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View Diary: Math is Hard: Or why everything we know about debt and deficits is wrong (84 comments)

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  •  Any debt instrument is a net financial asset. (0+ / 0-)

    The creation of such things is limited to neither banks nor the Fed. To say "banks create credit" but not net financial assets is to talk nonsense.

    To put the torture behind us is, inevitably, to put it in front of us.

    by UntimelyRippd on Mon Nov 19, 2012 at 06:01:22 AM PST

    [ Parent ]

    •  Might want to read up on endogenous (2+ / 0-)
      Recommended by:
      whoknu, psyched

      and exogenous money, MMT, Steve Keen.

      •  Alternatively, I might not. (0+ / 0-)

        Lemme think.

        Wait ...

        Nope.

        Rock on.

        To put the torture behind us is, inevitably, to put it in front of us.

        by UntimelyRippd on Mon Nov 19, 2012 at 03:06:59 PM PST

        [ Parent ]

        •  Why are you even here (0+ / 0-)

          if you find MMT so offensive?  Just to cause trouble?  Seems unproductive and inefficient to me.

          Loyalty to petrified opinion never yet broke a chain or freed a human soul in this world--and never will. Mark Twain

          by whoknu on Mon Nov 19, 2012 at 05:10:21 PM PST

          [ Parent ]

          •  You think it is unproductive and inefficient to (0+ / 0-)

            engage in public debate with people who are offering policy prescriptions that you consider to be impractical, dangerous, and in the main, pointless distractions?

            How un-Jeffersonian of you.

            To put the torture behind us is, inevitably, to put it in front of us.

            by UntimelyRippd on Mon Nov 19, 2012 at 07:51:41 PM PST

            [ Parent ]

            •  My point is you are not (0+ / 0-)

              engaging in debate.  You are calling people names and being obnoxious.  I fail to see how that is productive.

              Loyalty to petrified opinion never yet broke a chain or freed a human soul in this world--and never will. Mark Twain

              by whoknu on Tue Nov 20, 2012 at 06:22:47 AM PST

              [ Parent ]

              •  these diaries are not intended to be debates. (0+ / 0-)

                they are intended to be propaganda.

                one of you posts a diary.

                typically it contains a marginal fraction of new ideas, but mostly is just a retread of previous ones.

                then the rest of you come in and compliment the diarist.

                and each other.

                and then you condescendingly "explain" to all dissenters that they:

                Don't understand money.

                and/or

                Need to read some foundational tract of the movement.

                and/or

                Lack a sophisticated perspective

                etc.

                Meanwhile,  the entire argument is dressed up in deceptive jargon that obfuscates rather than clarifies, throwing the poor uninitiated person into a psychic crisis (Am I  dumb? Do they know something I don't? Can I become an initiate too?)

                To anyone who does have a reasonable understanding of money, whose only gain from reading the foundational tracts would be to learn the definitions of the obfuscating jargon, and whose perspective is sufficiently sophisticated, thank you very much, the entire proceeding is just as obnoxious and insulting as you perceive my manner to be.

                To put the torture behind us is, inevitably, to put it in front of us.

                by UntimelyRippd on Tue Nov 20, 2012 at 07:54:14 AM PST

                [ Parent ]

    •  Yes (1+ / 0-)
      Recommended by:
      whoknu

      Correct, but that is not what NFA means in MMT, or NMT if you want - the name MMT came from a blog commenter, not an academic. They had called themselves neochartalists, postkeynesians etc before then, but the name & acronym stuck.

      NFA  in MMT means netted out over the whole private or nongovernment sector. So only the government can create NFA, government liabilities, by definition. It's a tautology. And it is not the Fed but the Treasury which really does the NFA creation, by government spending. Treasury bond issuance and Fed operations are generally just monetary operations that screw around with interest rates, the price of one government liability, one government debt in terms of another.  In essence, this NFA, which increases by deficit spending, and in sum is the National Debt, is the base money supply that the private sector, banks, leverage to create the "money supply" - although MMT academics don't talk too much in those terms.

       ****

      Academic MMTers are well aware of the problems you are talking about and in agreement, mostly with you on the dangers. E.g. There is already far too much American money in circulation. Yes - far too much private-debt money, shadow banking, derivatives, etc in this age of "Money Manager Capitalism". This is not at all the same thing as saying "too much NFA / government debt" - which as clonal emphasizes above, should hardly ever be something to concern oneself with.

      The basic point is that modern mainstream textbook academic economics since the 70s is shit, perpetrated by charlatans pretending to use mathematics they do not understand. It gets everything wrong, everything backwards, in a way that even the most bastardized textbooks of the 60s, say, did not.  So MMT starts with the beginning, always the best place, and emphasize the underlying simplicity that the mainstream gets completely wrong, brainwashing people into absurd, psychotic beliefs - not the worst being that money creation is automatically inflationary. But you then must proceed carefully and slowly to put everything in its proper place and distinguish the real dangers from the "bogies", the imaginary hobgoblins.

      One can even understand your "confiscatory taxation" as being an MMT proposal - because the real taxation is government spending, when labor, say for a JG, is confiscated for government money, government debt, government promises.  The government should just confiscate enough labor to have full employment.  MMT academics do favor lowering wealth inequality etc, are basically all lefties. But the main point, the hard part of changing the world is in understanding it first.

    •  Wrong again (1+ / 0-)
      Recommended by:
      psyched
      •  Uh huh. (0+ / 0-)

        The first symptom of obfuscatory social sciences: Take an ordinary phrase, transform it into jargon, then smirk at someone who employs the ordinary phrase in an ordinary way.

        There is simply no polite language with which to accurately express my contempt for the lot of you.

        To put the torture behind us is, inevitably, to put it in front of us.

        by UntimelyRippd on Wed Nov 21, 2012 at 03:36:29 PM PST

        [ Parent ]

      •  Who is? (0+ / 0-)

        Directed to me or UntimelyRippd ?

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