Space Exploration News

From the article:

"Palley does not agree with MMT saying that standard Keynesian analysis does not fully capture the accounting identities and financial restraints on a government that can issue its own money.'

Total confusion; MMT is not Keynes.

In fact the constraints on currency-issuing governments are resource-related, not financial.

"Paley said that these insights are well captured by standard Keynesian stock-flow consistent IS-LM models, and have been well understood by Keynesian economists for decades."

Again MMT is not Keynes.... either of the 'Keynesian', or post- or neo-Keynesian variety.

"MMT "assumes away the problem of fiscal–monetary conflict"– that is, that the governmental body that creates the spending budget (e.g. the legislature) may refuse to cooperate with the governmental body that controls the money supply, e.g., the Central Bank" .

In MMT, the electorate gets to choose how a nation's resources are developed and deployed (ie by an electorate informed re the available options), not the central bank.

 

I think it sufficeth to say that the models don't work at the outer edges of the normal curve .. so while we can predict small changes .. influence interest rates on our debt a short term basis by messing with the invisible hand -- by "short term" we are talking at least 15 years .. since the 2008 crash but we were messing before that .. just not as hard.. dat a good demarkation line in any case cause that crack didn't go away .. that Debt elephant in the room .. and when the invisible hand would strike back .. not that good a prophet I am .. mind you I came fairly close ..

Now the toll bell rings .. the Piper has come .. been hearing those pipes or yonder mountain - but now the Piper has entered the city .. and he wants his pound of flesh.

Have you checked interest rates lately .. on our debt ? Ave was 7% in 2000 .. when we had the last debt crisis interest on the debt was over 25% of revenue .. hit 30% and alarm bells go off at the IMF .. ship taking in water faster than can be bailed out .. will sink if something not done soon..

Now we sit at 30 Trillion .. but ave interest is just 2% .. so we pay 600 Billion/year in interest payments. If that goes up by 1% we pay 900 .. if by 2% 1.2 Trillion .. which on 3.6 Trillion in revenue is .. 33% ding .. ding.. ding.

Thats why Clinton and the Red Team acted .. "cutting spending" god forbid .. and raising taxes.. wasn't cause they wanted to .. was cause they had to .. Serious business when interest on your debt eats into a significant portion of your income .. no complex formula needed .. your broke.

 

That's an autocracy, which is like a dictatorship spread around a bit. There's no opposition to attack corruption.

 

Krugman on MMT:

"Let’s have a more or less concrete example. Suppose that at some future date — a date at which private demand for funds has revived, so that there are lending opportunities — the US government has committed itself to spending equal to 27 percent of GDP, while the tax laws only lead to 17 percent of GDP in revenues. And consider what happens in that case under two scenarios. In the first, investors believe that the government will eventually raise revenue and/or cut spending, and are willing to lend enough to cover the deficit. In the second, for whatever reason, investors refuse to buy US bonds.

The second case poses no problem, say the MMTers, or at least no worse problem than the first: the US government can simply issue money, crediting it to banks, to pay its bills.

But what happens next?

We’re assuming that there are lending opportunities out there, so the banks won’t leave their newly acquired reserves sitting idle; they’ll convert them into currency, which they lend to individuals. So the government indeed ends up financing itself by printing money, getting the private sector to accept pieces of green paper in return for goods and services. And I think the MMTers agree that this would lead to inflation; I’m not clear on whether they realize that a deficit financed by money issue is more inflationary than a deficit financed by bond issue.

For it is. And in my hypothetical example, it would be quite likely that the money-financed deficit would lead to hyperinflation.

The point is that there are limits to the amount of real resources that you can extract through seigniorage."

https://krugman.blogs.nytimes.com/2011/08/15/mmt-again/?searchResultPosition=1

 

We're nowhere near ready for Mars.

The Moon has a ton of huge tunnels we could take advantage of.

My idea for L5 is 10-20 feet of rock, and a layer of lead, then part of the station will have a few feet of water. I'm hoping we could generate a field for additional protection. Yeah, it would be huge, which should also cut down on the coriolis.

We won't build it until we're sending robotic mining ships to the belt. Which might happen in the next century.

 

That's all dependent on the money-as-debt delusion.

So long as the resources are available, currency-issuing governments don't need to borrow in the first place. And interest rates should be set at zero, ie private bankers should be mere salaried loan providers for the private sector, not interest-enforcers (usurers) on loans.

Innocent Frauds - Mosler Economics / Modern Monetary Theory

'The 7 Deadly Innocent Frauds of Monetary Policy'.

 

Weird, why must Krugman consider some hypothetical possibilities at some future date? MMT assumes government knows the productive capacity of the nation, and is not dependent on investors inclinations.

The US government can issue money to pay its bills provided it's spending has remained within the limits of the economy's capacity to produce goods and services. Spot the difference?

A deficit financed by free ie non-interest bearing (government money issuance is not inflationary, if the total of public AND private spending is kept within the limits of the economy's potential productive capacity. Moreover, currency-issuing governments don't NEED to issue bonds.

Krugman is arguing within his own neo-Keynesian parameters, nothing to do with MMT.

Krugman, as noted above, is assuming free market economic orthodoxy. The seigniorage comment is irrelevant, and the hyper inflatiin comment absurd; inflation is always related to resource availability, so understanding and identifying the cause of an inflationary episode (as at present) is vital.

MMT inserts itself into the free market to eliminate the business cycle via price stability via an employment buffer pool (aka Job Guarantee) as opposed to via the orthodox NAIRU unemployment buffer pool (to control inflation).

Innocent Frauds - Mosler Economics / Modern Monetary Theory

'7 Deadly Innocent Frauds of Economic Policy'.

 

Krugman thinks MMT could ruin a countrys currency, I agree.

MMT isn't mainstream, never will be.

 

Its your delusion that money is not debt "As long as currency issuing Govts dont need to borrow in the first place"

What kind of circular nonsense is this -- of course if you don't borrow you won't have a problem with interest ?

In case you hadn't noticed -- the conversation is about nations that have borrowed - and the problem of rising interest rates .. so in this paradigm .. your scenario does not exist - and your comment completely irrelevant and inapplicable.

 

If you want something, feel free to ask.

 

I could not agree more.

 

I agree that an L5 base would require something like that.

I've heard that the Moon has tunnels. But, there would still be construction required if anyone planned to stay there. There would have to be pathways that can carry loads, landing pads, etc.

I think here would also have to be airlocks and work done to prevent the loss of the station's atmosphere, as I don't believe it will work to require people to wear space suits 24/7.

My understanding is that if a rocket were launched from the lunar surface the regolith blown up by the rocket would actually achieve lunar orbit. Also, regolith is incredibly hard on everything it touches. The Apollo astronauts barely got off the Moon before their space suites wore out. The new space suits of today are not made to fit each individual comfortably. Instead, they are made to be easy to manufacture, possibly on the Moon.

In the end, it looks to me like there will have to be substantial work that is not inside tunnels in order just to make the tunnels habitable. And, I haven't seen any proposals for that. Are we going to land a backhoe?

>I think this is a really cool topic worthy of a lot of discussion.

One of the first steps seems to be making sure we have a well defined mission.

So far, I think the mission is no more than landing some humans on the Moon for fame and glory. We say it's also for Mars. But, Mars is very different in just about every dimension. And, again we should know why we're landing humans on Mars - rather than simply assuming that is such an important goal that we need to land humans on the Moon.

In my view, we should be choosing science missions. That doesn't require humans. And, humans in space is stupendously expensive.

So, I'm open to any discussion and cool ideas on any of this, of course. I'd love to be proved wrong.

 

See...a common problem, you didn't even comprehend what I wrote, because you are viewing what I wrote through your preconceived orthodox economic views.

What I actually wrote was : "So long as the resources are available, currency-issuing governments don't need to borrow in the first place".

You missed out the vital phrase, "(as long as) the resources are available".

Ask yourself, why did you do that?

And as to the first point re money as debt, which is our current system derived from money lenders in the middle ages who discovered they could charge interest on loans, at a time when government services were non-existent.

News flash: currency-issuing governments with their own treasury and central bank can create money 'ex nihilo' without paying interest on the government's own money, hence the concept of debt-free money, in contrast to interest-bearing money lent by private bankers.

IOW, spending by currency-issuing governments is constrained by available resources, NOT money or debt (unlike spending by you and me which IS constrained by money or debt).

Sri Lanka is said to be "going broke" because it "has run out of foreign exchange".

What has actually happened is it has been unable to balance imports and exports, because the world lacks a monetary 'balancing mechanism' to allow all nations to develop with the resources they have. (Keynes was aware of this problem when he proposed a 'clearing union' in 1944, as part of a new post-war global financial system, rejected by the US).

 

Modern Monetary Theory: The Right Compass foDecisionMaking Intereconomics

"Since many central banks already educate the public about the creation of modern money through bank lending, it would be most welcome if they would do the same for the creation of modern money through government spending. Here, MMT and central bankers can find common ground to move forward and leave the theory of loanable funds and that of the money multiplier behind.*

You are all, including Krugman, unable to comprehend the concept of debt-free money issuance by currency-issuing governments. Further more, interest rates should always be zero...as they very nearly have been during the GFC and Covid disasters; in fact, negative(!) in some EU countries.

 

Its your delusion that money is not debt "As long as currency issuing Govts dont need to borrow in the first place"

What kind of circular nonsense is this -- of course if you don't borrow you won't have a problem with interest ?

 

Again, that's not what I wrote, though I admit my original wording was poor.

I should have simply written: currency-issuing governments don't need to borrow in the first place. Hence we can say (correctly)

1. Money is not debt when the money is issued by a currency-issuing government.

2. The reality is spending by currency-issuing governments is constrained by available resources, NOT money or debt (unlike spending by you and me which IS constrained by money or debt).

Got it? Note: from the link in #289:

"Since many central banks already educate the public about the creation of modern money through bank lending, it would be most welcome if they would do the same for the creation of modern money through government spending. Here, MMT and central bankers can find common ground to move forward and leave the theory of loanable funds and that of the money multiplier behind."

Clarified above.

And whether private banks should even be allowed to charge interest is another point.

 

Finally, proof positive that MTG was right!
Those Jewish people are so tricky! I think they're going to start a big fire with this one!
https://www.cnn.com/2022/04/15/world/space-laser-megamaser-scn/index.html

 

Good correction/clarification .. but your claim is still flawed .. You can not print unlimited amounts of money - and just give it away - cept if you are the world reserve currency .. and even that has limits. Eventually the value of your currency will start to erode ..and inflation kicks in .. until you end up like Zimbabwe.

When The gov't prints money -- and goes out and spends that money -- that is borrowing. irrespective of available resources.

If a Gov't is earning more than it spends.. which is what you are trying to say by "available resources" .. then of course it does not have to borrow .. but few Gov'ts earn more than they spend .. very few indeed .. and so most all borrow.

 

Here is something of interest for you all:
Mars rover rumbles by crashed artifacts in the Martian desert (msn.com)
NASA's Perseverance rover is on a mission to sleuth out past evidence of life on Mars. Along the way, it found evidence of Earthlings.

This week, the space agency posted an image of two objects the rover passed while traversing the Martian desert: a discarded parachute and a metal capsule. Both played vital roles in helping the car-sized exploration rover land safely on Mars.

"Definitely wouldn’t be where I am without them!" NASA tweeted from the Perseverance rover's Twitter account.

You can spot the objects in the middle of the image. On left is the collapsed orange and white parachute; on right is a conspicuous part of the shell that housed the rover as it plunged through Mars' atmosphere in February 2021.

• Object crashed into Mars and created this new impact crater
• The mega-comet hurtling through our solar system is 85, yes 85, miles wide
• The space race forged immortal rock and roll guitars

Landing the 2,260-pound, $2.7 billion rover on Mars was an impressive feat, dubbed the "seven minutes of terror." The plummeting spacecraft, traveling at some 1,000 mph, deployed a supersonic parachute to slow down. It ditched its heavy heat shield. Before choosing a safe landing spot (free of boulders, pits, or dangerous rocks), it abandoned the parachute; then a rocket-powered apparatus fired up and hovered in the air while carefully lowering the rover down to the ground. Everything must work swimmingly — and it did.

The rover is now on its way to a dried-up delta in Mars' Jezero Crater, a place planetary scientists believe once hosted a lake.

"This delta is one of the best locations on Mars for the rover to look for signs of past microscopic life," NASA said.
This will be something the kids at school will want to take an interest in. Take the kids to the nearest planetarium and they can discover the worlds beyond their universe.

 

Here's your Martian desert. It might look like Arizona or Nevada 1,000 years ago

 

This makes NO sense AT ALL.

If they educate on anything at all, it is going to be about how our current system works.

Suggesting they should teach one of the NUMEROUS other systems is just plain STUPID.

 

Thank you.

Apparently this is the difficult bit to understand; I have never said that, yet here you are claiming I said it. What I said is:

2. The reality is spending by currency-issuing governments is constrained by available resources, NOT money or debt (unlike spending by you and me which IS constrained by money or debt).

I suspect failure to understand the words in blue is the source of your confusion; currency-issuing government - ISSUERS of the currency - can issue unlimited money (without taxing or borrowing) .....in theory, ignoring the resource constraint, ie the necessary resources which must exist before the government can spend money); whereas private citizens - USERS of the currency - cannot, they have to earn or borrow money before they can spend money.

Note the underlined, namely: "constrained by available resources, NOT money or debt", which is NOT the same as saying you can "print unlimited amounts of money - and just give it away -".

In fact the world needs an MMT-literate IMF, but that does not change the reality available to national currency-issuing government. As for Zimbabwe, (hyper) inflation is always related to resource constraints, whether supply-blockage-based facing the whole world at present (due to covid and war); or supply collapse as in Zimbabwe when white farmers were kicked off their farms, which were handed over to black tenants who had no idea how to farm, hence collapse in food supplies leading to price rises, for which government tried to compensate by printing money.

No it's not, as explained above.

No, that is NOT what I am trying to say, as explained above; currency-issuing governments don't NEED to earn money (by taxing or borrowing) ..... unlike you and me.

Note: for the private sector (domestic and external) to net save, the public sector must be in deficit, ie government taxes must less be than government spending

All explained in Stephanie Kelton's 'The Deficit Myth'.

 

As the author of the article points out, central banker are already "educating the public about the creation of modern money through bank lending" , ie, that private banks create money 'ex nihilo' when they write loans for credit-worthy customers.

The next step - to overcome the terrible status quo, eg, the economy is churning out billionaires while the public sector is broke, entire nations are seeking bailouts from the IMF, and governments can't fix public infrastructure or fund aged care - is for central bankers to "do the same for the creation of modern money through government spending". ie creating the money 'ex nihilo (without taxing or borrowing) when the resources on which government can spend the money are available.

On the contrary, when the global economy threatens to collapse under the burden of climate change, pandemics, soaring inequality alongside entrenched poverty, and government bankruptcies, MMT will be seen as the sensible solution.

 

Unfortunately it is you .. who is confused - and do not understand what the words you use mean .. nor the words of others .. and yes you did say .. A) "You can print unlimited amounts of money - and just give it away" - you just don't realize it - and was not talking about spending by you and me - yet another example of your confusion.

as was explained to you in the previous post .. "available resources" is not a constraint that has any bearing .. for the reasons explained to you ..

B)

A = B

 

Gosh you are proving to be a difficult student. Let's try again.

A = ISSUERS of the currency - can issue unlimited money (without taxing or borrowing) .....in theory, ignoring the resource constraint, ie the necessary resources which must exist before the government can spend money);

or to rephrase: ISSUERS of the currency - can issue money (without taxing or borrowing), limited ONLY by the resources available for purchase in that currency.

This means that if resources available for purchase by the currency -issuer, doubled (in a period), the government could double the amount of money it can issue, to purchase those additional resources. That is what I mean by unlimited; and why I used the words "unlimited ....in theory" in combination, but that went over your head.

"Resources available for purchase" are the KEY constraint, that is the reality you have yet to comprehend.

Your "explanation, namely: " When The gov't prints money -- and goes out and spends that money -- that is borrowing. irrespective of available resources." ....is merely flat-earth orthodox economics based on the obsolete money as debt system.

How hard is that to understand. Maybe this will help:

The beaver wants to build a dam. The beaver collects all the materials he needs from the river bank and its environs. He doesn't need to go the 'River Bank Incorporated', to borrow the funds to build the dam. The currency issuing government is in the same position as the beaver; it doesn't need to borrow the funds to build a dam, if the resources are available.

Wrong. If the resources, labour and know how, to repair a bridge are available, the currency-issuing government can purchase those resources with government money created ex nihilo, which is how private banksters create money when they write loans for credit worthy customers.