Currency issuers are not currency users

A good, short article by Democracy At Work about how governments that are currency issuers don't have to "balance the books" and how politicians use your economical ignorance against you.
Also has a 6 minute video for those who are literately challenged.

democracyatwork.info/the_tory_campaign

Other urls found in this thread:

youtube.com/watch?v=eCbG12TxHk4
twitter.com/AnonBabble

A currency issuer like the US or UK government do not have to acquire money in order to spend it. They can just "poof" it into existence, by changing some numbers on bank accounts. Any time a currency issuing government (CIG from now on) spends money, they create it, out of thin air. Every time a CIG taxes money, they destroy that money. This means that unlike what people like Thatcher and May would have you believe, there is a moneytree you can go to, and you can't "run out of money" to spend.
This means that it is always possible for CIG's to spend money on welfare and investment in industries. It is always possible for CIG's to spend more money if they need to, to hire the unemployed to build new infrastructure, to buy goods and provide healthcare to everyone.

This is in contrast to states in the eurozone, non-issuing governments (NIG from now on). European NIG's use the euro, a centralized currency not controlled by the national governments. Germany or France cannot issue new currency, they have to tax their economy in order to get money to spend it. They have to "balance the books". This means that if there is a trade deficit between euro countries, there is no way for the deficit country to create more currency in order to stimulate its economy, they have to tax more. And due to the inert nature of the market, this means that the decrease in taxes always precedes the decrease in prices, making it harder to stimulate the economy.

so can you MMT fags explain to me why wouldn't money printing lead to inflation, especially if we are talking about welfare spending?

this all just sounds like some new perpetuum mobile of the third kind - money engine edition
you can't just create something from nothing

what's wrong with inflation? a pint of milk costs a lot more now than it did 50 years ago and people buy more milk than ever and it doesn't bankrupt them to do so.
anyway, if you allocate the money thoughtfully, in a planned out way you can actually reduce overall inflation.
corps invest billions into their supply chains to REDUCE COST.
you're a fucking brainlet and should never post here again.
don't reply.

Printing money would lead to inflation, but this inflation would be delayed to after the spending has happened. In addition to that, it allows your economy to utilise unused labour and resources by facilitating the purchase of these things by the government, in order to create more value. Stimulating the economy is a common technique.
But if you cant print money, you have to borrow from private entities, which means you have to pay it back with interest. This means that the government both gets into debt and has to pay back more, instead of not getting any debt at all and just causing a little inflation. Inflation, so long as there isn't hyperinflation, is not necessarily bad. It reduces the value of debt, which is what the proletariat has, and the rich generally do not have.

Lastly, your argument about "creating something from nothing" makes absolutely no sense because money isnt worth anything, is isnt anything. It is a means to ease transactions and fascilitate the purchase of resources and labour. By giving the government the power to make money they can use all the unused labour to produce something, rather than letting these people sit in poverty starving on the curb.

So by "creating something from nothing" you can actually use labour (the source of all value) that would otherwise have gone unused, thus creating value from "nothing". And yes, this will cause inflation, so you will have to either accept that or increase taxes.

This wouldn't be a problem in a moneyless society of course, where we wouldn't need to do economic gymnastics to utilise the productive capacity of society. Oh, right, and labour vouchers and the USSR's planned economy did exactly do what I just described. The state creates money (labour vouchers, money) to pay wages and buy resources and then destroys the money they receive from tax and sales (when the money/vouchers are spend). Labour vouchers just have the extra restriction of being person bound, thus not being able to circulate in the economy.

please try to contain your spaghetti you dip

eat a dick

I was talking about real inflation and inflation in the short term

inflation reduces the value of money you print you fucking imbecile

and if you not? all profitable industries are already owned by bourgs, what are you gonna do, expropriate them?
it is no coincidence that Keynesians of all sorts expect government to invest into infrastructure but not really try to compete in the consumer goods market with private enterprises

huh, and outsourcing surge leads to reduced inflation? who are you trying to kid here

Just imagine being this retarded

just imagine having no arguments

I feel so sorry for you.

Socdem magical thinking

Im not the guy you responded to but everybody knows they keynsianism cannot solve the problems of capitalism. Thats not what this is about.
What this is about is people like May using rhetoric like "balancing the budget" and scary sounding numbers to trick people into supporting austerity, even when it has absolutely no basis in reality. That is what the article is about, that a governments which issues its own currency cannot "run out of money".
Now as for what you said

Prices may inflate in the short term but if this money is spend on welfare and social services then you alleviate those costs from the poor and make the richer people pay for it.

Not important. If you devide the pie in 3 pieces, you have 1 of them, then you decide to instead devide it in 4 pieces and keep the new one, you now have more of the pie. Printing money always ends up giving you more real purchasing power than you started out with.

What you are basically advocating here is not printing money because it would "inflate everything and ruin the economy" even though printing money by the government, if spend on social services and employment, benefits the poor and workers of society and harms the rich. Borrowing money, however, harms the government and benefits the rich, by making the government take out loans in the private sector, loans of money, the thing the state can create for free and instantly.

Capitalist economics is magical thinking in general, but that doesnt mean that this magical thinking works marginally better than the others.

Daily reminder there is absolutely no empirical evidence Austrian school economics works.
Please kill yourself.

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That we have stage magicians doesn't mean you can say hocus pocus and have all the money you want.

You literally can. That's the point.

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Ancaps please leave


Yes we can. Thats litterally the point. The state can print unlimited money.

Please stop shitting up the board.

MMT is wrong but all spending has an inflationary risk. Does that mean we should limit all spending? The private sector prints bank deposits (which are used as money) all the time. It generally doesn't create inflation. Demand-pull inflation is pretty rare. Cost-push inflation is far more common.

The closer you get to full employment, the more a boost in aggregate demand will create inflationary pressures rather than output increases. The further away from full employment you are, the more a boost in aggregate demand will create output increases rather than inflationary pressures.

MMT advocatse using central bank issue of currency to implement Minsky's employer of last resort to gain full employment. It's hard to see how this wouldn't be inflationary (in the long run) because aggregate demand would be very high and workers would be demanding wage increases too.

youtube.com/watch?v=eCbG12TxHk4

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that's what I'm saying

MMT is 100% correct. It simply states how money creation happens in economies with their own central bank, and the limits to the system.

are you being le serious

Now explain to me how it would find willing holders of liabilities while doing so.

lmao tbqh fam
how much money is in the world right now?

Dude what are you on right now. We're talking normal printing money, not zimbabwe or weimar levels printing money.

That doesn't explain how it would find willing holders of liabilities while doing so.


see

No. All of the claims of MMT are 100% wrong. The only things they are right about are stuff Post-Keynesians have known about for eternity.
Endogenous money theory is not the only aspect of MMT (it is correct however and Keynes was one of the first people to talk about it). The problem is it adds Chartalism which is pure quackery and a bunch of policy proposals which would almost certainly create inflation.

The treasury can always find a bid for their bonds because the central bank provides primary dealers with the reserves BEFORE the treasury auction even takes place. Once you've given somebody a perpetual zero-interest rate bond (money) and setup an auction of non-perpetual positive-interest rate bonds (treasury bonds), of course the bonds will get sold.

We can and we should are two different things. The state can print unlimited money, but litterally printing unlimited money is retarded. But not printing money because muh budget is retarded and a little bit of inflation isnt bad so long as it doesnt devaluate the currency to such an extend that using it to run a modern society becomes unpractical. Prices have risen several orders over the last hundred years, yet nobody stopped using those currencies.

but can't inflation just spiral out of control and eat away all of this new printed purchasing power as well as a chunk of the old purchasing power

but I accept that inflation is good for money circulation and alleviating debt burden
Shumpeter said that inflation was one of the most elegant ways to rob the rich

I have a problem with MMT fans when they basically say you can print money without any constraint with no negative consequences

Further to your point he reason why people stopped using money in Zim and Weimar wasn't because of money printing, it was the destruction/loss of productive capacity.
The last example of high inflation I can think of was earlier this year in Europe when the lettuce crop failed and the price of lettuce shot up like 400% in a week.
TL,DR there's more to it than just money printing. Usually a collapse in government that leads to war meaning the loss of tax collecion which leads to excess money in circulation and the destruction of productive capacity.


The point is it can literally create an unlimited amount of money, as it's just created as an entry on a computer, not that there would be no effects of doing so. Grow a brain moran.

Which relies on the fact that the bank doesn't act as described.

Actually it can't. It can print unlimited bonds and rely on the central bank to provide unlimited reserves to purchase them but it can't directly print new bank reserves itself.

Now technically the treasury prints coins but it only does that when there is a demand from private banks for coins who in turn pay the treasury for the coins with bank reserves. The treasury can't print coins in order to spend into circulation.

Basically governments don't print money unless you do the wrong thing of including the central bank into your definition of government like MMT people do.

Central bank exists to stabilise interest rates. Without providing reserves to primary dealers, they would lose control of the interest rate. So yes the central bank is acting as described.

All of you fuckers should read this book

Gee.

forgot pic

What's the point on offering policy proposals which can't be done under the existing institutional structure? If you want to implement money printing, then say "Firstly, we must change the law so that governments can print money for spending". There's no point in suggesting policies that couldn't be done under the existing structure.

Crank.

kek

They're not independent

Not an argument. Prove him wrong

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I dunno user, just sounds like printing money with extra steps.

I don't know what you're saying here. Just because central banks aren't independent doesn't mean you can make the claim "governments can print money to spend". It's different and details matter.

Then that's just deficit spending which is what we do right now. Nothing new about MMT then is there?

Youre the dude who brings up MMT mate. I just made this thread because, and I quote to before:

Oh and deficit spending is mentioned in the article if you bothered to read it/watch the video in it.

And I dont give a fuck about whatever MMT might or might not be. So don't try to go "ha mmt is not new gotcha". I dont give a toss about it, dont even know what it is. I dont do economic fantasy football.

That was OP actually. I started by responding to the person about inflation

I did not create this thread nor make the first posts about inflation so I didn't bring up MMT at all.

The article using a quote from an mmt group doesnt mean it claims anything about mmt or what it is new or revolutionairy. If you say its the same as what keynsian economic or pink elephant economics does, i dont care what you call it to be honest. I dont see why youre trying to diss mmt as a thing rather than the idea if you agree that it is possible, already happens, and can be good.

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MMT is just a naive restatement of basic Keynesian economics. That fiat money is arbitrary is common sense to anyone who isn't an Austrian anti-reality goon.

Nobody actually says this. They say you should print money until inflation becomes politically excellent. Then you raise taxes to destroy some money, or cut spending on giant gold statues of Keynes.
At least that's my understanding. MMT's basic line of thought being "The only limit on how much the state can spend is inflation, there's no actual cash-limit."

In Keynes' day the money supply had a hard limit, after the Nixon shock it didn't.

wew /leftcuck/ is transitioning from Marxian retard to full retard

lol xD you sure told them