The government can never run out of money.

Government cannot "run out of money", but that money can run out of value.

 

Lmao, you think inflation/deflation is a new phenomenon? Good Lord

 

Err, I think you need to think about what you've just said. Sure, people need to use more dollars to pay for the same thing they could get 50 years ago, but think about it, are we all really working longer hours to buy bread? Of course not. Bread and other goods may have been dirt cheap in the 1910's compared to today, but how much money was in circulation? How much did people have to work to buy food?

 

Then turn your currency into what ever will buy the ounce of gold. But you need to be early.

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That is why you now see the USA in some sort of perpetual war.

 

Is this how you respond to factual statements?

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That just proves my point. Greece isn't a currency issuer.

 

Money, fiat type, is all about confidence.
If no one has confidence in a currency, it is worthless as a medium of exchange.
But as one said, some money can become a collectors item.

 

The weimar, which I've already addressed, had a serious supply problem and had to pay debts.

 

Already pointed that out to him. But I don't think it was comprehended.

 

Please explain what examples you're referring to. All instances of hyperinflation are anomalies and linked to supply contractions.

 

Yeah but we're spending less and less on the military, which actually builds things and gives people jobs as a percent of budget and more and more on failed attempts to alleviate poverty that produce nothing and create destruction and chaos.

 

First of all, I can't take anyone seriously who quotes zero hedge.
Venezuela is suffering hyperinflation because, as the article points out, they lack supply to meet demand. Even if they didn't continue to issue currency, they'd still be (*)(*)(*)(*)ed.

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I am very surprised to find someone who is aware of MMT.
I also love that you understand that events of hyperinflation are unique and related to supply/external debt. I've sent you a friend request.

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What makes you think interest rates will rise? Who do you think sets the interest rate?
"Overnight hyperinflation" really? This is nonsense.
The government doesn't even need to rely on people getting securities, we could do away with that completely with a couple of changes.

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Why should the government restrict spending when private sector debt is increasing?

 

We can build anything we want. It doesn't have to be tanks and bombs.
Gov't spending is gov't spending. And yes, you need to protect your currency.

 

Where do you think "money" comes from? Government deficit spending or bank loans.

 

"I'm an idiot who wants to scare people, people!" - Stefan

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A surplus is simply a drain of dollars from the private sector, and it's pointless for a sovereign currency issuer to "save" anything. Federal taxes destroy dollars.

 

Poor countries tend to have a lack of resources and a whole host of problems.

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The federal reserve is a part of the government.

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It does? Since when?

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That'll never happen when the government taxes.

 

Exactly. Money supply exceeds their supply of goods and services. Increasing money supply is not helping with their real problem, an inadequate supply of goods and services.

 

If we can't run a surplus for an extended period of time, should we be running deficits for extended periods of time?

 

Yes. A government deficit is simply a way to add net financial assets to the private sector and cut down on private sector debt.

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So the money supply itself isn't the cause of inflation, since they're screwed either way. That's my point.

 

I am not an economist either and I am with you not understanding money, despite thinking a whole lot about it. I would posit, though, that most economists don't understand it either.

Here is my, unorthodox view:

Money is just a catalyst for entropy production, in a similar way enzymes catalyze entropy production in a living organism.

If the organism wants to grow, it needs to make more enzymes. In a similar way, a growing economy needs to expand its money supply, which is why we got off the gold standard -- it was restricting economic growth.

Just like enzymes, money is constantly created and destroyed (loans payed back etc.). The average life of a dollar bill is five years. That means that money needs to be printed constantly to make up for the destroyed money, preventing stagnation or even deflation, the Fed's nightmare.

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I am aware of MMT and have looked into it, although not to a great deal. Can you expand on your statement that taxes destroy dollars?

 

I am not saying we should run deficits all the time, but that's what realistically our two party system has created. I don't believe that any politician will actually ever be successful in being "fiscally responsible", and maybe they shouldn't be.

 

The post WWII recession was simply a function of massive cuts in Govt spending and millions ending military service. The same thing happened at the end of WWI. It wasn't due to any structural breakdown in the economy.

Taxes were never cut when Kennedy was president. Under Johnson, the top tax rate was cut from 91% to 70%. Capital gains tax rates were never cut under either president.

You should get your facts straight if you're going to try to support your argument with empirical evidence. My suggestion would be to consider sources other than the RW propaganda media you're plugged into.

 

How does government deficit spending create money?

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How is a surplus a drain of dollars from the private sector?

If a deficit and surplus created or eliminated money, we'd have had deflation in the late 90s and very high inflation in the early '10s.

 

As long as the size of the deficit is smaller than the net increase in the size of the economy (i.e. the debt is not growing relative to the size of the economy) a deficit doesn't result in long terms financial strain.