Powell Trashed MMT, But Wall Street Sees Room for U.S. to Try It

[nooby_mcnoob]

Can someone expand this in their own words ?

Thanks.

You have a daughter who can't find a job, so you pay her to do some data processing for you. But... you create the money out of nowhere.

 

[Nobert]

You have a daughter who can't find a job, so you pay her to do some data processing for you. But... you create the money out of nowhere.

Ah i see.

 

[ZBZB]

In QE the central bank creates digits on their ledger and transfers them to the treasury in exchange for bonds. What happens under MMT?

 

[nooby_mcnoob]

In QE the central bank creates digits on their ledger and transfers them to the treasury in exchange for bonds. What happens under MMT?

Same thing, but more actors than just the central bank.

 

[srinir]

She says the surplus that the government creates through deficit goes in the pocket of the private sector. Yeah... Right. It goes in the pocket of a select few in the private sector and always will. For the most part, the middle class does not see any of these benefits and "more government involvement" won't magically fix the issue.

You cannot blame MMT for this. If the deficit spending is done the right way like improving crumbling infrastructure projects, then the most of the money goes to lower and middle class workers and their lives. Good thing about this it has a multiplier effect, which improves fiscal side because of the most of the lower and middle class workers spend their money in the local economy, instead of saving in the banks. Even Job guarantee also has similar effects

I For the most part, the middle class does not see any of these benefits and "more government involvement" won't magically fix the issue. Very easy to see that this is true because most of my generation will live lower quality lives than their parents.

Are you sure about this? There were $36 billion deficit in 20's before Social security (govt. involvement) was introduced. Whose life became better? After new era of free way construction in 50's (another govt. involvement) whose life became better?

 

[nooby_mcnoob]

You cannot blame MMT for this. If the deficit spending is done the right way like improving crumbling infrastructure projects, then the most of the money goes to lower and middle class workers and their lives. Good thing about this it has a multiplier effect, which improves fiscal side because of the most of the lower and middle class workers spend their money in the local economy, instead of saving in the banks. Even Job guarantee also has similar effects

That's kind of like saying "Socialism! It'll work if you do it right! (TM)".

Here's a hint: it'll never be done properly. And since that is the case, how do you manage? MMT has no answers. The human being is the problem, not the theory.

Are you sure about this? There were $36 billion deficit in 20's before Social security (govt. involvement) was introduced. Whose life became better? After new era of free way construction in 50's (another govt. involvement) whose life became better?

That's not what I said. I said that many of my peers will have worse lives than their parents because people have gamed the fiat system.

 

[srinir]

That's kind of like saying "Socialism! It'll work if you do it right! (TM)".

Here's a hint: it'll never be done properly. And since that is the case, how do you manage? MMT has no answers. The human being is the problem, not the theory.



That's not what I said. I said that many of my peers will have worse lives than their parents because people have gamed the fiat system.

I gave couple of real life examples done properly. May be we are not electing right people.

 

[nooby_mcnoob]

I gave couple of real life examples done properly. May be we are not electing right people.

Actually, no you didn't. You provided a sound, theoretical idea that would work if humans weren't humans.

 

[srinir]

Actually, no you didn't. You provided a sound, theoretical idea that would work if humans weren't humans.

I gave examples of US freeway system built in 50's and introduction of social security in 30's.

 

[Stockolio]

What is the difference between QE and MMT?

It's exactly the same thing, Bernanke used that system. In theory United States is already using Modern Monetary System... I don't understand why people are getting excited now, United States has been a de facto socialist Economy since 09. All MMT does, is give Socialist QE a different name.

Put Rates at 0.5 % and have Government own the Corporate debt, effectively destroying private sector investment, does that sound Capitalist or Socialist ? The days of Pension Funds or firms buying corporate debt and stimulating the economy, getting Investment Grade returns of 7-8 % are longgg gone! Fed Interest Rate will never exceed 3 % again. Bunch of Keynesian Nut Jobs are for MMT/QE, and look at all the economist running the Fed atm... There all Keynesians.