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View Diary: Modern Monetary Theory vs the Fiscal Cliff (65 comments)

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  •  It is the quality not the quantity of tools... (4+ / 0-)
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    TheDuckManCometh, Chi, Calgacus, semiot

    Keep in mind I am still working hard to wrap my brain around a lot of this and I'm a physicist and not an economist (making my earlier math error even more humiliating) but this is what I think in terms of your questions.

    1) Inflation can not occur unless too many dollars are chasing too few goods and in a system where there is high unemployment but no natural constraint on supply (there were MANY constraints in Brazil) not only should there not be inflation, practically by definition, but there would be a MASSIVE amount of warning when that train got on the tracks. As it stands right now, and for the foreseeable future, the inflation train isn't just stalled, it's derailed.

    2) The Treasury destroys currency every day and why would it be a problem to constrain excess (hot or inflationary) currency by disposing of it. It has no intrinsic value. Pulling it off the books is just a meaningless accounting write-down. I say, and I think MMT says, sure, destroy it because the moment it circulates back into the public sector, according to MMT, it disappears anyway.

    3) Again, there would be plenty of warning before we ever got near that point but regulatory barriers are a matter of fiscal POLICY and not inherently part of MMT which is a description of economic systemic ground truth.

    Of course, I could be completely wrong.

    "When in doubt, do the brave thing." - Jan Smuts

    by bunnygirl60 on Sun Nov 25, 2012 at 12:06:09 PM PST

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    •  The Cons are duplicitous and their reliance on (5+ / 0-)

      euphemisms, whether causative or incidental, is evidence. "Policy" I've about decided is a euphemism for power. If so, the fiscal policy is really an effort to exercise power over (control) the economy -- i.e. the exchange and trade of goods and services by which humans sustain each other. Or, to put it another way, the availability of currency is being used as a tool to coerce the behavior of the populace. Which means that, since currency is supposed to be used measure and facilitate exchange and trade, the currency is being abused by the manipulators of fiscal policy. And, contrary to what they want us to believe and which the Federal Reserve is designed to hide, the economy of the U.S. is being manipulated by the Congress for the sole purpose of keeping themselves in power.
      Why would they do that? Why are they not content to just represent? Because, by tradition, they are petty potentates doling out public resources and assets to their loyal supporters. When the railroad magnates and cattle barons got rich, it was as a result of being suckled at the public teat.
      Now the oil barons are upset about having to pay for leases and the Congress is upset at not being able to secure their positions by distributing our assets to their friends. Worse still, the public insists on governing and that means reducing our petty potentates to stewards AND STEWARDESSES. Oh how the mighty are poised to fall!!!

      We organize governments to provide benefits and prevent abuse.

      by hannah on Sun Nov 25, 2012 at 12:39:00 PM PST

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