Why America Is Becoming More Divided

I'm not sure this is the forum to teach MMT, so I'll be brief.

Yes, but the public IS NOT THE GOVERNMENT. We have covered this before. There is no reason why the government cannot create money, alongside the non-government sector.

At this stage you should consider the difference between money and real resources.

REAL resources are labour, knowhow, technology and resources extracted from the earth.

What is money?

The fact that it's possible to conceive of a totally planned economy (with no private sector market) which has full access to all the necessary data, thereby enabling production and ' just' distribution of vital goods and services without recourse to money at all, illustrates the difference between money and real resources.

Government is in the business of 'producing' public services such as education; the question is why can't the government directly fund that activity via deposit creation in its own bank (the central bank) if the resources are available for sale in the economy ie not employed in the private sector?

After all, the government (via treasury) is the issuer of the nation's currency.

Private banks (users of the nation's currency) of course can only create deposits if credit- worthy customers (judged to be so by the bank) walk through the door and ask for a loan.
Note:
1. The business cycle means there are periods of underutilisation of resources including labour (recessions) during which people don't want to take out loans, because the risks are too high.

2. Much private business activity - resulting in wasteful utilisation of resources is in any case entirely profit-driven and of little or indeed negative real value to the community, eg, sugary and alcoholic beverages that are responsible for much harm such as diabetes, obesity, and antisocial behaviour (due ti excess alcohol consumption) creating excessive demands on health and police services, and unnecessary extra demand for transport resources etc etc (when water is available on tap in everyone's home.... just sayin'...)

I'll stop at this point to let you consider those basics of MMT, to contrast with your "magic money" characterisation.

 

In my opinion, the most significant political problem in the US today is how many people think of themselves and/or others, first and foremost, as members of groups rather than as individuals.

 

Our system is not perfect. It is, however the best system the world has ever seen, and it has worked in the real-world conditions and made America the strongest nation on earth. That didn't happen because we printed money and called it a "resource". It happened because we encouraged and enabled the production of value by our people, which out money represents. The essence of how that can be done or can be furthered today is simple, and government does have a role to play to make it happen. How? Get the hell out of the way. Regulations- the great idea of telling others how to run their business in detail, are the shackles that stifle progress. We have 168,000 pages of them. We are the 4th most regulated nation in the world. It's a wonder we have not already collapsed under the burden of it.

You may not be aware of it, but money is an invention designed to make trade easier. Money represents value. Before money, there was bartering, the direct exchange of goods with value. If you had no goods- you had no currency. If you print money today without it being directly related to product value, you DILUTE the value of all money, everybody's money. You have not increased value. The government does not "make" money- it simply spends yours and mine, then spends money that future generations will have to repay. Being the agency that prints the paper we use for money hardly make you the one providing the value that backs it.

That is why today, it takes more than a pound of money to buy a pound of toilet paper in Venezuela. They printed mountains of their currency to solve their economic and social problems- and literally made it cheaper to wipe yourself with money than with toilet paper. Everybody there has money now- but nobody has food or fuel or basic needs because their money is worthless. They are back to bartering valuable goods.

Now I realize you have this vision of how grand things would be if everybody just backed your idea. You aren't alone, history is full of grand ideas that didn't have real potential, and many got sold to the public who had no grasp of the issues. We simply do not have the caliber of people to support yours. You seem to think that can be by-passed because your idea is so good to you.

It's like world peace, a great goal. All we need to make it real is for everyone everywhere to become a dedicated, peaceful person. It depends on the people- not the governments which ultimately are controlled by the people. Try passing a social plan that tells people how grand it would be if everybody would just behave, keep their word, act with honor, and be nice- etc..... See how far that gets.

It has about the same chance you idea has.

 

Well it's disappointing you didn't address ONE of my points. Nothing complicated really.

[But as Keynes wrote in the preface to his famous work "General Theory of Employment, Interest and Money" (1935),
….I paraphrase: The ideas presented herein are extremely simple, but old habits of thought die hard].

At least Mario Draghi, who you probably have not heard of, despite him being a former head of the ECB, was recently reported in a Bloomberg article as saying "we should be looking at new ideas like MMT".

However, I will comment on this line from you, namely:

Anthropologists have in fact discovered money is associated with government seeking to exert more regulatory control over the local population, taxation being an important element of this, as production and distribution of goods and services in society became more complex.

Which explains why your words "If you had no goods- you had no currency" are wrong.
When Caesar arrived in Britain c. 50BC he found tribes with no currency (ie money) but plenty of goods; ie barter was sufficient for the (pre-government) social organisation among the pre-literate (no writing) iron age tribes in Britain.
The subsequent formal Roman invasion of Britain a century later saw the first introduction of money into Britain, denominated in the currency of the Roman empire.

 

I have stated many times that you cannot teach someone anything they don't want to learn. You think what you believe is all there is; and I do not want to legitimize it by discussing what you chose to believe or at least argue for as it it were rational and relative, as if it were the prime factor here. You may think you are discussing- but in fact you are debating, and your objective is totally adversarial. For you to win, the opposition has to lose. While I doubt you will understand the relevance of that to the tread question of "Why America is becoming more divided", but your approach here pretty well defines the answer.
Winning together- partnership is philosophy- is how society wins. That takes (here we go again) maturity and self-esteem... which requires Discipline.

I don't think you have a thought in there that has any real relevance or corrective potential given the reality of the state of society today. This in at best- a waste of time.

 

I can see you don't want to learn about macroeconomics. Fair enough. Others will.

But a significant reason for the increasing political divide (given chronic financial stress among half the population) is surely succinctly expressed in the phrase "it's the economy, stupid" or in MMT terminology "it's available real resources, not money, stupid"......

But carry on with your efforts to teach rationality and good sense to individuals; that is also required.

 

It's easy to complicate things, and we do have a fairly complex world. However one of the reasons it's so screwed up is that people have become so enamored with the details of complexity, that they have forgotten that beneath every concept are fundamentals- a foundation on which all the rest is based and built. If your foundation is not sound, everything you build on it is unsound and unstable- and most certainly is not the cause of the weaknesses in the foundation, thus- nothing you do in manipulating those peripheral aspects is going to repair the foundation. In terms of engineering, this is order of magnitude. New paint on bridge whose foundations are failing will improve the cosmetics; things will look better- but it will not alter the destiny of the structure; only make it prettier as it falls apart. In every aspect of our lives- personal, business, government- this is a problem, because we love the sophistication that makes us think we are masters of things- but find the fundamentals boring and not deserving of our attention, because we are more advanced and above that. We're above it alright- but we are dependent on that foundation to keep us there.

Do you know for example that there are only three reasons why your car won't start? One of those 3 fundamentals is not working. Now how it's not working may occur under due to a variety of conditions- but a smart mechanic checks those fundamentals first before he starts throwing parts at it in the hopes he will get lucky. Kind of the same thing here. You don't fix a dead horse by replacing it's shoes or hiring a new jockey, and you don't give people pride by telling them that someone else will have to carry them. At least, I don't.

 

Just to keep you informed....:

https://www.washingtonpost.com/opin...txXtbRJ1vFYl1DXdAqbCQXfbcjmox4JTsxGa-_cnUFfoM

Bernie Sanders:

"Deficit hawks once again show their hypocrisy on military spending.
The Senate will be voting this week on the Trump military budget, which calls for a massive increase in defense spending".

"I strongly oppose this legislation, just as I have all previous Trump military budgets. At a time when we have massive levels of income and wealth inequality; when half of our people are living paycheck to paycheck; when more than 500,000 Americans are homeless; and when public schools throughout the country are struggling to pay their teachers a livable salary, it is time to change our national priorities. It is time to invest in the working families of this country and not a bloated military budget".

"I find it ironic that when I and other progressive members of Congress propose legislation to address the many unmet needs of workers, the elderly, the children, the sick and the poor, we are invariably asked, “How will we pay for it?” Yet we rarely hear that question with regard to huge increases in military spending, tax breaks for billionaires or massive subsidies for the fossil fuel industry".

All very simple, really...

 

Of course it. Some people have money, we just take it. When we take it for the military- we protect all Americans. When we take it to give it to people who didn't earn it- ???? What would we call that?

 

We would call it insane. in both cases.

1. the military didn't "earn" it.
2. we don't need to take money from rich people...

Stephanie Kelton:

"Money doesn't grow on rich people"

 

1. The military is a service we choose to fund because we want to remain a free country- just as we pay for food or raise our own to avoid starving. Value for value.

2. We don't need to take money from rich people? We ARE taking money from rich people, and many of us are never satisfied. The top 10% are paying 70% of the bills now. You never hear "Thank you", you only hear how it's so unfair they have anything left.

And you are right- money doesn't grow on rich people, they aren't trees.
They are more like farmers, who raise wheat or corn- except that rich people raise money. They plant it, nurture it, protect it- and they use some of the fruits of that crop to plant more fields.

I'd like to know how you plan to raise those in poverty out of poverty without taking the fruits of the wealth farmers to do it. Nothing on the liberal socialist side is funded any other way.

 

Here is a more rational view of military expenditure:

"We can't have a war with a nuclear superpower - without annihilation - yet - our leaders wander around pretending otherwise.
This is one of the necessary illusions that maintains the military industrial complex. The reality is that all our toys are useless against a major power such as Russia - or China. So whats the point of the over 1 Trillion dollar total annual spend.

In 2000 - the total spend was roughly 300 Billion (which was 5 times more than it needed to be). Under Bush that spend went to over 900 Billion and topped a Trillion under Obama. Had we maintained the 2000 spend (even increasing with inflation) we could have diverted 500 Billion/year x 16 years = 8 Trillion dollars - to infrastructure, technology, ramping up our economy to compete in the 3rd millennium "saving the world" and so on.
Instead we threw that money down the toilet fighting useless wars - the purpose of which was to pad the pockets of the Establishment international financiers that run this nation".

(acknowledgements to poster 'Giftedone')

No we don't, but you don't want to learn about alternative macroeconomic systems, so....

This polemical view is a prime example of "why America is becoming more divided", totally ignoring Bernie's more balanced view:

"I find it ironic that when I and other progressive members of Congress propose legislation to address the many unmet needs of workers, the elderly, the children, the sick and the poor, we are invariably asked, “How will we pay for it?” Yet we rarely hear that question with regard to huge increases in military spending, tax breaks for billionaires or massive subsidies for the fossil fuel industry".

Hence professor Stephanie Kelton's clever reference to the old adage; which went totally over your head, because you aren't interested in alternative macroeconomic systems other than your sick "invisible hand" system.

Whenever I begin to explain money creation and valuation in the public sector, you say I'm getting unnecessarily complicated, despite the fact it's really simple......

 

We don't need a strong military to declare war, and we have had too many unnecessary ones. However, we do need a strong military to deter war- to prevent others who will maintain that capacity from believing we can be defeated. I didn't want to pay for Vietnam 50 years ago, and I don't like paying for Afghanistan today. But I will pay to not become the subject of some other nation and dictator.

And you ideas may be "simple", but they are irrelevant because they are out of order. When you have engine trouble, you don't fix it by putting on classy new wheels- Or do you?
Do you realize new wheels will not make the engine run better? Apparently not. If you focus on such things and ignore the core issue, it never changes. Have you noticed that after a 50-year war on poverty little has changed? Apparently not. Doubling down on things that don't work instead of fixing the underlying causes- is something we are seeing everyday from the left. They don't notice the failures either- and don't seem to learn anything.

And sadly..... If you endorse anything that might fall out of Bernies head.... I can see why you would go for the new wheels.

 

8 Trillion dollars - (denied to) infrastructure, technology, ramping up our economy to compete in the 3rd millennium "saving the world" and so on.
Instead we threw that money down the toilet fighting useless wars*..

I think we all agree...*nobody forced the US to go to those useless, unnecessary (and 'illegal' in some cases) wars.

So taxes are small change to you no doubt, while 60% of the population live with chronic financial stress, some of whom don't even pay tax (like the tax haven high fliers at the other end of the income scales).

https://www.cnbc.com/2019/01/23/most-americans-dont-have-the-savings-to-cover-a-1000-emergency.html

When the engine is obsolete AND dysfunctional, you replace it entirely with a new upgraded engine. . [Please, can we stop these silly metaphors...?)

No, actually the wheels are OK.... (sorry, couldn't resist...)

 

I'll keep saying it for as long as you insist:

A macroeconomic system, specifically, one that is ONLY based on the agency of private sector "invisible hand" competition, ie, the manifestation of the aggregate of actions of self-interested individuals, is obsolete in our globalised world, in which sustainable prosperity requires intervening public sector policy to manage scarce resources.

[Notice... no metaphors).

 

Horse puckey. Our society is all about people- individuals taking care of themselves, their family and their country- in that order. The Government IS NOT a nanny, and we are not subjects to it's will.
Government will never be more than people want it to be or allow it to be- but regardless of the power it attains, it has no control over human desires. Thus it cannot grant itself the power to force people what they do not want to do. One can construct many models of functioning inter-active societies- but they can only work with the willing cooperation of the people- and that will never exist for even a great model, let alone something out of a economics think tank that abuses some and privileges others.

Your plan requires drones- people that are part of the collective, that have been assimilated..... and are no longer free to think for themselves. Until the people want to support that- it will be doomed and do nothing more than continue to muddy the water and cause conflict.

I believe you're presenting this from a liberal/progressive point of view, and while you may not agree with that- it's pretty clear to me. That ideology has never had an idea that doesn't rely on using people- and I don't think ever an idea that actually was viable in this world. I'm not blinded with the brilliance of it- and I'm not baffled by the other name for it either.

 

..according to your obsolete, inadequate, classical liberal "invisible hand" view of the world, that wrongly assumes full employment at prices associated with full market clearance.

Here is an exchange with another debater expressing the same views as yours - that have no regard for the outcome for individuals in the system:

---------

Zorro:
The Commie (ie Bernie Sanders) with three nice homes including the Lakeside Dacha?

a better world:
No, the Social Democrat with the decency to know entrenched poverty is unacceptable, in a nation of plenty. To be fair to you in this debate, I acknowledge that Bernie still thinks he has to fund his social democratic policies by taxation (in his case, via a financial-transaction tax, IIRC).
And yet I'm still prepared to support him, given the outrageous increasing wealth inequality, including massive dollops of unearned wealth, in the current sick "invisible hand" system.

Zorro:
Sanders used to always say "Millionaires and Billionaires" but now that he is a Millionaire, I guess the group to heap hate jealousy and envy on is just the "Billionaires"?

a better world:
Certainly the system of 'reward for effort' is now so completely out of whack it needs complete reworking.

Zorro:
Who is denying anyone access to "above poverty" employment? Systematic deprivation of the civil rights of another is a Federal Felony. If you actually know anyone engaging in this, you should report them to federal law enforcement.

a better word:
The sick, a-moral (ie no concern for outcome) "INVISIBLE HAND" SYSTEM itself denies access to above poverty employment. Get back to me when U6 is < 2%.

Zorro:
Wherever did you get the idea that I have a problem with profit incentive?

a better world:
When a glorified shop-keeper, on the back of the internet, earns $1billion a month for a decade, and you accept that as appropriate reward for effort, then you have a problem with your concept of profit incentive.

Zorro:
I do not. I have a real problem with rent seeking. Most arguments against profit motive are really arguments against rent seeking. Look it up if you are unaware of the distinction.

a better world:
Addressed above. Rent seeking is just another example of unearned income.

Zorro:
As for advertising, that's simply freedom of speech and the freedom to publish, I have no right to infringe on the rights of any to engage in either.

a better world:
And so we have a gross mis-allocation of scarce resources, in your sick "freedom-based" "invisible hand" system ('sick' because of the spiralling inequality accomplanied by entrenched poverty)

Zorro:
If someone wants to misuse their own resources, that's their choice. Why would I stick my nose into that?

a better world:
You miss the point: the sick "invisible hand" system allows gross, purely profit-based, misallocation of scarce resources in the production side of the economy. How an individual consumes is his business (though the producers' junk advertising efforts will promote junk consumerism, as opposed to healthy, sustainable consumerism and recycling of waste).

Zorro:
That is more repetitious buzzword salad. (Zorro is replying to another of my characterisations of neoliberalism).

a better world:
I'm assuming you understand your economic philosophy is based on the classical liberal, "invisible hand" concept of Adam Smith. Never mind.

Zorro:
(Public schools) are consistently outpacing everyone else. Why are you more concerned with them than the private sector that trails them?

a better world:
1. because "your neighbourhoods are like war zones, your schools and hospitals are broken..." (do you know who said that?)
2. because "public schools throughout the country are struggling to pay their teachers a liveable salary,": Bernie Sanders.

(end--------)

Just to help you to begin to ponder the real reasons why America is becoming more divided.

 

Have you ever asked yourself why those things you blame exist? If you get around to that, consider that they might be the constructs of people. Not political accidents, but people making decisions and others supporting them or tolerating them. Do you think nobody has ever cared before you? Or do you think only the smart ones who think like you care, and the rest are fools? Have you ever considered that you might be the one not caring, because your focus is so narrow and ignores the fundamental driving elements around this issue?

I don't think you consider anything that doesn't fit neatly into what you already believe. That makes discussion impossible- as I stated earlier, you see these things as adversary, where if you don't win, you lose. Democrats are thinking that way constantly these days, and losing. It's not the system. It's the people making that happen. It won't change until the people change.

You think changing the system will change the people. I say- that hasn't worked yet..... I say if we can change the people, and they will change the system.
Unfortunately, I don't think you have really understood a scintilla of this exchange.

Just go your merry way and tell your kids that Bernie is going to make a better world for them.

 

Of course: that why I'm here, explaining it all...and why America is becoming more divided.

Bernie has half the story (though not quite there yet, re his understanding of MMT), and you have the other half.

The complete story requires a synthesis of the two.