Comments on: Modern Monetary Theory vs the Fiscal Cliff

By: Platinum Coin Seigniorage = Policy Space « Arliss Bunny's Blog

Platinum Coin Seigniorage = Policy Space « Arliss Bunny's Blog — Mon, 14 Jan 2013 04:42:31 +0000

[...] figured this whole thing out before. Part of this is because, as I have said, almost all of the people currently staffing those positions learned monetary policy at a time when [...]

By: arlissbunny

arlissbunny — Tue, 08 Jan 2013 08:20:13 +0000

My apologies for this long delayed response. Holidays, visiting family and the end of year books for my manufacturing company have all impinged on my sanity/sleep/spare time. I understand your question and I THINK I could explain it but I am just a physicist who got interested in economics recently. The real pros live at places like Bill Mitchell’s Billy Blog and Stephanie Kelton’s New Economics Prospectives Blog. I really, REALLY recommend that you go there and ask the very same question. I don’t want to give an answer that would in any way be confusing or incorrect. If you can’t get an answer there, come back and I promise to do my best not to be too obtuse.

By: arlissbunny

arlissbunny — Tue, 08 Jan 2013 08:11:17 +0000

Apologies. I have been busy with holiday, family and my human staff has been closing the books for her manufacturing company. This blog was cross-posted over to The Daily Kos and there was an excellent thread there which answers not only your question but provides a LOT more information as well. The new post today, “Mint the Coin vs the Debt Ceiling” is also cross-posted and most of the weedy discussion will probably be over at Kos. Here is the link for the cross-post for this blog post http://www.dailykos.com/story/2012/11/25/1164553/-Modern-Monetary-Theory-vs-the-Fiscal-Cliff. Again, apologies for not responding sooner.

By: Joel

Joel — Thu, 27 Dec 2012 17:41:29 +0000

I have two objections to this line of thinking:

1. To my way of thinking, “deficit” is not “debt” – it’s approximately the first derivative of debt. As long as the deficit is positive, the debt grows. Do you distinguish between the two, or should I read your post as if the two were synonymous?

2. The debt cannot grow without bound – or can it? Can it grow to be a multiple of GDP?

By: lynxreign

lynxreign — Tue, 18 Dec 2012 19:40:50 +0000

I have a question. Private + Public + Foreign = 0, right?
But the government can just print what it wants.
So if the Private = $100t
and Public = $-100t
(ignoring foreign ftm)
and the government prints $100t and puts it in its account, bringing it to $0
This is where I get confused. Is that newly printed $100t actually a $-100t even before it is spent? Does it somehow count against private and foreign bringing the total to 0? Since the government doesn’t actually hold currency (just creates and spends) , if it bought back bonds, paying off debt, how does that not put $ into the private sector while reducing the deficit?
Not arguing against, just trying to understand.

By: Danielle McPherson

Danielle McPherson — Sat, 01 Dec 2012 13:55:05 +0000

Thanks for the update arlissbunny. I find it all fascinating too. Learning as fast as I can. Yikes, and I thought I knew Economics!

By: arlissbunny

arlissbunny — Sat, 01 Dec 2012 08:38:07 +0000

Already done! Thanks for the recommend. I’m reading as fast as I can. It’s all fascinating to me.

By: bobbyp

bobbyp — Thu, 29 Nov 2012 13:30:34 +0000

Add Bill Mitchell to your reading list. http://bilbo.economicoutlook.net/blog/

Keep on hoppin’

By: Links 11/28/12 | Mike the Mad Biologist

Links 11/28/12 | Mike the Mad Biologist — Wed, 28 Nov 2012 21:52:19 +0000

[...] Modern Monetary Theory vs the Fiscal Cliff (very good) Southern Demographics Dixie musings Lincoln Against the Radicals This is the chart that debunks what everyone says about US national debt Another anti-propaganda post from NotYourSweetie How Dare You? The real lesson to be drawn from ‘Lincoln’ Disaster Economics Where Petraeus let us down No more doubt about voter suppression Racist idiots watch Red Dawn, tweet about it (younger readers might not realize how much anti-’Ruskie’ bigotry floated around during the Cold War) What Should Children Read? It’s a Great Time To Be a Banker in America [...]

By: arlissbunny

arlissbunny — Wed, 28 Nov 2012 07:32:21 +0000

Well, as it turns out, the old adage IS true. One does indeed learn something new every day. The last six days I’ve been starting to learn about MMT and today I learned I’ve been using a word incorrectly my entire life. I always thought “then” was associated with time and “than” was both consequence and comparison. Opps! Big props to Danielle for bringing it up and to John for bringing it up again.

But rocket science? NOW you’re talkin’.