Modern Monetary Theory

Sat, Mar 23, 2019 2:36 PM

https://www.bloomberg.com/news/features/2019-03-21/modern-monetary-theory-beginner-s-guide

So this is the new darling of AOC and the left, because it's how they are going to pay for all their free shit.  Basically just print money.  It's a fringe theory, and not one promoted by anyone with much pedigree or accomplishment.

There's a lot described in this article that are theoretical assumptions that are simply false.  Like businesses only make investment decisions on growth prospects - no, most use some form of IRR/NPV, of which interest rates are a fundamental factor.

Here's the part that's alarming (and, I'd point out, blaming inflation on excessive pricing power of businesses is also wrong): "The more actively we regulate big business for public purpose, the tighter the full employment we can achieve,”   In other words - burying the lede - this is communism repackaged as a "cutting edge" economic theory.

  • Sat, Mar 23, 2019 4:23 PM

    If Bernie and AOC are for it, and Buffet is against it, it’s pretty obvious it’s fucking garbage. 

    Sat, Mar 23, 2019 5:11 PM
    posted by iclfan2

    If Bernie and AOC are for it, and Buffet is against it, it’s pretty obvious it’s fucking garbage. 

    It was less than 40 years ago that the US had @ 13-14% inflation.  And that's before Reagan started us down the path of deficit spending.  Now these idiots probably think correlation is causation, but I think it's simply been offset by globalization, which is a strong deflationary force.  But that isn't going to last forever.

    Funniest part of that theory is the idiotic belief that the invisible hand of govt is going to create and manage all these self-correcting mechanisms in the economy.

    Sun, Mar 24, 2019 1:15 AM

    I was an MMTer before it was cool but we're going mainstream now - big steps from selling our POV in obscure blogs and internet forums. Trump's $200 billion budget deficit in a month w/ interest rates still near historic lows (since interest rates are really a function of policy choice) and inflation is still below the Fed's target. 

    Indeed the GOP has functionally been budgeting from an MMT framework for 40 years - almost half a century, The political people just know how to sell it in Conservative window dressing I.e "Tax cuts pay for themselves" 

     

    Tue, Mar 26, 2019 2:50 PM

    House Budget Committee Chairman John Yarmuth (D) Kentucky on MMT:

    "Sounds like there's a lot of validity to it"

    Making progress but still a lot of work to do. 

    Thu, Apr 25, 2019 1:05 AM
    posted by gut

    LOL....I clicked on the link and my internet broke.

    No one, much less myself, responds to your economic diarrhea.  I mean, you ARE the definition of a useful idiot.  You'd embrass even Krugman.

    Indeed - even as the Trump fiscal policy proves me right and proves you wrong. It is no accident that MMT is catching on in the mainstream.

    But alas "A man convinced against his will is of the same opinion still." 

    FYI, MMT can allow for small gov't too. That's why guys like Krugman have been critical. They know it's the Pandora's box to liberating us from the income tax and boy, oh boy are they worried they can't make the case for soaking the rich if people find out Uncle Sam doesn't need their money. 

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