Stephanie Kelton on The Deficit Myth – zero hour
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Rights aren't rights if someone can take them away. They're privileges.
That's all we've ever had in this country, is a bill of temporary privileges.
- George Carlin
Sooner or later we all sit down to a banquet of consequences.
- Robert Louis Stevenson
Politics is the entertainment division of the Military Industrial Complex.
- Frank Zappa
July 4, 2020 at 5:16 AM #333173
July 5, 2020 at 11:00 PM #333687
It’s horrible theory. For MMT to work as it’s been working so far you gotta have global reserve currency, be allied with Saudi, invade Iraq etc. to quell any resistance against Petrodollar Empire.
She’s not suggesting anything new, just trying to justify what Fed has been doing for few decades now and to justify Petrodollar empire and keep telling “progressive” people that their violent empire is gonna continue 4evah. MMT is the theory of American Exceptionalism.
July 5, 2020 at 11:29 PM #333696
European people’s weren’t asked whether they want Euro. Referendums weren’t generally allowed, when they were, people voted against.
Before Euro, what governments regularly did to lighten their debt burden, was devaluations. Most Americans don’t have idea what that means. It mean’s gubment deliberatly cutting the external purchasing power of your currency, and inflation of domestic consumer prices as exported goods become much more expensive. You get the same wage as before, but after devaluation can afford to buy much less than before. It’s a form of inflation.
The reason why US Constitution bans states making their own money and keeps that Federal monopoly was Shay’s Rebellion. After the revolution, everybody was in debt up to their ears, and people in many states wanted to inflate and devaluate the debt away. The rich merchant class wanted the debt to be paid in hard money of gold and silver. Rebellion lost and merchant class wrote the Constitution and states lost their ability to print money and devaluate their debt couple centuries before same happened in EU.
The obvious solution is let people create and use their own money as they like, but as that would mean that they wouldn’t pay taxes to support the parasites of the ruling class, that can’t be allowed.
July 6, 2020 at 12:37 AM #333707Cold Mountain TrailParticipant
- Total Posts: 8,882
“gubment deliberatly cutting the external purchasing power of your currency”
how do ‘gubments’ accomplish this (be precise please) and why do you label it ‘inflation’ while economists label it ‘deflation’?
thanks in advance for your answer.
July 6, 2020 at 1:31 AM #333725
In fixed rate system such as Bretton Woods, gubment unilaterally changes and devaluates the exchange rate of their currency against other currencies, or let’s the currency float freely.
When currency floats freely, you devaluate the external purchasing power of your currency by inflating your money supply, ie. printing more negative money aka debt. Kelton is right about one thing, more accurate term for adding more financial deficit would be inflation of money supply.
Inflation of negative money supply in the financial sector can mean deflation of positive money circulating in main stream. As the system works, there’s always less positive money to pay debt and interest than there is negative money and interest created by the banking system, and the ratio of positive money/negative money keeps getting worse. For banks to be able to sell more and more debt with interest on top, there needs to worsening artificial scarcity of positive money (ie deflation) in the main street, ie more and more demand for negative money.
Here’s the big and ugly number that matters the most: US trade imbalance with other world economies is now 55 billion, and the fact that “The United States has been running consistent trade deficits since 1976 due to high imports of oil and consumer products.” https://tradingeconomics.com/united-states/balance-of-trade
The trade imbalance is maintained by deficit aka inflation of money supply, US is printing money out of nothing to pay for imported goods that US consumerism devours. US can do that only because of military imperialism suppressing efforts by other economies to defy the petrodollar empire, which creates artificial demand for dollars in the world economy. Without deficit inflation of money supply, US could no more import more than it exports, good buy consumer economy.
US has been doing MMT since 70’s. What Kelton’s MMT is de facto saying: We REALLY don’t give a fuck about how many brown people we have slaughter in other places of world, so that boomer pensions, minimum wage etc. don’t lose their purchasing power big way. MMT is nothing but attempt to justify the big, fat, ugly and genocidal theft by US and it’s petrodollar empire.
Edit to add: Here’s Varoufakis discussing with Kelton. He’s way too polite with his guest, IMHO, but manages to make clear what MMT means to other economies: Union fights hard to get 5% rise in wages, because of trade deficit etc. gubment devaluates currency, purchasing power of currency drops e.g. 10%, consumer goods inflation drops the purchasing power of wages more than they got rised through collective bargaining.
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