MMT - Modern Monetary Theory

Also to add: Most of the money the poor spend goes right back to the bourgeoisie anyway when they purchase goods and services. But UBI would force the rich to provide more goods and services for the same money. And this will inevitably lead to the bourgeoisie having to hire more people in order to provide these goods and services. So yes it is a tax on the rich.

Instead of funneling all of the profits they make from labour saving technology and outsourcing into Wall Street, the rich will be forced to spend that money on Main Street. That's basically all I'm saying. Capitalism with a human face. They will be forced to provide more goods and services and jobs and dump less money into Wall Street. The S&P 500 has grown far more in the past 3 decades than worker wages and inflation. And worker wages have not kept pace with inflation, let alone labour productivity. How is that fair?

What do you think about MMT vs. fractional reserve banking? A lot of money is created by bank lending. Could the inflation caused by MMT be counteracted by restricting the fractions on this lending?

The part I still don't get is…

What do you mean exactly by "not real"?

debt is a spook

dude, neither is $10, and his website policy page still says $8

I definitely think the banks need to be reigned in. Much of the inflation we are experiencing currently is due to bourgeois borrowing cheap credit and dumping that money into the Wall Street bubble and the real estate bubble (it burst in 2008 but they're building it up again). The richer you are, the more that the banks are willing to lend you and the lower the interest rates. The working-class Joe is offered a 5 year mortgage at 2.4% or whatever it is right now. They're not the ones who are benefiting from the central bank's low interest rates…The bourgeoisie is.

Inflation is only like 1.4% right now in my country. But a savings account only gives me 0.55% (because of the low central bank interest rate). So about 0.85% of my wealth every year is being redistributed to bourgeois fucks to spend on Bay Street (our national financial centre) or real estate (making it more difficult for us to buy a house) and then turn around and charge us enormous rents. That shit would end in my regime. The central bank interest rate would be tied to inflation.

I have heard Mosler say $10/hr in a lecture of his on YouTube. I guess his aides don't update the website. lol. I don't know what the cost of living is like in the United States since I don't live there. But in 2013 the poverty line here in Canada was like $19,542CAD/year disposable income - so income after taxes and deductions. And the Canadian Dollar was at parity with the US Dollar roughly back then. $10USD/hr at 2080 hours per year (40 hours/week *52 weeks) = $20,800/year.

From my experience, a shit load of things are cheaper in America than here (for eg. A $10 USD bottle of vodka in America is like $26CAD when it should be more like $13CAD! lol). But that probably isn't enough in 2016. And you have to factor in taxes too. And quite frankly, having to work a 9-5 just to earn the basic income is pretty bullshit. With all the advances in labour saving technology we've had and with all this outsourcing, how is it fair that the work week now is just as long, if not longer, than it was in the 1940s?

And if you were to adjust the minimum wage in the 1960s for inflation and labour productivity, the minimum wage should be far, far higher than it is now. Bernie Sanders' $15/hr proposal is far, far more reasonable than Mosler's $10. Mosler is no Republican. He's a Democrat. His ideas are New Deal-esque Democrat compared to modern contemporaries like the Clintons and Obama. But not quite. FDR would think that $10/hr is a joke for 2016. He's definitely more neo-liberal than Sanders.

The national debt is government spending minus taxes plus interest. Where did that government spending come from? The central bank created the money out of nothing. Is the Federal Reserve going to take the US government to court for not paying off this "debt"? lol.

For all the conspiracy theorists who say the Federal Reserve is not a government entity, last I checked the Federal Reserve website ended with a .gov. So is the US government going to take itself to court? When the Federal Reserve basically just created money out of nothing and then "lent" it to the US government? The "loan" isn't even legitimate for fucks sake. It's not backed by anything. Not gold. Not bitcoin. Not assets. Nothing.

Now the holders of these US Dollars, they are going to expect to get something of value back for these dollars someday. That's the real issue. There would be an inevitable classic conflict here if I was like "we're going to implement basic income, which will intentionally devalue the dollar." But the status quo right now is to inflate the money supply for the benefit of the bourgeoisie and the working-class is too cucked out of their mind to realize what's going on. That's why the bourgeoisie don't give a shit that the national debt is insanely high. Because they are benefiting from this debt.

There's also the potential for international conflict if the greenback is devalued. China has trillions of these dollars. They are willing to do business with America because they fully expect that they will be able to buy American real estate, natural resources and corporate stock in the future with their trade surplus dollars. Technically though the American government can say "no, America is not for sale." And China has two options: They can either declare war on the United States (good luck) or just cut their losses and stop hawking their junk to America.

Exactly

So you are that sure, that China cannot do anything to the US, cause it has SUCH STRONG ARMY? Hm?

What will you do then, when a wealth deprived China, under crisis, goes full war economy, to survive, and even get's russia as an ally?

Are you gonna insert your floppy disks and nuke the world?

Argentina's social democratic government defaulted on all the hard currency loans the country received from the IMF and such and no one declared war on Argentina. They just gave Argentina a shitty credit rating and stopped lending them money. And international markets lost faith in the Argentinian Peso since they stopped pegging it to the US Dollar.

Btw the Chinese are deliberately devaluing their own currency in order to boost exports and imposing tariffs on imports to boost their exports. So it's not like China is playing by the rules. Fuck them. We should not be dealing with China any more than we already have. They're just going to continue to buy up our real estate and drive up rents sky high. And buy up our natural resources and whatever else. It was the elite who made these business deals with China. Why should the working-class pay the price for the elite selling the people out to China?

Zeitgeist 2 provides a nice, albeit dumbed-down introduction to MMT.

youtube.com/watch?v=EewGMBOB4Gg

The IMF is the DEFINITION of a spook.
It's essentialy the US empire in action.
It doesn't declear war on you. It cannot. It only strangles you economicly. (and some times sends a CIA agend to take you out for daring to do something against the overlords).

I don't know.
Cause they want the "'Murican Dream" to continue, they have no ClassCon and are fed propaganda, maybe?

Also China wouldn't be so poor if they actually you know, consumed the products they produced instead of exporting it all. China needs to follow Japan's example and shift away from their export-led mentality to more of a consumption-led mentality. Paul Krugman wrote an article last year that China's stock market crash last year was due to the fact that China's investment to GDP ratio is too high and their consumption to GDP ratio is anemic.

But Capitalism doesn't work without constant profit!
And if they go for internal consumption, they'd have to give people better wages.
And isn't that the very reason China got big? Low wages?
And isn't Neoliberalism sprew "lower wages to attract invesments" BS?

Could it be Capitalism is not working?

...

Than dollar ceases to be a reserve currency.
There will be struggle to lift new "king" on the throne. Probably by the means of war.

But if a central bank can just create money out of thin air and use that as a basis for public policy, then why are some countries so indebted to the IMF?

There are no winners in a "race to the bottom". China has to compete with other emerging developing nations who are doing the same thing (keeping wages low to attract investments). China can't keep relying on exports to grow their GDP.

Currency board.

Are you an Economics major? Sorry for attacking your identity that you so strongly hold.

And neither can it raise wages!

CAPITALISM CANNOT WORK!
NEOLIBERALISM IS DOOMED TO FAIL AND TAKE US DOWN WITH IT!

A properly designed UBI could, in the long run, result in a redistribution of the means of production. The means of production have value just like everything else, and if you implement a system which consistently redistributes wealth from the rich to the poor then the means of production (or rather the ability to buy shares in the means of production) will be redistributed too.

Poor nations borrow hard currency (US Dollars) from the IMF in order to purchase imports. Because their national currencies don't have a lot of perceived value.

A country like Jamaica (which has borrowed plenty from the IMF) for example is an island with not a lot of natural resources. They need imports. How do they obtain the hard currency needed to purchase imports? Accepting US dollar loans from the IMF, selling exports, tourism, sex tourism (it's common for western middle-aged female tourists to pay young black men for sex in Jamaica.)

My advice to Jamaica is to just say No to the IMF because the IMF's policies end up making things worse. And focus on exports and tourism and pray that things will get better. Jamaica could implement a UBI to redistribute wealth. Though a UBI in Jamaica would theoretically be a lot smaller than a UBI would be over here. Since Jamaica is a poor country.

There is a good reason for having this weird system where government "borrows" made up money from some form of central bank, it is a way to have some level of control and transparency in the public spending, inflation does negatively affect the population and not just the rich, this is specially true with the poor because they don't have assets to save value.

Because money can't magically conjure up goods nor the infra-structure and knowledge necessary to produce them, you must import it from somewhere.

And why is that? Oh yeah, the IMF requires countries to do this in order to give them loans.

MMT basically breaks with Marx's essential theoretical viewpoint regarding money: money is an objective relation expressing the way in which commodities can be related to one another as different expressions of value. Money in its essence is not something institutional or completely at the control of subjective agents within capital–it is the AUTONOMOUS objectification of value.

The state and central banks do function as the actualizers of money but they do not essentially CREATE money. There is an ultimate barrier that limits attempts to divorce the system of note/credit/bank monies from the objective, underlying monetary system.

That depends on who is benefiting from the inflationary spending. The reason why the poor usually get shafted by inflation is because all that extra government spending isn't actually going towards the poor.

Welfare, disability, social security, food stamps, etc. all of these things have not kept pace with inflation. And the government has made cuts to public education as well. Worker wages are also not keeping up with inflation. You know what's beating inflation though? The S&P 500. So for the past 30+ years the government has redistributed wealth from the working-class to the bourgeoisie. And the Republicucks are too blind to fucking see it. They bitch about the National Debt. But where is all that deficit spending going? Not to welfare programs. Not to Obamacare. TOP KEK! Or shall I say TOP CUCK?!

The cantillon effect, this is because the powerful always utilize the economy influence of the government for their own interests.

inflation basically works as stealth taxation.

To be fair though, I shouldn't be smug making fun of working-class Republicans. This is probably the biggest problem with the left in general. If the Democrats focused more on economic issues and less on social issues, the working-class conservatives would be more likely to listen.

When Indiana rejected gay civil unions, there were calls from liberals to boycott Indiana. When Indiana rejected the Medicaid expansion (Obamacare), not a single boycott petition. Liberals don't give a shit about working-class Indiana "white trash". If liberals actually advocated for worker rights in red states and swing states, they would do a much better job.

From the perspective of purchasing power yeah…
unless you're holding inflation protected securities and securities that beat inflation

I'd forgotten about this thread.

fanks

you sound well read in this but it all just strikes me as bullshit. The government as the sole creator of wealth just doesn't seem to work. I mean there are other valuable assets (art, jewalary, property) that exist independent of the government and could be used by people as a means of exchange completely aside from the government. Then there's foreign reserves. Dunno, I just can't get my head round the 'government creates the money' idea.

Again, pic related. If the US hadn't raised the debt ceiling they'd have defaulted causing all kinds of hell globally. I see government debt the opposite way to you I guess, not the government's debt but the future generation of taxpayers debt, and without their consent. In real terms you are seeing the result of this reflected in the falling wages and rising property prices. The world holds trillions of US dollar and the US is keen to keep selling em. Inevitably eventually some of these dollars will make their way back to teh US in the pockets of rich foreigners. This and lack of supply is what drives up city housing prices.

I actually agree with you on UBI. Fully a proponent of it but I'd run a balanced budget first. In the UK for example we spend 50bn a year on debt interest. This is more than we do on the military and housing combined.

Under the current system does inflation not do more harm to the poorest? Given they have the least disposable income, any increase in the cost of living will hit them hardest no?

No the government isn't creating wealth when they run a government deficit to expand the money supply. The true measure of a country's wealth is their access to goods and services. There would be more goods and services being sold in a basic income world. Because the working-class, especially the poor, spend a larger chunk of their income on immediate consumption than the rich do.

If we refuse to sell certain assets like real estate, natural resource holdings, etc. this will lead to a devaluation of the national currency. Making imports more expensive. Then we would be forced to cut back on imports or export more goods and services abroad. Right now the international community still has faith in the US Dollar despite their trade deficit. And the domestic bourgeoisie is content with the status quo. They're just using the national debt excuse because they want to kill social security, food stamps, etc. When in reality, all those government deficits that the US administration has run up over the years has been to the benefit of the bourgeoisie! lol.

The deficit/debt just does not matter at all. It's not like we owe money to people. It's just that holders of a national currency expect the value of that currency to be preserved. If you introduce basic income, you're going to piss off the bourgeoisie who hold your currency. But if your goal is to improve the lives of the working-class, pissing off the bourgeoisie is a given.

How though? If we are paying 50bn in debt interest, and still not paying down our debt then next years debt interest will be 52bn. This is 52bn that has to come from somewhere (taxpayer, QE or borrowing) and is £52bn that could be spent elsewhere. As I said in OP this is fundamentally what I don't get about MMT. This line in particular

Just seems patently untrue to me.