The Economy can't keep on growing forever

Taking the definition of MMT you presented:
"MMT advocates argue that the government should use fiscal policy to achieve full employment, creating new money to fund government purchases".

Here is a more accurate definition of MMT:

<<MMT states that the spending of a government which is the sole issuer of its own currency is limited only by the real resources including labour that are available for purchase by that government.>>

In any case,, here is the next sentence following the one you derived from the Wiki article, re MMT:

"The primary risk once the economy reaches full employment is inflation, which can be addressed by raising taxes and issuing bonds, to remove excess money from the system".

In other words, the government doesn't need to raise taxes in order to spend; rather, taxation is a tool by which inflationary pressures can be managed.

So in light of current comment such as that in the Guardian, you will need to study MMT more closely, before dismissing it.

You said:

Depends on how and to what purpose that "new money" is exercised; and if that spending results in full employment with above-poverty minimum wages at stable prices, then the debt can be periodically written off, since the debt is owed to the currency issuer (government) itself!

Well and good, but neoliberalism will never create full employment without inflation, and they even tell us why, namely : the Phillips curve and NAIRU etc etc. (and other assorted dogmas)
Not to mention that cleaners are also a necessity in an economy and they don't require tertiary degrees.

Anyway, here is your study material, to get you started:

https://www.themacrotourist.com/posts/2019/01/23/mmt/

 

Balderdash and you should know better.

A country that borrows on international money-markets has as much funding as it wants and can support in debt-repayments. And Uncle Sam is up to his neck indebted!

Americans are lucky to have the means to make payments on their debt. But, they are paying actually a steep-price! Because income-taxes have a dual-nature, and not just to pay debt.

The other nature is Discretionary Spending, where the present "discretion" (of Donald Dork in the BlackHouse) is to spend 64% of it on the DoD. At a moment in time when there is no war and no country menacing the US!

Far more important to America's future is the fact that the world is undergoing Age Change. When such rare alterations happen economic variables become chaotic. We exited the Agricultural Age in the latter half of the 19th Century - which emptied the countryside as people went to seek work in manufacturing plants in large cities*. We are now exiting the follow-on Industrial Age.

Meaning what? Meaning that the US is VERY LARGELY unprepared for the change of ages. And whyzzat?

Because it has an aging workforce that does not have the New Talents that are necessary and ONLY OBTAINED in Tertiary-education programs. Which are costly in the US - meaning that most of any high-school graduating class do not continue on to the necessary post-secondary level of education!

From the BLS here:

Which is goodness - but not nearly enough goodness. We must make a post-secondary degree free, gratis and for nothing. Or as low cost as humanly possible - which both Bernie and Hillary had promised! But an anachronism of the American democracy (called an Electoral College) did not permit.

As they say back in the old-country: "... and the white-horse you rode in upon."

I have neither time nor patience for blowhards ...

*And what has happened to those "plants in large cities"? Gonzo! Why? Because the Information Age is a services-based economy!

.

 

That definition was my own, so I have gone to Prof. Bill Michell's blog to get his view; he is one of the originators of MMT, back in the 1990's)

bilbo.economicoutlook.net/blog/?p=17889

<<a currency issuing government is not financially constrained and can maintain integrity of the financial system and purchase any goods and services that are available for sale in its own currency any time that it chooses.>>

Now I have no doubt whatsoever that Bill (who has a Doctorate in Economics) would demolish any macro neoliberal story of your own concoction, in 50 secs. flat.

So this comment of yours re my definition of MMT, - ie <<Balderdash and you should know better>>.-

I feel confident to dismiss as little more than an ignorant ad hominem.

Confirmed by your final sentence: "I have neither time nor patience for blowhards …"

OK, but lay off the abuse, and expect those who are prepared to take the time and effort to expose the reasons for neoliberalism's patent.failures, and present plausible alternatives, to do so.

Meanwhile I hope you are staying clear of those riots in France - a product of the disastrous consequences of Neoliberalism on the people of France.

​

 

You are correct, MMT will never work. That is a dream by those to young to understand the BIG plan. What we need is to do a debt Jubilee and go back to 1980 regs, and tax base. Problem fixed. But that would tax those that run the system, thus, wont happen and the voices going on here will continue for years to come

 

I agree with most of what you say here.

The reason why the DoD occupies 64% of Discretionary Spending is because those supplying the DoD fund the PotUS-in-place. Even with Obama, DoD funding represented half of the Discretionary Budget!

It's time for a mindset-reset (excuse the double elocution). Do we want a PotUS who rewards those who funded his election, or one who is thinking beyond that particular pork-barrel?

THAT is the question before the American public. And, frankly, I don't think sentiments will change. We Yanks are content with any PotUS who governs whilst the economy is expanding, and for some silly reason we they THEY

 

Is that all you've got for a rebuttal?

Because you are fully ignorant of the French economic-history situation ...

 

Never got around to finishing that thought process because the REEDIT TIME is to small in this forum!!!

What I meant to say is this:
We Yanks are content with any PotUS who governs whilst the economy is expanding, and for some silly reason we curse the President when it isn't. That's silly! But why!

Because the PotUS does not really drive economic expansion or contraction. WE DO! By means of our Consumption.

The economy depends very largely (if not wholly) upon Consumers. If we do not consume, companies to not produce. If companies do not produce because there is insufficient Demand for their products, they reduce Supplies. (That is the heartbeat of a Supply/Demand economy!)

And yes: If banks raise the cost of money (credit costs), then the available of funds also has a tremendous impact upon Consumption.

 

That doesn't have to be the case. It's not inevitable, or necessarily desirable.

Yes, I'd agree that to a great extent we've already moved into the "Information Age". This was 25 years ago.
However, I think in terms of economic effects, relative to the size of the total economy, it's been overblown. It's only the most visible aspect of the economy, not necessarily the part that comprises the most weight.

 

I know France has suffered decade-long 10% unemployment, under your neoliberal orthodoxy. Not to mention disastrous under-employment in the entire EU (youth unemployment in Spain still 20%?). Don't even look at Greece. Unsustainable debt in zero growth Italy. Brexit or no Brexit, who cares, either way the British working class is being screwed by Neoliberal orthodoxy. Low wages for many Germans, and current anger over high rents. 40 million in poverty in the US - with Trump currently trying to export that poverty to China, via his trade tariffs…

Does any of that meet your requirements for a rebuttal?

 

Prof. Bill Mitchell has full knowledge of the history of macro economic development, so not a dream. A Debt Jubilee?
Quite so, and MMT proposes the mechanics of how to achieve same, for the benefit of all. (Meanwhile Trump himself is pretty good at ignoring debt, with his tax cuts and DoD spending increases...)

So rather than writing-off MMT as a dream (wrong) by those too young to understand the BIG picture (again wrong: MMT exposes real macro economic processes in history up to the present time, and the consequences of the current neoliberal orthodoxy burdening the globe), you can learn the facts here:

http://bilbo.economicoutlook.net/blog/

btw, Stephanie Kelton is waiting for a rebuttal by Krugman of points she has raised in relation to his criticism of MMT, so the debate has a long way to go.

 

And what you don't evidently know is that five of those "past years" was under the presidency of the Last Socialist executive!

Which is why France is so late in its exit from high-unemployment ... !

 

No rebuttal is necessary to dimwits who do not understand that their explanations have no bearing whatsoever in today's economy ... !

 

It is nonetheless the Real Reason that for a quarter of a century past a significant part of our population has had a reduction in average Net Income. Meaning there lifestyles have been changed irrevocably.

But, perhaps not those of their children. IF they got on to a post-secondary education that allowed them to find a decent job!

There is no escaping the factual evidence of Age Change and what it does to societal conditions. (Aka, "standard-of-living".) It happened at the end of the 19th century and then once again at the end of the 20th century.

Dismiss it if you like, but that does not make Historical Evolution a lie as you seem to suggest ...

 

Are you still going on about this again? How does giving people more degrees help the population as a whole?
You do realize that in many cases a degree only helps an individual get a job because the employer chooses to give it to that person instead of someone else who doesn't have that degree?

 

1. The post-war Leftist-inspired welfare states mostly achieved growth with high employment, until the oil price shock of the 70's.
Since then he Left has been failing everywhere after the abandonment of the Gold-standard and introduction of neoliberalism in the 70's. (That's why liberal democracies now are being torn apart by hyper-partisanship, just in case you hadn't noticed, in your delusional condition of self-interested complacency; not surprising, since I recall you recently stating you "couldn't give a stuff" about other peoples' poverty - so much for your tag line re 'enforced poverty').

2. You ignore the causes and effects of the 1st world rust belt, in France and elsewhere, that accompanied the post war rise of Asia.

3. You claim the Real Reason for the collapse in wages growth is the arrival of the Information Age, and your solution is that we all become computer code developers. Talk about fantasy!

4. You ignored my comments about the state of the rest of the world, including the US.

 

It seems Krugman is moving toward MMT (and this is 4 years ago):

http://neweconomicperspectives.org/2014/07/krugman-now-disagrees-earlier-critique-mmt.html

And despite the fact you are obviously satisfied with your ignorance of macro-economics, here is a 9-minute outline by Prof. Kelton:

https://www.cnbc.com/video/2019/03/01/stephanie-kelton-explains-modern-monetary-theory.html

 

Well, that remark certainly ends our exchange.

Putting up somebody else's remarks as "rebuttal" is simply not on. You MUST substantiate any notion with factual evidence. Get it?

Factual evidence! (And you have none.)

 

Post-war Europe, which has become the European Union, is an economic entity that parallels that of the US.

Moreover, it is a far, far better place to live because it has two essentials that Yanks today can only dream about:
*National Health Care services that are key to extending longevity. (And Europeans live 3/4 years longer than Americans!)
*Post-secondary education tuition that does not cost (from a state school) $14K a year! Tuition costs are at the very most $1K per school year.

Wrong again.

I am convinced that we have exited the Industrial Age as of the 1990s when China dropped it Bamboo Curtain and started selling products to the world. We are now well on our way into the Information Age - where advanced educational degrees (vocational, associate, bachelor, master and doctorate) are essential basic necessities of any Market-economy.

Sheer BS-sarcasm to which it is not worth responding.

And I shall continue to ignore them until they have some intelligence

 

To recap: I gave my definition of MMT

<<MMT states that the spending of a government which is the sole issuer of its own currency is limited only by the real resources including labour that are available for purchase by that government.>>

To which your response was: "balderdash and you should know better".

so I went to an originator of MMT (Prof. Bill Mitchell), obtaining this:

<<a currency issuing government is not financially constrained and can maintain integrity of the financial system and purchase any goods and services that are available for sale in its own currency any time that it chooses.>>

Identical in meaning, I would say.

Anyway, you by-passed this central tenet of MMT with :

<<A country that borrows on international money-markets has as much funding as it wants and can support in debt-repayments>>

ignoring the capacity of a sovereign government to implement policies of its own choice within its own borders. The external BoP is a separate matter.

In short, your pet topic (and rightly so) - education - can certainly be funded without recourse to private sector debt (or savings) by a sovereign government, since the resources - ie, (mostly) time and mental effort - are available as long as there are students and teachers willing to engage in the process. This is a revelation of MMT.

You say:
"Post-war Europe, which has become the European Union, is an economic entity that parallels that of the US".

but with one big - and as it turns out - disastrous difference, namely, the 'states' of the EU are still sovereign nations,
minus the capacity to issue their own currencies. (Ie those who have adopted the Euro).

Hence the disastrous economic performance of the EU nations since the GFC. But even in Britain (without the Euro), underemployment remains higher than pre GFC. So your argument that socialist parties are responsible for the poor economic situation in France is lacking rigour.

https://www.businessinsider.com.au/...eat-financial-crisis-of-2008-2018-4?r=US&IR=T

You deny a relationship between the formation of the 1st world rust belt and the post war rise of Asia. Explain Detroit.
OTOH, I'm not denying global progress from industrial to information age.

But both the originator of this thread and myself have pulled you up on your prescription that higher education by itself will deal with the problems associated with this change, via the magic of neoliberal free markets. I say balderdash, to borrow one of your pejorative terms. Hyper-partisanship and loss of faith that democracy can achieve shared prosperity will certainly put paid to that notion. (But I keep forgetting, you are apparently not concerned about other people s' poverty)

But MMT describes a positive way forward, through allowing elected governments to implement policies that benefit the entire populace, not only the monetary elites we observe with neoliberal markets and the 'unemployed buffer pool' with their incredible waste of human capital.

So now we have the US trying to export its own poverty to China via Trump's trade tariffs, a natural outcome of unregulated competitive, neoliberal free markets, as each nation jockeys for supremacy on the world stage. We await the outcome of that particular little stoush with interest....

 

The above means ABSOLUTELY NOTHING of any consequence (as well as the rest of your blah-blah-blah)!

Spending by any nation is UNLIMITED unless the national budget is presented to the people for vote. Of course, that's a bit complicated. So, whaddawe do?

Supposedly, in the election campaign we make the National Debt a First-class Issue that merits debate. But, we don't do that because as soon as one gets into the nitty-gritty of national-debt people jump right off the issue.

What we can do however, is debate about why the hell the US government is spending more than $600B on Discretionary Income of which 64% is going to ONLY ONE AGENCY. (See here.)

What's my point? The National Budget it THE KEY FACTOR in determining to a very large extent economic outcomes. The US can afford a smaller budget that is focused on two key objectives - Financially accessible low-cost Tertiary Education and a National Healthcare service*.

Both of the above mentioned are well recognized necessities that at present are deficient in the US! Because Donald Dork wants to get reelected so he is catering to his BigBucks friends to finance that objective ... !

*That is, if the government will increase taxation on the super-rich the income from which will help compensate by retiring National Debt.

 

Eight pages of authoritative pronouncements by people who haven't the first inkling of economics. Amazing.

 

In my post to which you replied, you ignored at least 6 points concerning the parlous state of the global economy under the present failing neoliberal orthodoxy.

So I will deal with the first point only, in this post:

You said

That was your response to MMT's basic formulation of macro economics (as presented by Bill Mitchell), which said:

<<a currency issuing government is not financially constrained and can maintain integrity of the financial system and purchase any goods and services that are available for sale in its own currency any time that it chooses.>>

Your statement is merely a political observation, and says nothing about the theoretical foundations of the current failing neoliberal orthodoxy, whereas Prof. Mitchell's statement relates to a heterodox theoretical foundation (ie MMT) that promises a successful macro economic global environment.

 

However, Prof. Bill Mitchell, Prof Stephanie Kelton, and Prof Steve Keen ( a late convert), and many more developers of MMT, are experts in the field united in their criticism of Friedman, Krugman and the other supporters of the present failing global neoliberal orthodoxy.

 

More blah-blah-blah ...

 

Even more blah-blah-blah. You and your ilk have given NO COGENT EXPLANATION MMT!

Just references to others who have written about the method. And that aint good enuf ... !

Get it ... ?