Discover and read the best of Twitter Threads about #MMT

Most recents (24)

1/ @DougHenwood's [COUGH] critique of #MMT, and three responses by MMT economists and scholars.

[#LearnMMT THREAD]

Henwood's piece: jacobinmag.com/2019/02/modern…
2/ #MMT Economist @ptcherneva: "Henwood is tethered to the wealthy by an imaginary umbilical cord. Time to cut the cord. MMT has a profound emancipatory power. jacobinmag.com/2019/02/mmt-mo…
3/ #MMT scholars @videotroph, @nathanTankus, @RohanGrey, and @RaulACarrillo: "For Henwood, the left’s role is merely to argue extra hard for corporations and the wealthy to pay their 'fair share' of taxes." mronline.org/2019/05/02/mod…
Read 7 tweets
Prob the most significant Fed testimony of the decade, almost entirely due to the thoughtful questioning by @AOC, @RashidaTlaib & @AyannaPressley on the futility of the NAIRU, the need to support the real economy in recessions, & importance of an equitable public payments system.
Esp moving to hear @AOC challenge the Phillips Curve as a policy guide for Fed policy. While this was happening I was teaching my #MMT course in Spain--a country whose "NAIRU" the EC estimated to be 25% just a few yrs ago & in the double digits today
The rejection of the natural rate of unemployment/Nairu cannot come soon enough. Millions/100s of millions of livelihoods in the US and globally depend on it. J. Powell's response seemed to agree w/ @AOC and contradict his earlier statement from Jan '19.
Read 4 tweets
Thrilled to be on the op-ed page of the @FT! word limit was very tight (my 714 cut down to 615) so here follow a few explainers, expansions, further thoughts... 1/x
I was asked to write about mini-BOTS and assignats. Some would say they're complete opposites: assignats "backed" by land, #miniBOTs by nothing. But what gives money value isn't what's "behind" it but what's ahead--who will take it, for what 2/x
If #MiniBots are introduced, they will be circulate as a quasi-currency in parallel w euros. The anti-EU League Party is making vague #MMT anti #Austerity noises, but DO NOT BE FOOLED. A "parallel" voluntary money will not be good for ordinary people 3/x
Read 18 tweets
Some thoughts on this article by @ChrisGiles_ and Miles Johnson: amp.ft.com/content/28666e… @FT

I agree with @RobinBrooksIIF that there is a serious problem with how estimates of output gaps are constructed: 1/n
Output gaps can close not because actual output has recovered toward an unchanged potential trend, but because the path of potential has “bent down” toward the actual. 2/n
Among other reasons, this “bending down” may be happening also as an effect of the estimate of potential incorporating the consequences of past policy mistakes. 3/n
Read 19 tweets
1/ We must tax the rich, but it is **not possible** to use their money to “pay for” federal programs.

[#LearnMMT THREAD]

All federal spending is and has always been financed with created currency.
2/ This is true because of the realities of reserve accounting.
3/ Specifically, this is confirmed by research by @StephanieKelton. (Notice it says, "After carefully considering the complexities of reserve accounting...")
Read 9 tweets
1/ No one is happy with their health ‘insurance’ plan. No one. Those who say they are happy are confused. They conflate ‘happy with my plan’ with ‘happy with my doctors and hospitals in my plan’. But those are not the same things.
2/ When your job changes plans (as the majority do, every year, to save money), and you loose access to the same doctors and hospitals you had before, it’s not the ‘plan’ you liked, and now miss: it’s the doctors you liked - and now miss. That’s the issue. Do you see it, yet?
3/ For planned surgery, do you make sure that EVERY Dr and anesthesiologist that even looks at your chart takes your insurance? Are they ‘in network’? Do you still ‘like your plan’? And that’s work you must do BEFORE the ‘planned’ surgery. That doesn’t cover emergency surgeries.
Read 12 tweets
"Inflation the Boogeyman"

versus

Inflation in reality

[#LearnMMT THREAD v1]

WARNING: Just by **reading this thread** you (yes you) are causing a tidal wave of inflation that no plumber can ever fix.

Good job. 👍
2/ Those who do not understand #MMT, or do not want you to understand MMT, will say things like:

"Creating money causes inflation. Creating it beyond that causes hyperinflation."

So, creating one dollar 👉Inflation!

Daring to create that second dollar 👉 **hYpERinFlATiOn**!!!
3/ The idea that

“Creating money causes inflation."

is as ridiculous as saying

“Birth causes crime."

I mean, all criminals are born, amiright?
Read 23 tweets
Kalecki (1943) on why big business would abandon doctrine of 'sound finance' (austerity) if fascists take over: 'in a democracy, one does not know what the next Government will be like. Under fascism there is no next Government'. Puts recent embrace of fiscal activism in context.
so when #MMT gets on every business page, you shouldnt worry about its theoretical validity. You should ask what its rise tells us about the political context we live in. Economic ideas can have political power in hands of democratic socialist as much as in the hands of fascists.
and fascists, Kalecki tells us, are pretty good at reassuring big business by repressing opponents
Read 3 tweets
(hilo) ¡No pueden perderse esta buenísima e ilustrativa entrevista de @HGSarquis de la @LPOmx para México, a mi amigo @FadhelKaboub s/ la #TeoríaMonetariaModerna ! cc @RaulACarrillo @Jorge_Econopata @StephanieKelton @videotroph #TMM #MMT lapoliticaonline.com.mx/nota/122123-el…
"Fadhel Kaboub es economista, presidente del Instituto Global para la Prosperidad Sustentable y profesor asociado de economía en la Denison University. Es uno de los académicos más destacados del mundo en lo q respecta al estudio de la desigualdad y la Teoría Monetaria Moderna".
"la resolución demuestra un hecho ineludible: la Teoría Monetaria Moderna está viviendo un momento histórico en la economía más grande del planeta".
Read 9 tweets
This Republican, who voted for deficits that lined the pockets of the richest people in this country, wants the Senate to VOTE to affirm that restructuring those deficits to serve the broad majority is too dangerous. perdue.senate.gov/imo/media/doc/…
#MMT poses an enormous threat to those who wish to justify cuts to programs like #SocialSecurity or deny resources to a #GreenNewDeal on the basis of a phony debt crisis. They *need* The Deficit Myth. We want a better debate, one centered on our real resource constraints.
Fixed it.
Read 7 tweets
Great talk by @martinwolf_ at the 46th Economics Conference @oenb @suerf_org on escaping the #trap: secular #stagnation, monetary #policy and financial fragility
Before the outbreak of the global financial crisis @martinwolf_ saw himself as an orthodox economist - now suggests to read Minsky, Godley et al.
'Everything depends on everything else' - eternal truth by @martinwolf_
Read 9 tweets
If the NFL changed their point values to Field goals=7 points, and touchdowns=3 points, I imagine that teams would immediately stop scoring TD's, and start kicking field goals..when the rules of the game change, you change your strategy to give yourself the best chance to win
1/
Now imagine the rules of the "money game" changed (it shouldn't be hard, they DID change almost 50 years ago). When the convertibility of dollars to gold was removed, it opened up a wide range of possibilities that we still have yet to fully realize ("fully" is being kind)
2/
That doesn't mean there aren't limits, it's just that those limits are NOT what they used to be. The things we can do are no longer constrained by how much "money" or how much of a finite shiny metal we have- they're constrained by REAL things- Land, labor, raw materials etc.
3/
Read 6 tweets
Interesting article by @meadwaj in Tribune Magazine called 'Against Modern Monetary Theory' tribunemag.co.uk/s/91dc1087b5fa… Here are some initial thoughts in response in order to stimulate good-natured debate:
Meadway asserts that ‘money is a creature of law’ is a “dubious historical claim”. This is ahistorical. History shows that it is the power of the state and its institutions that have ensured state money’s dominance since the earliest civilisations of the ancient near east.
It is the state’s unrivalled power to coerce, imposing legal financial obligations denominated in its money, that makes simple credit into money. Taxes force certain members of the public to demand the state’s credits in return for goods and services rendered.
Read 22 tweets
Taxes don’t pay for things.
The govt creates money when it spends & destroys it when it taxes.
There is no money-bin where the taxes go.
People keep spinning this ‘taxpayers money’ BS bcz it’s too mind-blowing to #learnmmt
Our sovereign currency is a blessing we ignore
#ausvotes
The great difficulty #MMT (Modern Monetary Theory) faces is the inertia of old dogma.
MMT explains how sovereign currencies have the ability to build their attendant nation’s communities by investing in people
It’s just a way of paying for things by changing ‘the economic levers’
Most economists still act as if our currency is still tied to the Gold Standard. It’s not but they like to avoid speaking to this reality.
You can imagine them as one would a pre-science ‘man of medicine’.
#learnmmt
Read 13 tweets
I spoke with @worldfinance about #MMT and appreciate how this piece tackled some misconceptions and overlooked aspects.
worldfinance.com/markets/modern…
Some additional points that we didn't get to discuss w/ the author. The article says: the #jobguarantee would be "hugely expensive". On the contrary. The enormous costs of unemployment & poverty is what's "hugely expensive". The #JobGuarantee controls & prevents these costs.
The #JG is anti-cyclical & by design it 'controls' spending on employment to be at the right level. It anchors wages at the bottom-another key anti-inflationary feature
Read 4 tweets
@matslats this podcast clarifies for me some parallels between #MMT thinking and #MutualCredit. I think it may give us some clues as to direction in market making.
Mostly relates to #MonetarySovereignty
1/n
Defn is spelled out for a country that has #MonetarySovereignty:
1/ issues own currency
2/ takes taxe, fees etc in own currency
3/ only issues debt denominated in own currency
4/ attempts stable exchange rate wrt other stable currencies.
2/n
Primary causes of loss of #MonetarySovereignty :
1/energy deficits
2/lack of self sufficiency in food
3/imports high added value goods
4/exports low added value goods.
3/n
Read 12 tweets
Ten #MMT tips to remember on #TaxDay:
1. Federal #taxes don't fund federal spending, so let's #decouple these two important tools.
2. Taxes offset #Government spending.
3. It's a matter of #logic: #dollars must be spent into existence (by the Gov) first, in order for us to use some of those $ to pay taxes
4. #Taxing for #revenue is for local states/municipalities, not the #sovereign issuer of the #currency.
5. Taxing excessive wealth protects #democracy from #Oligarchy and protects us from abusive market power
6. Taxing #pollution & #speculation to reduce such activities, not to "fund" #healthcare and #education.
Read 6 tweets
Padre Gaël Giraud è già una star, giovane economista di grido, passato dal mondo delle banche e della finanza alla Compagnia di Gesù. Sacerdote, non ha smesso di ragionare sulle crisi passate e presenti, individuando una soluzione globale che investe l’economia e la politica,
a cui presta il suo impegno. E’ necessaria una Transizione ecologica, come spiega nel titolo del libro best seller, pubblicato in Italia dalla Emi. Non utopico ambientalismo, isterilito dall’ideologia, ma una proposta realizzabile che porti indipendenza dalle diverse troike,
cura del Creato, per noi e i nostri figli, pace, nella libertà dal sistema energetico che provoca le guerre e le tragedie umanitarie: sono i temi che hanno ispirato la Laudato Sì di papa Francesco.

Read 12 tweets
IMF chief economist - Gita Gopinath is no fan of #MMT

Asked what relevance it had to today's economies she said fiscal policy was an important tool for policy makers, BUT

"there is no free lunch, there are limits to how much countries can spend using money financing".
"[MMT] has been tried in the past in developed countries and in developing countries and the experience suggests that that usually ends up with uncontrolled inflation, with collapse in investment and a collapse in growth"
""while fiscal policy is a powerful tool, it is very important to be careful about the financing that's used for it".

She's right, y'know.
Read 4 tweets
1/ Imagine there's a billionaire with three children, but she only provides them with (just) enough food for two. They come to her to complain and ask for more, but she responds with, "I know, I know! But how‘re you gonna pay for it?"

(Yes, this thread *is* related to👇.)
2/ Of course, the children have no choice but to start fighting with each other. There's simply not enough food to go around, and eating is a biological necessity! Even though they are **brothers and sisters**, they have to be terrible to each other in order to survive.
3/ Even though she could easily provide for all her children, she chooses instead to shame and punish them for being horrible to each other. [How stealing a loaf of bread for a starving family forms the basis of Les Miserables] bahaiteachings.org/the-lesson-of-…
Read 18 tweets
(SCENE-Man is pushing his Lamborghini down an open highway, passes a cop)

🔹️Good morning officer!
🔸️Good morning. Are you out of gas?
🔹️No, just out for a cruise!
🔸️Why, if you don't mind me asking, aren't you *driving* your car then?
🔹️Oh right..looks weird huh?
1/
2/
🔸️Um..yep. Looks a little weird.
🔹️Well you see officer, this is a Lamborghini Aventador. It can reach top speed of 220 MPH, and can go from 0-60 MPH in 2.9 seconds!
🔸️(mumbling under his breath) Probably not while you're pushing it.
🔹️I'm sorry, what?
🔸️Oh nothing..
3/
🔹️Am I breaking any laws by pushing my vehicle?
🔸️Actually..um..I'm not sure. I think so though? Usually people DRIVE their functioning vehicles down the road.
🔹️Oh, right. But you see, because it goes so fast, I don't trust myself to actually *drive* it, you know?
🤷‍♂️
Read 8 tweets
1/ So, President Obama says that the latest batch of Dems should be ‘Bold’ but ‘pay attention to the cost’. Ok. If we’re going to be bold then let’s be BOLD! #MMT #MedicareForAll #GreenNewDeal

facebook.com/742233799/post
2/ Because that is the challenge that healthcare, education, the Climate Crisis, and so much more is demanding of us! Certainly, we have no time for less. #MMT #GreenNewDeal #MedicareForAll
3/ But everyone is supposed to be afraid of how all this gets paid for. Not curious about the financing. And certainly not determined to pass the policy, all else de damned. No, we’re supposed to be afraid of the financing. #MMT #MedicareForAll #GreenNewDeal
Read 5 tweets
👇 why I ask my students to read Adam Smith. Few know about the richness of his work and why he is considered the father of neoclassocal AND heterodox econ schools alike
E.g. Adam Smith had:
-utility AND labor theory of value
-chapters on govt & importance of public works
-the famous invisible hand metaphor is mentioned only once in the Wealth of Nations but apart from markets it was meant to govern his Theory of MORAL Sentiments.
In fact Smith kept working on the Theory of Moral Sentiments all his life. Without ethics and morality, markets didn't work.
As Amartya Sen argued, for Smith Markets Never Stood Alone
ft.com/content/8f2829…
He explored his lost legacy here too:
nybooks.com/articles/2009/…
Read 4 tweets

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