Author Topic: Economics- Modern Monetary Theory  (Read 174 times)

jafr1284

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Economics- Modern Monetary Theory
« on: March 16, 2020, 12:29:52 PM »
What does everyone think of modern monetary theory? Here is a good explanation.

https://www.vox.com/platform/amp/future-perfect/2019/4/16/18251646/modern-monetary-theory-new-moment-explained?fbclid=IwAR1J7nhOl1YQT76fRE4oueOv6AN8Gs3vWKma4y04vytBAGX2cE1P40NV48Q

This explains why its ok that the federal funds rate is 0, and we can inject money into the economy without having to worry too much about paying for it.


magnet18

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Re: Economics- Modern Monetary Theory
« Reply #1 on: March 16, 2020, 02:08:44 PM »
So... Basically, instead of everyone agreeing money is being created when printed, it's created when the government issuing it spends it. 

This means everybody can be promised whatever politicians want to promise them, and it never needs actually paid for, so long as that spending doesn't rack up the deficit fast enough to trigger hyperinflation

All of this is somehow* anchored by a guaranteed job from which you can never be fired

*Not an economist

Questions I have that I don't see addressed in the article

1. What happens when a country that's been buying US debt demands repaid?  That can't happen without either raising taxes or printing money to give them.  Or rejecting by force, via war, which on top of needless death would require massive amounts of spending (but *does* stimulate the economy and drive new inventions)

2. What happens when the bottom tier performers who can't hold any other job and usually account for part of the baseline "unemployment" (I can think of distant family members), are given a guaranteed job making enough to live quite comfortably, but continue to completely un-perform?  Can they be fired from the guaranteed job?  Does that then mean that if I get laid off and get a guaranteed job, and my boss happens to not like me for some reason, I can get fired/jailed and fall through the bottom of the system?
This is a lot more complicated than the rosy picture painted. 


Also, gripe, they blame Republicans for all deficit spending and completely gloss over Obama's spending levels, the partisan bend being as subtle as a jackhammer

A small part of my gut wants to call this bs, but
1. Were all just agreeing this paper stuff has value, and
2. Look at that defecit.  Does anyone actually think we have any plan to pay that off?  Why not stop pretending?