.
+isacvale
There is no limits on the number of trains that can we can build. When the demand for train rides increases, the train companies will strive to meet that demand. Although the creation of more trains may not be instant, typically there are enough empty seats already available to meet demand until more can be created.
Think about a barber shop. If no one is at the barber shop, the barber isn't producing any hair cuts. But if the next day, 50 people show up for hair cuts, the barber will create 50 hair cuts. If even more and more people start demanding hair cuts, the barber will hire more workers so that he can meet demand.
+donnabret On that belief you have left out the critical part of barbers having enough haircuts. The reality is there is nobody who knows how many haircuts are needed or wanted in an economy as her is nobody who knows how many of any particular thing is needed at any one time. That is an over simplification that leaves out the scarcity factor of economics and the realtive price or one service compared with another.
It is all to simplistic to say there needs to be more demand created to make more work. It misses the critical fact that shortage is the consistent problem. Not shortage of haircuts but shortages of what is needed to respond to the ever changing needs of people. There are always shortages of some goods. Eventually people by their choices decide what the shortage of goods or services are. They may be particular medical requirements, roads in the right place, vehicles, vegetables or other foods and a host of other goods. the part that the MMT theory leaves out is 'Price.'
Price determines how many goods and services of a particular type are to be made and distributed to many places for sale so people can buy them.
To say that making more demand will solve a problem is only looking at one side of a problem. Supply is the other which must take into consideration price. Price is determined by people ultimately since they will pay for some things but not pay the price of others depending on many of their own factors.
The same over simplistic view applies to tickets on a train. Just issuing tickets to fill a train would be plainly stupid since that leaves out the price factor entirely as well as the competition for resources that is expressed in prices.
Would you make more demand for all goods by issuing tickets? What about making more demand for the people who make train brakes or people who fill swimming pools or people who pick vegetables or accountants or drive taxies or for the tens of thousands of goods on a supermarket shelf ? How many would you make and what price would you charge? If not who would do it and what prices would or should they charge?
+Wayne Vernon
Again, I don't like analogies because they can be stretched to gruesome ends. But keeping "trains" at full capacity is not attainable nor desirable. First of all, to do it means the product ("train") isn't being paid with value, but with fiat, causing havoc in a system with limited supply of resources (havoc such as inflation, inefficiency and so on). But, more interestingly, the consumption of a good or service, and therefore its scarcity, is a signal to the market to produce more of it. How much of a good is being demanded and how much people are willing to pay for it allows resources to be allocated very efficiently without central planning.
Just two more points: people do not accept USD exclusively so they can pay taxes - they do it because USD has historical inertia (it is a feasible system) but mainly because they are forced to (as they are forced to pay their taxes). I can't imagine why such a nonsensical proposition is so widespread. In the existence of better money, we'd all get only as much bad money as we're forced to (preferably zero).
Finally, no one can build as many trains as he'd like because of scarcity - and we can't even tell how many trains we need if we keep filling them artificially. If no one wants trains, or haircuts, these business should go bankrupt so resources can be allocated on things people want. It should be obvious, but keeping full employment for barbers and subsidizing haircuts no one wants is a terrible way to run an economy.
I FINALLY understand all of this now. The Austrians want government accountable to the people. The MMT folks acknowledge that a man with a gun makes us do anything he pleases. The Kenesians want to pretend there is not a gun to anyones head.
Its all about who's hand the gun is (supposed to be) in.
Indeed. All of civilization is a hierarchical tyranny based on who holds the guns (weapons)
Haha like that conclusion! Short and sweet!
34:34 Wrong. The person who borrowed his $50,000 to buy the car now has a car, and there is 1 less car in the economy for the saver to purchase. People aren't after dollars; they want what the dollars buy. Wasteful expenditures are wasteful expenditures. One's consumption of scarce economic resources retards the ability of others to consume the same good.
That is both an oversimplification and misrepresentation of the Austrian view. They see neither government nor the market in the way you describe. One of my favorite Rothbard quotes (like him or not, it rings true):
'It is no crime to be ignorant of economics, which is after all a specialized discipline and one that most people consider to be a dismal science, but it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.'
You make very good points. I love how you specifically point out the incorrect statements. And totally didn't just say "it's wrong because it's wrong".
You totally could not copy and paste this comment to apply to literally anything. You also could not post this comment unless knew exactly what you are talking about.
@1:53:00 in summary, Murphy is straw man-ing Mosler. Mosler, and no one in the MMT community, has ever said government is not currently self-constrained in budgeting. The whole point of MMT insights is that government can, if it decides, remove those artificial constraints, and nothing bad would happen. The new constraints, according to MMT, are resource constraints and full employment, you cannot have -1% unemployment/ 101% employment, you cannot employ 50,000 trained teachers in classrooms if there are only 49,999 trained teachers. This is why MMT is so vital, it allows legislators to remove currently self-imposed restraints, and impose superior restraints, which for a monopoly issuer of currency are resources constraints, and inflation constraints. MMT is not about no restraints. MMT is not a licence to print money. Those who think so are pathetic and dishonest or have not learned what MMT is all about.
Bijou Smith it’s funny how everyone is saying they are getting the strawman treatment.
SoulfuzZ the truth is often comedic.
SoulfuzZ especially to the initiated.
If I work and make $1000 a month and I lose my job. The government comes in and pays me $1000 a month. Why should I go back to work? Am I now counted as employed because I am on the government payroll? What incentives individuals to create and innovate in society? The problem with government spending is that it is inefficient and creates massive waste. I have audited government budget's.. they have a policy which is to spend spend spend otherwise their budget gets cut in the next fiscal year. What is stopping the elite to spend on the elite and leave the serfs behind? I mean all you would need to do is just bump the hand out another few hundred bucks. Where is the study on welfare and perpetual poverty?
In the future, Mosler needs to wear a head mic because you can't hear him when he turns his head away from the mic.
Yeah I was struggling to hear him too.
The money part of the equation don't matter, that's always infinite for our federal government, the ONLY thing that matters is we have enough real resources available to buy with that money. So all that matters is govt is investing in and strengthening our PRODUCTIVE CAPACITY to ensure the available real resources are available to buy with any future SPENDING
The one thing we know, that government is strictly unable to invest productively. Most all it does, is pay costs for unproductive action. How much income does the road generage? Well, some. How many roads is enough? Well national income is growing by half a dollar for every dollar debt taken. That should give you a clue. So we take a 10^12 USD more debt. That'll help, says the MMT.
Actually there's evidence on both sides of you get beyond ideology. Counter examples: US private healthcare costs far more per capita and delivers worse outcomes per capita than public option healthcare examples such as the healthcare for US veterans, or national systems such as in Australia or Europe. Don't believe me on the worse outcomes then do some research, but if you want a simple way of looking at it the average US citizen's life expectancy has been going down even as the rest of the world including Australia and Europe is rising. Another example of efficiency is the way the CCP has modernized Chinese cities with world class infrastructure. Look at US cities and so many have such rundown infrastructure that citizens in other countries would be horrified.
@@joythought For every wealthy chinese, there's 1000 of their supporters living in the countryside in abject poverty. US healthcare is a scam, because of government bs regulation. US is dropping because of deaths of despair. Suicides, opioids, etc. Paying 1000bucks for 20 bucks of insulin, that is a decade out original patent. Yet somehow the monopoly is upheld, because of evil government regulation. Health outcomes are very fine, when you go to the hospital. You will get treatment. That is not nearly as certain in single payer systems. You will get put on 6 month queue on anything not acute. Acute? Sure, kinda ok. Elderly and in long decline in health? Good luck.
Simple way of looking at it? Has completly assbackwards results.
Which is stupid because it hinges on the government not being corrupt.
@@Tenebrousable China just passed us in life expectancy lol
Mosler. "If the gold standard is so great why do governments suspend it when they go to war?" That question implicitly assumes that going to war is a good thing. War is a bad thing, always and everywhere, and the gold standard gets jettisoned because it would constrain war and advantage that/those countries with greater reserves. Period.
I’m glad to see someone has payed attention to the this part, exactly!
What if you are getting invaded and you need to defend yourself.
Why is Warren Mosler debating George Costanza?
Banksta$Gangsta - The classic: “When you don’t know shit, talk shit” tactic
A couple of things you have to ask yourselves is why MMT may not be practical for us, since if no answer can be found, it is a sound path to embark on.
MMT's core fundamentals derive in part from Keynes' theories, which many would argue were an ideal set of monetary & fiscal policies that could help revive economies that collapsed due to a decrease in aggregate demand. However, Keynes himself argued that his theories where to be applied only under specific circumstances where AD fell and AS (aggregate supply remained constant) in which case the Government should increase their spending and create a fiscal deficit to consume the extra surplus in supply that would remain available in the economy in order to cut the bottom & later on the top from the business cycle. In order to do this, Keynes argued that governments should run a fiscal surplus during the boom years, reducing the monetary supply in the economy that had been introduced during the bust period. This is of course a huge oversimplification of his theories, however, few economists outside of the classical schools of economic thought found much issue in these recommendations, for which they were implemented by governments all over the world. The issue of course was that economic assumes that people are rational, at least to some extent, and that politicians want the best for their country, but as we all know, it is not from the goodness of the butcher's heart that we get meat to eat for dinner, it is due to their own self-interest. This meant that nations all over the world took Keynes idea's and kept only the part that was politically profitable, at the end of the day, who cared about the business cycle when elections creeped up in the corner, right? This has led nations all over the world to create huge fiscal deficits that they will never pay off. This has created different consequences for different nations since each situation is different. For those that borrowed in other country's currencies, the risk of default grew exponentially, causing many economical collapse along the years. For others, welfare states where implemented with the best of intentions to ensure that the people found themselves better off regardless of their faith, & slowly but surely these nation's cultures and motivations to continue innovating, continue growing (in terms of REAL GDP) and continue prioritizing their liberties over their paper money has subsided.
Now, where could MMT fail in the US? Let me start off by being clear, I am not sure whether it would work or not work, I am not sure whether it is desireable or not desireable, frankly, each individual's morality & ideology will lead them to a different conclusion, but I am sure that it is essential to question any theory or economical current that one seeks to adopt BEFORE doing so.
Firstly, for MMT to work the Federal Reserve would need to be politically independent in order to act in response to the levels of inflation and not to the demands of a president or congress seeking re-election. We know that on paper they indeed find themselves in this position, however, just a quick look at present times and at what has been historically done to Keynes' ideas can tell you that this is largely an idealistic utopian belief.
Secondly, The Federal reserve would need to have real time, exactly precise data on what the current monetary supply IN CIRCULATION is, the actual rate of price inflation in EACH AND EVERY INDUSTRY AND REGION since bubbles can form in all asset classes as well as all cities in the country, and one number reflecting all states and cities would not accurately do justice to the real situation on the ground. It would also have to find a way to inject or retrieve money from certain sectors of the economy and certain regions of the country without necessarily impacting all others, which would prove excruciatingly difficult in this era of special interests.
Thirdly, the individuals at the federal reserve would not only have to have even more power than they currently do, they should be expected to exercise this power absolutely perfectly, making all the right decisions at the exact right time with no margin of error whatsoever.
Fourthly, the currency value of the currency in foreign exchange markets would be expected to be analysed and controlled heavily to ensure that the country's exports remain competitive in the global outlook to ensure that more productive, supply generating companies and jobs are not lost as a result of government intervention, which would be considerably difficult since our currency follows the laws of supply and demand similarly to all other goods and services.
Even more points: Unelected officials will be given the remote control to our economy not only with the ability to create money like they currently do, but with the ability to decide or directly guide the taxation imposed upon the population regardless of the will of the people, since imposing taxes is vital in MMT's regulation of Inflation.
- In the event of that a given good's supply is reduced substantially, say Cars, the Fed would have to ensure that none of the money being introduced in the economy be directed towards the purchase of cars, since doing so would inherently become inflationary quite rapidly, for which they would have to greatly reduce the freedom independent adults have on what they want to do with the product of their work, going far beyond what we now consider the role of a government that believes in democracy and the will of the people.
- In the event that a mistake is made and inflation arises, taxation will have to be increased to levels much higher than what we currently consider reasonable, which will decrease motivation of production in the private sector thereby reducing aggregate supply of goods and reducing the amounts of goods available in the economy for money to purchase, creating more unemployment and either worsening inflation if people are subsequently employed by the job guarantee that MMT's superstars prescribe only to bid up the prices of these goods which are collapsing in supply, or creating mass suffering amongst people who have no job, have no money, have high demand for money since their tax obligations are high and are forced to see prices rise around them.
Many more things can be said about the theory but I've gotten quite tired as is. Again, I do not claim that these points are inherently valid or that MMTers cannot provide me an answer for them, as a matter of fact, that is exactly what I hope will happen as the reason I post this comment is to get some insight as to how you would combat these issues if MMT were to be implemented.
Personally I find many elements of MMT really insightful and extremely useful, whereas I struggle to grasp other elements of the theory like any other theory out there. Apart from the Job Guarrantee, I attempted to leave out policy prescriptions since they are for the most part absolutely appalling from my point of view, and it serves no purpose discussing them until we have reached a consensus on how MMT would actually work.
Whoever you are, & I plan to comment this on multiple videos to get more insight, I highly encourage to write your thoughts and comments on what I have just laid out, as well as any concern or alternative you have for the theory, please keep comments civil so we can learn and grow together, thank you!
You are the type of person that this world needs now more than ever. Thank you for this comment. Some of the stuff in this comment is stuff I never even considered and ot impacted my view of MMT significantly.
The guy on 1:29:35 looks awfully familiar! Isn't it Parker Lewis?
The person who said it best was Lysander Spooner.
"A man is no less a slave because he is allowed to choose a new master once in a term of years."
Lysander Spooner besides being my great great something or other was a member of the first socialist international, alongside Marx. He was also against wage labor entirely. Not quite the Rothbard before Rothbard he is remembered as by libertarians.
The fallacy is that you imagine yourself liberating him
The biggest drawback I see with MMT is that Mike Norman supports it publicly.
The austrian guy is never able to try to say something is not true in what Mosler says. MMT is not about what should be, but mainly about "how things actually happen". Quite hard to contradict.
Except that's not true as it's based off of philosophy where as the 'Austrian school' is based off of philosophy and demonstrated fact.
Oh really? So central banks pick up money from the trees. Or maybe they fish them...
stefanobc1971 no - they print it :)
Christian V Petersen
ofc they just push buttons. Explain it to the Austrians. They can'd deal with it.
jfdhgds
MMT is based off accounting not philosophy.
damn, how didnt bob murphy at @1:06:40 say something in the lines of "so you want few private bankers to a money monopoly through the fed".. Im surprise he didnt say anything else there
"Mr. Austrian got his ass kicked...butt I won't explain why"
mythirdaye He probably assumed that nobody who watched the debate would need that explained to them.
After continuing to listen to this debate, I'm shocked to realize that Warren Mosler hasn't the faintest idea of what money is. On more than one occasion, he refers to the central bank as a "score keeper" and that money is just a way to keep score. This view is utter nonsense. First of all, even if it were true, Mosler assumes that the score keepers are "playing fair" and not picking the winners and losers in the "game". More importantly, however, is to understand that money, at its core, is a form of technology that facilitates the exchange of real goods and services. When I do my job and get paid, the money I receive is a claim to goods and services in the economy. When government (or a counterfeiter) creates money out of thin air, it does so having produced nothing of value in return. This newly-created "money" finds it's way to the wealthiest and most politically-connected individuals and special interests, who benefit before prices adjust to the inflated supply of money.
You're thinking of money as some moral issue of real value. It's just a trusted IOU with the trust coming from legal force of the government. The real value comes from people doing things to get it.
jazeboy69
There is both a moral and economic component to unbacked fiat currency - both of which are harmful. We can see this when we think about a counterfeiter printing paper notes in his basement. We intuitively understand why this practice is morally wrong, and it's not because it is illegal. If I print money in my basement, I am creating claims to goods and services without having produced anything of value in return. When I spend counterfeit money, I am telling a lie - I am telling the recipient "I did something to earn this and now I'm exchanging that 'stored' value with you." From an economic perspective, my ability to print unlimited notes and spend them as I see fit will result in distortions in the market toward shorter-term consumer goods, and away from savings and investment. The skew in spending caused by my counterfeit spending spree will distort price signals in the economy, leading to a less-than-optimal allocation of resources if this practice is continued over time. Now, when we pass laws to allow counterfeiting on a mass scale, does this solve either the moral or economic problems with counterfeiting? of course it doesn't.
+gergenheimer again I hear you but why a shiny yellow metal and not red or grey? Gold isn't related to morality unless you think a god gave us just enough of a certain element to support our money supply. Can you at least tell me why gold? Why not titanium or platinum much better elements IMO.
+gergenheimer counterfeiting is illegal in the same way painting lead with a yellow colour is so I'm not sure what your point is.
jazeboy69
My point is that "legal" and "moral" are not the same thing. Just because something is technically legal does not mean that it is morally justifiable or economically beneficial. An example of this were the fugitive slave laws. These laws required American citizens to return escaped slaves to their owners. The entire state of Wisconsin stood its ground and said "we will not enforce the fugitive slave laws, because we know slavery is wrong." Would anyone today say that the citizens of Wisconsin were being immoral because they defied this law? Part of the problem is that I think you are applying a strictly legalistic standard to the word "counterfeiting". To you, counterfeiting is someone creating money who doesn't have the legally-granted authority to do so. The more accurate and relevant definition of counterfeiting is any time force or fraud is used to game the monetary system in your favor. This is precisely what governments do when they grant themselves the right to print money, while keeping it illegal for you and I to do the same. This gives politicians and bureaucrats the incredible power to distribute newly-created money to their friends, family and the powerful and well-connected, at the long-term expense of the rest of us.
1:25:50 that man in the green shirt has defintely committed war crimes
Wow AustrianSchoolSwift ik you I got banned from the Austrian server
57:37 US late nineties private sector si deficit spending -that drove the y2k boom / credit boom
1:21:35 the question here was the most articulate of the entire session. The answer it got was...umm... Well, you be the judge
Dimitri - Exactly - and Mosler did not answer it but tried to go on some rant about restricting the supply which he says caused someone to miss out.
Not so in the real world since there is not a fixed amount of money needed for every thing that is sold which is reflected in the adjustments that we see as changing prices of goods or services. When money is short and demand falls so do prices adjust to a lower level and that is the adjusting mechanism that results in jobs for all if there is not interference by legislation that demands prices stay too high or too low or quotas on the production or purchase of goods. Mosler ignores the price factor which destroys the credibility of his argument.
The answer is pretty simple. The contract remains the same. If you want to factor price levels or other factors into your contract, there's nothing to stop you doing that. This is already done with inflation indexed bonds.
@@jetfaker6666 why complicate contacts and investment to redistribute money to specific sectors in an arguably sneaky way.
I totally agree! This is the best question! But I think we all know the answer: the purpose of the new money supply is to put extra into their and their friends pockets(change the distribution), disguised as to save the market😂
Correct. Mosler doesn't address the question which cuts to the heart of the debate. The current monetary system is merely a mechanism of control. Mosler, and all MMTers, believe in the legitimacy of redistribution by governments while hard money advocates believe in meritocracy. The Mosler Murphy debate is really a debate about Marxism/Socialism vs Libertarianism.
I like how the moderator pointed out that the similarity between the two approaches is that they are narrative. I've studied both separately, and never realized that aspect as something they had in common.
That’s all economics can ever be
Insofar as something is historical it is narrative. The logic of praxeology is timeless, however.
What does narrative mean
@@steviewonder417 thank you, how is this not obvious to everyone
@@TheSnookerGym they only can describe economic information based in history
The MMT turns up without something to write and has to take one from somebody else... The irony burns.
In Dr. Murphy's closing remarks he talks about how both models are looking to change the system from the way it currently operates, which is true, but I think there is a major difference between tweeking the system and completely upending the system. Just shifting to a fixed currency from a fiat currency, as would be required under the Austrian model, would have MASSIVE impacts on your society and would take decades to reach an equilibrium. Dr. Mosler's proposals would take a few tweeks that would take a couple election cycles, but it would not have that period of intense market correction.
There’s no equilibrium in life, and that’s exactly where Austrians study the best, in the margin.
'Permanent zero rate policy'. Hmmm Einstein, isn't eliminating the time value of money what got us into this inflationary financial mess?
38:15 If a steel monopolist sets price, the own rate is zero. There it is. Government doesn't have a monopoly on currency. It only monopolizes its currency. You can hold gold, euros, or bitcoin as currency, just as you can build with Bethlehem steel, or Japanese steel, or aluminum. And on tax day, you can convert your gold to dollars and please the taxman and pay him with his dollars while standing on your head and singing the national anthem, if that is what he wants.
Unfortunately Dr. Murphy really didnt bring up important Austrian concepts or do a very good job defending it with the Austrain logic. For example when Mosler was talking about 0% rates, Murphy should have said, "creditors wont lend precious capital for 0% return. The risk differs between each debtor and creditor and interest rates are a price for that risk compensation" etc.
Mosler was saying the natural interest rate for a monopoly supplier is 0%, he is not saying that users of this currency will lend to each other at 0%.
Macro Lux over 90% of money is created by banks they are also monopoly suppliers. it is the APPLICATION OF INTEREST to moeny creation that is the problem.
Adem what precious capital ? the central bank (government) and the commericial banks cost to create money is 0. they have enslaved us all by charging interest to our debt obligations that does not exist. When you takeout a mortgage to buy a house for say 100,000 the bank gives the seller the 100,000 and you have to pay the bank 100,000 plus interest. the banks only created 100,000 in new money so where are you supposed to get the interest from ?? the interest was never added to the money supply so it is impossible for all the debts to be paid off. thats whywe have to have Inflation (new loans/money) or else the interest destroys the money supply.
gpain616 Capital is finite to investors as no dollar can be in the two investments simultaneously.
You are thinking about today's money supply that the fed allows banks to borrow freshly printed money from the Fed at 0% (0% funds rate). Traditionally how were loans lent out? Supply and demand of the banks funds. For the bank to lend money it needs depositors. The interest pays interest to the depositors and also a small profit for the bank.
But there is going to be a problem, similar as Japan, that you cant print youth. By lowering rates to 0 they are subsidizing the young and reckless and indebted by hurting the prudent and savers and capitalists. We will get to a point where the largest births in US history, the baby boomers, will be retired. And at 0% interest and CPI (lets use the governments numbers for sake of simplicity) of 2.5%, not only will they drain through their savings without interest to compensate their retirement but they will lose their savings even faster due to inflation.
Adem Tumerkan capital is infinite. banks creat money through fractional reserve banking. they make a loan of which and i gave you an example, they Create the PRINCIPLE into the money supply. but they charge interest on it. the money to pay the interest does NOT exist. its usury. do u not see the flaw here ? banks can grow and have grown the money supply exponetialy. also look at private debt in the usa almost 200% ... WHAT SAVINGS ?? their is none. all the interest payments owed from past loans are eating all the new money created. its a debt trap , a snake eating itself. you can not have an economy with Interest/ USURY as its monetary system.
We will go to jail (a gun to our heads) if you don't pay your taxes, right now. So it is that Austrians want to change a monopoly FIAT monetary system while Mosler wants to use the current system to make different policy decisions on how its distributed. Austrians need a constitutional change while MMT only needs Congress to change spending budgets.
The constitution restricts the government from emitting bills of credit, instead they may only coin money. Please explain how you got that exactly mixed up. That is exactly why they created the FED as 'independent', because the US government could not emit bills of credit. The FED US Treasury arrangement is a technical work around of the constitution.
23:51 did the moderator just call Robert Murphy... "Bob"...? smh
@Jesus oh, ok my bad :D
Anybody else enjoying this 2024.
Interest rates aren't solely tied to currency exchange rates.
I think Mosler is ignoring how interest rates affect all capital allocation decisions not just what currencies FX traders are going trade.
Controlling interest rates works no better than wage and price controls. It causes a Misallocation of capital, Malinvestment and many many other unintended consequences.
Mosler is interested in making money, not the logic of a free and fair society.
MMT is like one of those FREE energy video.
@TheCanMan Can Since 1990 does not even make sense.
@TheCanMan Can Since 1990 No dont wait. just go way.
Can someone explain to me what is meant by fixed and floating exchange rate and why , according to MMT, the interest rate should be 0 in a floating exchange rate system ?
How much euro is 1 dollar? Im a fixed exchange rate sys this is fixed by let’s say US gov. So the fed has to do eveything to keep the fixed exchange rate. This limits the fiscal space of the gov, and adds burden on fed without that much of benefit. It is suggested the interest rate zero because higher interrst rate might cause higher inflation, in comtrast to the conventional wisdom, also suc rate is basically free money for the rich, UBI of the rich, and at the end lower interest rate might help economy growth (this is conventional).
Mosler offered the gold standard as an example of fixed exchange. Its essential difference to floating exchange is that it represents a hard limit on policy; without this hard limit, the interest rate tends to zero under a floating exchange because of political rent-seeking, but because it's technically legal and regulated, it's all good.
Mosler blurred the definitions, implying that an attempt by the government (or perhaps anyone) to control (change) an exchange rate, amounts to a 'fixed' exchange rate system.
Murphy: we should just have no government at all
Mosler: we should get rid of the PAYGO rule and focus on good automatic stabilizers
Murphy: See?!?? We’re both just as radical!!
Murphy is crazy
No, he isn't.
Well he literally didn’t make that claim at all but ok. Easiest thing in the world to do is mis characterize someone’s argument and then debate your own mis characterization
Appeal to ridicule
@@sammearle Murphy’s an anarcho capitalist. I actually agree with this comment. Austrians are more heterodox than MMT. That’s a good thing.
I love the 9mm analogy. Makes a lot of sense that the only way to make gov fiat valuable is by threat of violence. Aside from that the card isn't the currency. It becomes the asset, like a concert ticket.
He says that austrian economics isn't libertarian politics packaged as economic theory, but he does repeat libertarian talking points like 'govt is violence'. Yes, I agree, but I thought that was inelegant.
Yes gov is a monopoly on violence. When you have a people’s gov however that means nothing more than the people are in control. It’s funny to me libertarians think that this is evil yet they think they are sovereign and have a monopoly on violence where it concerns their property lol. Quit being a child. Violence is ontologically true.
@@steviewonder417 so hard to deal with this level of ignorance. The analogy was simply a good one & I never mentioned libertarians. This is about macro economics & the austrian school. The analogy is about the specie of currency & how only a fool would want to hold fiat as their capital. So the threat of violence becomes necessary. Sound money prevents the need for violence pertaining to the monetary system.
@@freemarketeer7093 you need fiat you numpty because of said monopoly. What’s crazy is you think we need less tax CREDITS (currency) and more unemployed even when you know fiat is only scarce because the monopolist needs you to provision the government through our collective labor. Why do you want to retain the false edifice of that scarcity imposed on us being a real scarcity?
@@freemarketeer7093 money or no money. Fixed exchange or floating violence is and will always be. Libertarians are idiots who have no clue about anthropology or history and that the record shows violence even war was prior to the advent of money especially a monopoly on it. Read Graeber and get a clue dude you are lost.
One Austrian economist who has developed a comprehensive theory of economic cycles (which is different from a "financial" or "business" cycle) is Fred Foldvary, at San Jose State University. He accurately forecasted the 2007 crash of U.S. property markets and how this resulted in a financial meltdown. What Fred Foldvary has factored in is the operate of land markets and land speculation as a fundamental driver in the cycle. He does not make the mistake of calling the crash a "housing" bubble. Land prices climbed at rates not sustainable given the decline in household incomes and household savings. Add to the problem the pattern of deregulation that resulted in explosion of the subprime mortgage lending loaded down with outright fraud and predatory lending, and the private label mortgage-backed securities this market generated finally blew up and caused investors to abandon the conventional MBS market as well. The financial implosion was on.
Sorry for the late reply, but isn't Foldvary a Georgist? I know both schools reach many of the same conclusions, but still.
@@wallycheung Fred did hold many of the same views as did Henry George. I do not think he thought of himself as a "Georgist." At best he might have accepted the term "Neo-Georgist". Unfortunately, Fred died in June of 2021 following a fall at his home.
in a sense a riskless interest rate should be zero. Govt doesn't need to borrow from the private sector if it can borrow directly from the Fed by means of an accounting entry. Problem is then there is no constraint on money creation. The creation of a govt bond actually acts as a brake, being a declaration the money is a loan and should be repaid.
Isn’t the Fed privately owned?
I think the MMT guys miss something. Governments are *great* at misallocating capital. We can see with Greece and Puerto Rico, where their debt was *cheap* that they were not able to spend it in ways that properly allocated capital. The advantage of fixed rates is that economics then becomes about trade and production; and governments weren't able to outcompete those against whom they had a trade advantage (cheap debt for funding investments).
As well, they create demand through taxation of dollars. The 'at the point of a gun' analogy then rises to the fore. You know what works really well for creating demand for debts? Enforcing it as legal tender. Only enforce contracts denominated with dollars as (at least) one component. VISA is perfectly allowed to take my lump of gold to pay my bill. But I *MUST* give them at least the dollars we agreed to. So, I will want to go get dollars.
Misallocation of resources and coercive control - two inevitable results of mmt
"It's not easy for a central bank to create inflation, they've been pumping out 85 billion a month in QE!"
I wonder what he'd say in 2020 when they will print untold trillions over the next couple of months and about half of Americans are shut inside not producing anything.
There has been plenty of inflation since the 08 collapse but it has been in the non functional economy. The stock market and real estate as an example.
@@magusyilie You're absolutely right. People think if we have inflation we must see things rise uniformly in all asset classes, but that's not true. Prices of TV's can go down while prices of cars or gasoline goes up. Real estate is a mainstay reflecting inflation, because as credit goes up, RE is a main receptacle for such credit expansion. Prices frequently drop so much on used cars because credit terms are less available than for new cars.
Lol have you actually looked into how these these relief packages are funded?
The money that being used to find these packages will not and only fact cannot create inflation.
It is what the monetary world calls immunized money. It is coming from private sector savings that is to say bonds, via reverse repo at zero percent interest which means zero market risk.
I’ll summarize here from what I can gather from each side:
1. MMT: Short-run non-neutrality of money; Long-run non-neutrality of money.
2. Mainstream: Short run non-neutrality of money; Long-run neutrality of money.
3. Austrian: Short-run non-neutrality of money; Long-run non-neutrality of money.
‼️On the surface, it seems like MMT and Austrians agree on money’s effects on the economy, but I will argue in short that both of them mean different things when they claim that money is not neutral in the long run. ‼️Austrians
coming back to the point about money’s effect on real variables, it seems that while the mainstream and Austrians differ on the long-run effects of increases in the money supply, they both agree that the kind of pecuniary benefits MMTers support with an increase in deficits through total debt monetization is not viable. I found it extremely telling, and very amusing, to see this comment from someone in the debate who supports the Federal Reserve’s monetary policy in response to an MMTer:
I dont know what else to call “printing money makes us richer”. What’s a better label?
This point can be related to Austrian capital theory, which has somewhat influenced the debate, but not to the extent I think is appropriate. That same commenter made several related points about one of the overlooked faults of modern monetary theory. That is, there are constraints on the policies which MMTers are attempting to put forth in academia. These constraints are related to real factors:
There are a finite amount of real resources that can be used to invest in projects or spend in consumption. This could mean money in a traditional savings and loan bank, a bond mutual fund, a pension fund, etc.
If you think that there are not real resources being moved around in capital markets then you reject basically all economics at a fundamental level.
If you do not think that real resources are moved around in the market this implies that financial markets have an infinite amount of resources to go around to fund any project we want. This is not the case.
Someone else made a similar point:
There is a real resource constraint - if you use real resources to build a factory, those are resources not available to make chocolate cake. If all output is consumed, there’s nothing left over to use for investment. At full employment, this constraint binds, and is what determines real interest rates. Everyone agrees on this point.
For the mainstream, the benchmark model is the real model that would hold at full employment. Keynesian effects enter through the deviations from this model. For MMTers, the benchmark model is a nominal model, where actual quantities of money are sitting around in different places in the model, and the government can act on those quantities. That’s why the discussion of “loanable funds” is so confusing. The mainstream is thinking about the real constraint, while MMTers are thinking about the nominal balances.
I agree with their points completely, especially when one of them ironically uses the phrase many Austrians wield against these very individuals, “if you think otherwise then you think markets are able to create goods out of thin air.” However, I don’t think their arguments go far enough, particularly when it’s stated, “Of course, in recessions when we have underutilized resources, there is less if any competition between the private sector and government. But we’re not always in a recession.”
To add to their stance, it is important to remember some of the most important points of capital theory. First, capital is heterogenous and multi-specific. This means not just any pieces of capital or labor can “fit” together, they must be complimentary to one another in a given production process. Each factor of production has an opportunity cost, especially the less specific it is. Many factors have several uses, making it more versatile in production and it’s demand more elastic. If a given production method is found to be unprofitable, then the capital used can be reallocated to another industry or sector which needs it. But this comes with a cost, when capital is reallocated, it must often be changed, restructured, or formatted to adjust in a new factory or firm. There are therefore transaction and transportation costs involved when resources are allocated to new places by changes in monetary policy. This is what Austrians mean when they say money is a “loose joint” in the system. When there is malinvestment, resources are wasted because they are often very specific and cannot be inserted into another production process, making it idle. The MMT position completely ignores this.
Second, interest rates influence the value and supply of capital. If interest rates rise (fall), then the price of capital tends to fall (rise), but this process can be reversed if the interest rates don’t reflect the time preferences of individuals. This is a point that MMTers miss, and is related to Austrian business cycle theory. Labor is also affected by these policies since it must be complimentary to capital used in specific processes that are affected by them. Otherwise, workers must be retrained to be properly absorbed back into the labor market in accordance with a given capital structure that changes when prices, interest rates, or government spending and taxation change. And with MMT, there would be high rates of volatility in these variables.
Yellow/Blue _Austrian Watchman how exactly does MMT not account for inefficiencies? Isn’t that what prices are for? Of governments set the prices through their spending why don’t they just shop around?
@@steviewonder417 I wouldn't bother, he doesn't really know what he's talking about anyway. Still trapped up von Mises backside.
F Bordewijk you should put in a little more effort, some of us are trying to figure things out and all the insults from the MMTers isn’t winning anyone over. I’d like to know where he is wrong.
@@baronmeduse Excellent ad hominem!!
@@soulfuzz368 Basic MMT is not that hard. It's a matter of logic for the most part. Mosler's simple maxim that government levies a tax liability then puts its currency out to be acquired to pay the tax, thus creating the monetary economy of that particular unit of account, hasn't been undermined by any of the people who keep coming forward to dispute it.
1:13:26 It was the government, with the Federal Reserve Act and other interventions, that further centralize financial institutions by permiting and compelling wall street to pile on leveraged positions with no risk of failure (too big to fail)
"for some reason, buisness don't want to hire and expand". Because the majority has no demand to buy Production. Duh.
Or it is because they aren’t producing enough to be able to demand?
@TheCanMan Can Since 1990 I was wrong.
To understand the MMT, you need to understand that Government IS NOT Household (or even Firm)
Epic878787 They think because it’s not a household that makes it sound and reasonable to just print more money. Just print away......
@@Epic878787 - Innovative production reduces human-labor & machine-labor cost
@@zygi22 - You misunderstood some basics. Very difficult for our ancestors to change their understanding from Ptolemy's earth-centered model of the real world to Copernicus's sun-centered model or the real world.
This understanding of a model of political economy which actually includes the tool of money is just as unbelievable.
GIMMS_Training_May_13_2019 tinyurl.com/tyn32g4 .
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Steve Keen Speaks at Minsky 100th tinyurl.com/s6n7f7w .
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Keep studying.
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Your world will turn upside down either, easily as for me, in the time it took for one sip of coffee, or it will be a very, very difficult paradigm shift.
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Get out your MONOPOLY board game and ask someone to join you in starting a game who is an accountant or who has completed a college Introduction to Generally Accepted Accounting Principles.
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Start your game of MONOPOLY using "T" Accounts
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You can call the notes in the rubber band the supply at "the Bureau of printing"
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Then record on the "T" accounts your moving of the notes
from the Bureau of printing
to the Central Bank
Take note of the Debit (RED) and Credit (BLACK)
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Then record on the "T" account your moving of money from the Central Bank to each Player
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Then look at all that money in player-circulation and take note of where it came from.
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Then add a rule to the game: Balanced Central Bank Rule : When all players have passed go, then collect all the money from the players in order to balance the statement of the central bank.
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Take note of the money safely balanced in the central bank and the poverty of each player who lacks all money.
@@zygi22 - A political economy needs enough money in circulation so that each person has a living wage
@@thomasd2444 "A political economy"? You mean centrally- planned economy?
Looking at this old thread, and the one-liners under +stefaobc's post, and after reading a hell of a lot, it's clear MMT is a misnomer, it is not a theory. Whoever came up with that name should be shot. MMT is a description of how the financial/banking system and fiat currency works. It is not up for debate. It would be like debating whether double entry book-keeping can truly keep track of credit and debit. What can be debated is policy. And that's where the Austrian school is as poor as Neoclassical and Keynsian economics, mainly because the policy derived from those philosophies is based on belief --- although each separate aspect of these old schools can be critiqued separately and some hold up while others are pure ideology. If you read Mosler's "Seven Deadly Innocent Frauds of Economic Policy" you will see some sensible policy based on MMT. Contrast Mosler with another Austrian school advocate like Walter Block, who is a complete joke, theorising all in a fantasy world of libertarian assumptions that can never be true in the real world. That's why philosophies are good: they allow theorising in a fabricated toy world, which is useful, but also why they are often fantasy.
So what do you propose?
The term "Modern Monetary Theory" was derived from a joke. Some journalist invented it from Wray's book Understanding Modern Money (1998). But Wray meant "modern money" as an inside joke from A Treatise on Money (1930), where Keynes says that the "modern" form of money as a nominal unit of account had been around for the past 3000 years since Babylon.
But also understand how the world "theory" is used in science. An hypothesis is an opinion, but a theory is evidence-based.
It's just a nickname that popped up on Bill Mitchell's early blog, and it stuck. Its better described as 'common sense'.
10 years after this debate it looks like US government embraced the idea of MMT wholeheartedly.
It was the only way to keep the market from completely crashing.
Let's see how long they can keep kicking the can down the road.
Does anyone find it disingenuous that Mosler started with a list of handouts?
If it's free, YOU are probably the product
Making a better country for people isn’t “handouts”, it’s what government is suppose to do.
@@timgwallis funny joke
His recommendation on political campaign funding reform wasn't bad though.
@Tim Wallis. "Redistribution of wealth" is NOT what governments are "supposed to do." Not even close. Socialist govts do that. Govts with mixed markets do that. It is not what govts are "supposed to do."
Enjoyed this a good bit. My fundamental problem with MMT is the same as Jacob (Yacob? sp?)'s raised at 1:21:50 , although I would say it a little more simply -- the printing of money (and similar operations) is a tax.
And the response from Mr. MMT that it's super necessary in order to not have too few units is feeling a little anemic right now -- who would bend down to pick up a penny? I know I can't be bothered. We do not have a problem with divisibility that requires more money printing.
Also, there are a ton of people in the "top comments" here that do not know how to use the reply button cause they're clearly replying to people. It makes me lose a little faith in youtube's ability to sort top comments.
You wrote that 3 months ago, do you still have that same problem with MMT or is it sorted?
Kudos to you for having enough of an open mind though to watch a debate on this.
BTW how on earth can currency exist if it cannot be created? How do you know what the right amount is?
I also don't understand exactly why you believe that a bit more or less currency in an economy, means that Businesses Owners or a Rent Seekers will therefore decide to raise or lower their own prices (the definition of Inflation & Deflation), and get away with it, bc of a lack of competition.
Now sure, why risk it at large levels? But MMT economists don't advocate that either.
To me, that seems to be a fear of the unknown or new or of freedom or what could be an exiting future where the economy serves society, instead of the Idolatry of the Society serving the Economy as a living God. Yet it isn't so unknown, Japan already tried it after the 90's, and Mainstream economic predictions turned out totally wrong, like usual.
Also, note that MMT economists advocate that the money supply be taken into consideration, rather than the Elite-Serving myth that "MMT means making a near infinite money supply".
@@pebblepod30 no, it didn't but thanks for the reply
a couple thoughts here --
"I also don't understand exactly why you believe that a bit more or less currency in an economy, means that Businesses Owners or a Rent Seekers will therefore decide to raise or lower their own prices (the definition of Inflation & Deflation), and get away with it, bc of a lack of competition."
because theres the same number of goods and services being chased by more dollars
"How do you know what the right amount is? "
not worth picking up a penny right now. weve got enough
"Also, note that MMT economists advocate that the money supply be taken into consideration, rather than the Elite-Serving myth that "MMT means making a near infinite money supply". "
i can imagine. i'm more concerned with what the US govt is actually doing and the effect it has on me
The printing of money is only a tax if it causes the value of your money to decrease faster than a desirable rate of inflation (2-3%). And it certainly doesn’t always do this. If there is “slack” in the economy (unused resources, labor, capital goods) then spending into the economy will increase production using those resources. When there are significant supply constraints (see the recent pandemic with lockdowns and supply chain issues) then spending money into the economy will raise prices but not production.
@@camerondye6108
i'd be interested in the money supply data, i do wonder what % of the money supply is actually being created annually, looking at all forms of creation. unfortunately, i don't have the economic knowledge to vet such data.
but i wouldn't say a small amount of printing is "not a tax" because it has desirable qualities. it's still a tax, you are instead making the argument its preventing deflation or some such, and it's *worth* it being a tax because it prevents other economic disaster. ok, mebe, in extreme moderation is my inclination to say.
and while i think the austrian response to the "slack" point would be to call it binging for a short-term fix at the expense of longterm trust in capital, the critique i would rather personally make is to say:
MMT theories were used (probably inappropriately, i grant) to justify spending alongside lockdowns when supply constraints were obvious. maybe the adherents should do a better job preventing politicians from twisting their theories.
tradingeconomics.com/commodity/eggs-us
its hard to look at this graph and the reality of the "lockdown and spend" policies and have any faith in government or MMT, although you will probably say (and with some truth, i'm sure) that that is projection/the central banks and the adjacent lockdown policies don't directly relate. but however intertwined, an austrian economic view would not have been so callous in the printing or the locking down.
i'm sorry -- this response prolly broadens rather than narrows the discussion and as i said you may have some legitimate claim that it does so unfairly. thank you in any case for the reply, it is interesting to see the MMT perspective and i can see why those claims are correct/reasonable, at least in some interpretation/scale.
@@nathanparker8555 No, the point is that if money printing is offset with increased productivity and isn’t causing significant inflation, it’s not a tax in any way shape or form because it’s not negatively affecting the value of your money.
There is no debate with fanatics. MMTs views on the origin of money are enough to disqualify it from the discipline of economics alone.
It's a mistake to debate as though two ideas are equal
I don't follow Warren's business card analogy.
@1:48:36 "im taxing you guys 25 cards and im only letting you earn 20"
Government doesn't impose more taxation than the aggregate income of the people, do they?
ScottyNapaa - Only in Mosler's mind does the tax exceed the income. But it's only a sample of what is totally wrong with MMT. What is unbelieveable is that more people don't see it as totally wrong.
You guys are dumb... Haha you've been brainwashed
Of course it happens. This is when the public sector is in surplus, and the private sector in deficit. It happens in austerity policies. You should look at it at sectoral level, over time, not personal.
Agreed with many of Moslers points - but there's not a theory of economics in here. People who think Mosler is 'right' are responding to tit for tat policy issues. If you think Murphy is wrong - you don't understand what he's saying or why. A 2 dimensional object travelling around an orange can't understand why it ends up back where it's started. All the best peeps
The Austrian mistake is in using a price clearing analogy to fix a bust. When prices & wages fall, debt-to-income ratios spike and debts become more difficult - if not impossible - to repay, as these are priced in nominal terms regardless of any changing real conditions. Professor Steve Keen shows how even if you have a gold standard, allowing a private banking system to create deposit money via loan creation almost always generates asset bubbles followed by a Great Depression/Financial Crisis event. Banks lend for the purchase of assets, while Keen has shown that asset prices rise as borrowing accelerates, so we end up with more and more borrowing as people try to chase gains in that market. (In other words, private, deposit-taking banks - not governments - spark and sustain asset bubbles via their lending practices, and by taking advantage of people's desire to benefit from a perceived price trend that the banks' own lending created.)
Private bank lending creates deposit money that enters into the real economy, creating extra demand in the economy until, soon enough, the serviceable debt limit is approached. Then borrowing slows down, asset prices fall and this causes net repayment - and reduction - of money, rather than borrowing and net money creation. Reducing the money supply drags down incomes, employment, and wages, & as Keynes noted decades ago - & Keen demonstrates so clearly with his models - one of the stable equilibrium of banking-based capitalism is zero income, zero employment, zero profit, and the banks end up owning everything. Debt-deflation, depression, & unemployment emerge out of a positive feedback loop that is created whenever the private bank-created money system moves into net repayment, regardless of whether gold is the reserve currency or dollars are. Eliminating private banks & bank-originated deposits entirely is the only way to produce a pure commodity money, if that is the goal.
I couldn't have said it any better. Thank you. The real government needs to take back control of the money supply.
@@PeterProf7777 Watch "hidden secrets of money" on yourube its ten episodes, it's free, and it really demystifies our economic structure
Adrian
The federal reserve sets and manipulates the interest rates though. If a bank is too overzealous with lending it becomes insolvent, so its self regulating. If anything, giving one authority the power to manipulate interest rates always leads to malinvestments which is what happened in 2008
@@roshansundar6618 That didn't always pan out in 2008 did it (I know a lot were bailed out)?
The critical part you're missing from this is the federal reserve enables this aggressive fractional reserve banking as when the banks are caught in a tough position of not having the available funds when people come asking for their money, the fed bails them out to prevent a bank run.
The very fact they can fall back on this allows them to be exceptionally risky with lending. If that weren't the case, banks would have to be far more careful with lending, if they were to utilize fractional reserve strategies at all.
So you're right that yes the banks initiate it with their lending, but you're not mentioning how the fed enables this practice.
1:16:13 "every country that goes into a war immediately suspends the gold standard. Now why would you do that if it was so good for the economy? Cause it's not."
Exactly the opposite: when a ruler of a country goes into war, he doesn't want the economy to work. A properly working economy would make it much harder for the ruler to waste resources on a war. A warring ruler needs the economy to stop working and instead he needs to be able to siphon resources from the economy for his warring effort. A working economy would try to defend itself from that.
All the allegedly "horrible" consequences of the gold standard were only horrible for the rulers who wished to abuse the economy and uneconomically waste resources on projects the economy didn't wish for. The gold standard was an excellent protection from such wasteful squandering.
You'd do that because you want to move production forward with debt. Cheating an otherwise stable system that limits both bubbles and bursts.
Oh, I like this thought. A ruler in war time needs the economy to be productive, but he needs to shut off the fair redistribution of earnings. I may take this idea.
Going off the gold standard frees the government to invest as much as it wants in military activity from just printing IOUs. Then, after the war, they couldn't reestablish the gold standard, because the people were in poverty and needed a bailout. At least this fits with what I know so far.
@@warrendriscoll350 well he primarily needs to shut off the economizing which is the main function of the economy: determining where the scarce resources are needed most urgently and allocating them accordingly. He needs to override this process and instead allocate the resources for his own purposes. Unfair earning (and savings, and property) redistribution is only a side effect of this.
@@warrendriscoll350 except War is a non-productive- losing venture. You basically pay to destroy and to pay, you have to steal from the future to afford it. Thus, Gold - handcuffs for criminals - are taken off so politicians can plunder.
@@rsixx6548 It needs to be productive in order to create things to throw in the garbage heap of the battlefield. Like tanks and aircraft. Otherwise you lose. The system sees no benefit from this production but it is production.
This explains what Government is, and the difference between the User and the Issuer of a Currency.
this is like living in the middle ages and saying "could you please give me an example of a state that didnt wield the power of the church?"
or on the eve of abolition saying: "could you please show me one nation that ever did away with slavery?"
or in 1919 saying "could you please show me the society where women were treated equally to men in the public sphere?"
just because there is mass irrationality doesn't mean the current ideology is correct or desirable.
Very interesting debate. At 1:02:06, I was surprised that Murphy even asked that question, because even I, someone who just started looking into the MMT stuff, knew that only the currency issuer could issue the money, not any Joe or company!
Their debate reminds me of the current partisanism in our government. Each insist on their way of doing things is the correct way, but each can be a difference of night and day. As counter-intuitive as the MMT seems, I am not yet written it off.
I wish the debate could be geared towards identifying a specific situation and ask each school to provide their view/cause and fix/prediction, under 7 min, with 2 min of rebuttal from the other side. Examples of situation:
1) Greek debt crisis of 2007.
2) Zimbabwe hyperinflation
3) Current 1.9 Trillion Government spending on infrastructure
That way, it cuts to the chase and then explain the philosophy behind. It's just a much better way for people to absorb.
Murphy knew that only the state can issue currency, he was simply showing the lunacy and the moral hazard of this system.
The MMT's fallacy is: economics is not a game.
MMTers point to an accounting practice and think it proves that putting ink on paper creates wealth.
I have read a ton of MMT stuff and have had that thought as well.
From an MMT perspective, that is correct. HOWEVER it is only correct for the Government, not for anyone else, individuals or firms. The Government can (and does) credit money to bank accounts, and thus inject money into the economy. Is it that difficult to understand?
It’s not. But a lot of time seems to be spent discussing it.
@@landcruiserfan4206 It depends what you mean by wealth and your opinion on the ability of government and the private sector to create it respectively. I think most people think of wealth directly as or as a proxy for, roughly, "number and/or priority of ends achieved/achievable" (money is valued for what it can buy, not wholly for its own sake.) Simply creating money just allows the receiver(s) to move this type of wealth to themselves at the expense of others; it can only create this wealth if it's invested in increasing the number and/or priority of achievable ends. The question is, "Are there investments that, when made by government, produce real (inflation adjusted insofar as it's new money being invested) wealth and which would not have been pursued (or which would have been pursued less efficiently) by the private sector?" I think the answer, as a rule, is no; entrepreneurs operating in a price and profit/loss system are better at spotting and exploiting these opportunities than government bureaucrats. An Austrian approach can still allow new (bank) money to pursue investments beyond savings if we allow free banking (no reserve requirements, immediate closure upon failure to redeem.) It's just that if any one bank creates too much too quickly, more of its notes will end up with the other banks than vice versa and it will lose reserves, risking closure.
1:11:25 the issue with the Austrian school is that they say: “I would do nothing”.
And people want politicians to do something, even if that doing could be the root of many problems and the next one.
Very interesting debate. Thanks for posting.
Mosler - hands down. The more I'm hearing about MMT, the more sense it makes. It demystifies a lot of what's going on. And - a big plus - it uses real world events illustratively rather than ridiculous thought experiments, where independent agents 'freely enter into labor contracts', rather than people working to keep from starving. It says look, we're no longer on a gold standard, so let's stop pretending we are.
Watch "hidden secrets of money" on yourube its ten episodes, it's free, and it really demystifies our economic structure
I m working to keep myself and others from starving, why am I not a free agent ? I decided to work here. Yes we are no longer on a gold standard but why shouldn't we?
@@transon6655 The answer to your first question is in the question: 'I decided to work here... to keep myself and others from starving'
So, rent your labor to someone else or starve? Where's the 'free' choice? The person who wakes up each day and chooses to work because they want to, rather than because they have to - or starve. That's the free agent. Wealthy people make that choice each and every day.
“It is the impossibility of living by any other means that compels our farm labourers to till the soil whose fruits they will not eat... These men, it is said, have no master - they have one, and the most terrible, the most imperious of masters, that is need. It is this that reduces them to the most cruel dependence” -- Simon Linguet, 1767
The 'Gold Standard' limits a sovereign govt's ability to spend. This is how you wind up with a mountain of work needing to be done; a mountain of people who want to work; with a mountain of natural resources, yet nothing happens. Why? Because - under a Gold Standard - our gold reserves artificially limit the amount we can spend. That's insane. We need new infrastructure. We have plenty of unemployed labor and natural resources, but we can't put it all together because, 'How we gonna pay for it?' That's an insane situation and a BS question. We have a 'printing press' or rather computers at Treasury. We just pay for the goddamn thing.
Yesterday $1,200 was added to my account. How did it get there? Did the govt have to break open a piggy bank to get some gold bars? No. Someone at Treasury - by order of Congress - pushed a button and voila, $1,200 was added to my (and millions of others) bank balance. No Gold Standard in sight. No one saying 'you can't do this because your gold reserves are too low' This is how the real world operates. When Congress decides to pay for something, they just 'do the damn thing' [period]. The rest is BS.
jones1351 I have a lot of choices starve is just one of them. A lot of entrepreneur give me a lot of other choices ( Jobs) or I can even opene my own buisness. Or i can even isolate myself and live by myself in the jungle if i hate peoples as much as you do.
Yes, I never said they can't spend. The problem I see is when they spend they will automaticaly reduce private spending. Increase in money supply is basicly a tax on savings in dollars. And you could argue that government spending is better than private spending, BUT let look at our real world. When we had Obama as president then republicans didn't want him to spend their money and when Trump in Office Democrats don't want him to spend their money. So now you will always have 50% of people who disagree with the way government spend their money. So the way I see is, it is best to just let private people spend for themself so we can reflect 100% how the people want to spend their money.
@@transon6655 One: ‘I have a lot of choices A lot of entrepreneur give me a lot of other choices ( Jobs)’
“It is want that compels them to go down on their knees to the rich man in order to get from him permission to enrich him” - Linguet
Or Two: ‘or I can even opene my own buisness.’
Data from the Bureau of Labor Statistics shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
Or Three: I can go live in the woods? Nah.
Or Four: I can starve.
Still not seeing a whole lot of freedom of choice.
‘The problem I see is when they spend they will automaticaly reduce private spending.’
And… well remind me, how much private spending on infrastructure is the govt crowding out? How many private investors are building roads, bridges, schools, hospitals, or power grids that get us off fossil fuels, etc.?
70% + of Americans want govt to spend the money on Medicare for All, and education et al., instead of expensive and illegal wars. Yet both Reps and Dems in congress ignore the people and spend it on wars anyway. Even though M4A is a hell of a lot cheaper and will do much better than bombing poor people into oblivion and jacking up the list of folks who’ll hate us. So, govt spending isn't the problem. It's what they're spending it on. But, more important, the fact that they ignore the people when making those decisions. Worst of all is, none of these clowns rode into DC on tanks. We put them there,and then let them get away with ignoring us. But, back to the point, freedom. No. We are not free, informed and engaged citizens of functioning democracy. We're more like obedient subjects of a plutocracy, managed by a corrupt, and entrenched two party political system - who get to pull the lever every 2 years for candidates the plutocrats offer us as 'choices'.
Before this I was somewhat a fan of the Austrian school and Bob Murphy. After this I've got to reevaluate, Murphy not a strong debater.. too slow to make his points
Phil Paquette
The debaters both went in different directions. Bob Murphy was ok imo, but neither really addressed the other
30:30 the digital transit cards make the point far more clearly. -jc