Stephanie Kelton: How the political class has lied to you about deficits
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June 22, 2020 at 3:12 AM #328855Bernie BoomerParticipant
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for about a year; as I’m not an economist, it’s a bit of an uphill battle. I think I’m at the “simple Marxism” stage – I can articulate the basics well, but the details are still eluding me – so I have to be careful who I engage in the conversation!
I started read Kelton’s book a week ago. It is fantastic – written for a public audience, not an academic one; excellent examples to illuminate important points; limited use of terminology that springs so easily to the lips of economists but leaves others scratching their heads in bewilderment.
Because I whole-heartedly agree with the theoretical premise of MMT, I’m a fan, so there’s my disclaimer . . . but if you haven’t read the book yet, consider it!
June 22, 2020 at 5:30 AM #328903VoltairineParticipant
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MMT is purely imperialist theory and praxis. US economy does not exist in vacuum, but as part of global economy, and ballooning of deficit on this scale is enabled only by petrodollar as global reserve currency.
One thing I agree with her is that ‘deficit’ is not the best term. What the creative accounting produces is more accurately defined as hyperinflation. What do the current insane stock market valuations consist of? Hyperinflation bouncing around the financial system, without any connection with real economy and what market is supposed to do – to provide efficiently reliable information about supply and demand. At the same time banks are not giving any loans to ordinary consumers, (correctly) estimating that nobody would be able to pay their debts, or even interests. At the bottom of the pyramid there’s terrible artificial scarcity of money and large parts of real economy are becoming demonetized.
What happens when dollar loses it’s reserve currency status, as other economies start trading oil etc. in other currencies and dump their dollar reserves? Purchasing power of dollar for imported goods collapses. Prices of consumer goods go through the roof, more and worse riots. And then it’s too late to start to really drop helicopter dollars to consumers, as that leads to Weimar, Zimbabwe and Venezuela style events. China and Bitcoin whales could buy US dirt cheap, but why would they want to?
Kelton’s denial of the horrible effects of 2008 for Greek etc. people is utterly disgusting. Her version of state capitalism is the worst of all. Full employment? Fuck that, we don’t want more wage slave jobs to fuck up environment. We want to work less hours doing more meaningful work, and essential work compensated essentially. Banksters cooking their books with creative accounting is not essential work, we don’t need any banksters, fuck them all.
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