Wow. This is the first interviewer who actually understood MMT well enough to ask intelligent questions! Really superb interview. I really don’t get why conservative hawks don’t get on board! MMT basically says that the Federal government can spend as much on national defense as it wants-constrained only by the possibility of inflation. And the longer we continue to spend, the greater the capacity of the defense industry to produce. This is absolutely correct. MMT is politically agnostic and correct!
Nothing of any substance again from dannywindham. Still waiting for you to be able to explain why MMT puts across the false idea that taxes put value into money when they did nothing to put any value into money in countries where inflation made the money utterly worthless.
And I have to add that at the moment it is not just a question of numbers, it's really about the nature of the people involved in issuing it and where those numbers are actually going, and I know that war and legalised death in one way or another has been funded by those numbers, maybe MMT is not a theory, maybe it is a proper look at how the numbers in a modern economy actually works, but let's not forget where most of those numbers actually come from, they come from people or organisations taking out "loans" not at the moment from government, but from commercial banks, commercial banks are not going to be all bad, but the bigger they get the worse it seems to be
MMT is garbage derived from false beliefs dressed up as economics. It has beliefs that include the idea that taxes put value into the money and get it acceptance when in reality taxes did nothing to put any value into of get acceptance of the money in every country where inflation made the money worthless despite those taxes. Despite that if taxes put value into money then higher taxes would put more value into it but the reality is mostly the opposite. It has the utterly false belief that say the money must be spent by government before taxes can be paid. Kelton herself says this. -This is utterly wrong because most money in the economy is created by private banks who are not government and not even agents of government. That private bank money pays for most of the tax that government collects.
By all accounts the commercial real estate market is far from OK, and while I think Stephanie Kelton is definitely worth listening to, unfortunately when she talks about a post bullshit 19 recovery I know that this intelligent woman should know better
@@LeveragedCoach Her ideas are credible because she makes so much sense, not just because she has a degree, unlike many academics, who think they deserve it(credibility) just for having one. Her views are basically unassailable, that's how they've withstood years of scrutiny and her credibility continues to grow. She deserves perhaps, the Nobel prize.
@@marmotsongs What are you getting at? No pegging to another currency? Why has that not worked? I am curious as to Where has it been done and failed or Where has it been done and succeeded? Have you done any research on that? Have you just been told that without researching it?
Enlighten us. Tell us what, exactly, is crazy. Be precise. What do you think is factually wrong in what she says? If you can't be precise, we will know you are full of hot air.
@@jkepler1571 Stephanie Kelton has been very clear that MMT does not cause inflation. Biden has proven her wrong. People are poorer today having followed Kelton's ideas. The exact opposite of MMT expectation is the current economy. What is factually wrong or are you full of hot air?
@@NoPickles.4Me The lie: your entire comment. Exactly where did she say "no downsides?" I've never heard her say anything like that in all the lectures she's given.
@@galek75 These economic ideas are very new, not tested and further fly in the face of historic economic knowns. Her silence on these facts is to imply it's all sunshine with no downside. Mix in some Thomas Sowell with your MMT intake.
How does she get away with this nonsense? MMT would require Treasury to create money. It doesn't CBS make reserves, comm banks create money when they lend. MMT doesnt describe the monetary system in any way. So disappointed in such a softball interview.
@Jesus-kt5dc Totally wrong. The Federal Government does not print money. The creation of new money is solely either the Federal Reserve bank or the private commercial banks who create it as loan. All of the designated official fiat money in the economy (like the U.S. dollar) is created this way and all of it is created with debt obligation that means it has to be paid back and is paid back when the loans or bonds sold to initially get it actually mature - they all mature in time. .
Only concern these days is labelling anything that you can observe in action for yourself a theory, is a complete misnomer for aberrations in policies that are not misunderstood, not when it is a political process of misdirection of the public. Many people following the MMT Provisioning concept have come to object to the idea of theory being necessary for knowledge to be established in Academia, as merely a matter of style. The Measurement Problem, and Uncertainty Principle Observation approach to Actuality is pure-math empirical shaping laws in which quality becomes the start point of declaring a POV developed positioning system of innovation and design in an amorphous environment of ideas. When the Mathemagical quantization concepts of available or allowable reference-framing containment positioning of resource management is either a severely restricted Nomenclature or message of mass distraction from the obvious inequitable circumstances, "No one is right if everyone is wrong". Ie don't confuse value theory and promises with deception in practice of actual goods and services resource management. All the rest is Commentary.
Yes - The flat earth theory is a good example of that. Totally flawed when you observe the failed facts it is based on. Just like MMT which is based on false facts that are shown to be false across both the history of economies that have failed and false present facts which are contradicted by the explanations of current institutions which perform those functions.
Amongst the things that MMT economists deliberatley avoid is the fact that money creation by the Central (Reserve) bank for government to spend involves as a necessity the creation of an equivalent amount of debt. That debt is a burden for private sector to repay when the treasury securities which were sold to the central bank to secure the new money. It all has to be paid back by those in the private sector when those treasury securities mature. Of course they can't admit that because it shows their MMT is scam of huge proportions so they leave it out of and discussion and avoid any answers if it arises.
@@knobfieldfox You only looked at part of the situation. Firstly the securities that the Fed buys are either are sold to those in the market or paid out by the Treasury when they mature. They are the two options and you should have taken notice of the often reported announcements of the Fed that it is selling off some of its debt to reduce it's balance sheet which itself is an admission that it does not just write off debt. Additionally if anyone writes off debt that is owed by ignoring it then there is an abuse of the principles of accounting which is essentially fraud no mater if it is digital or paper money since all money is interchangeable no matter what media it is created on. The Fed is run on bank business accounting rules and not some exclusive rules of its own.
@@RKDTOO The Treasury gets its money from the taxes people pay. If you can understand basic accounts and have a basic understanding of simple mathematics you will be able to see and understand the historical records that prove this is so. See these historical accounts from the US Whitehouse records in table 1.1:- www.whitehouse.gov/omb/budget/historical-tables/ If the records show there is balance or near so then the amount of taxes equates with the government spending. If there is an over spend then it too shows. To say that government gets its money from anywhere else is just pure denial of fact and only fools deny facts. Even if government borrows it eventually is paid back from taxes. Do you have a better explanation that is proven so by historical fact? I would like to see it if so.
Wow, Impressive, you got that exactly backwards, the fictional National Debt is the Economy's Savings Bank Account. 🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣Son, go back to school, you are Economically Illiterate. Any National Debt Debit is a Credit into the Economy, you act like the U.S. $25 Trillion Economy doesn't even exist. The Money of fictional National Debt is a Credit in the Private Sector.
It is bad over all because it is in denial of reality and believe the government is some sort of magic god like ability and has some sort of magic powers to create wealth and solve what it can't. It is a childish fantasy devoid of reality.
If you plot the Dow Jones divided by M2 money - it's a straight line. In other words, virtually ALL of the growth of the stock market is just people with their printed money parking it in stocks and shares . . .
AOC endorsing MMT is not a confidence booster. Why climate agenda, lets just using MMT build more entertainment, food center and music concerts- at least we can all feel good right away instead of championing for an elusive climate catastrophe decades into the future
Kelton pouring out absolutely false information again when she says the government is the issuer of the currency - Totally wrong and complete lie. The government does Not issue the currency but either borrows if from the Federal reserve ( theequivalent the central or reserve bank in other countries) OR taxes the private sector to get it. This situation occurs in almost all countries under the fiat money systems which are world wide. If you are astute enough you will have notice she provides no official explanations of this false claim. The correct explanation fro the official sites shows she is wrong. Take for instance this explanation from the Canadian government's official parliamentary library which outlines how fiat money comes into existence by the central bank and private banks. It says "In practical terms, when the Bank of Canada purchases government securities at auction, it means that the Bank records the value of the securities, each of which has a unique International Securities Identification Number, as a new asset on its balance sheet. It simultaneously records the proceeds from the sale of the securities as a deposit in the Government of Canada’s account at the Bank - a liability on the Bank’s balance sheet (see Appendix, Table 1). Since the Bank of Canada is a Crown corporation - wholly owned by the federal government, yet independent of it in the conduct of its monetary policy - the Bank’s purchase of a newly issued security from the federal government can essentially be considered an internal transaction. It records new and equal amounts on the asset and liability sides of its balance sheet, creating money through digital accounting entries.7 The federal government can then spend that newly created money in the Canadian economy as it sees fit, subject to Parliament’s approval." and then explains "Private commercial banks also create money when they purchase newly issued government securities as primary dealers at auctions. They do so by making digital accounting entries on their own balance sheets: the asset side is augmented to reflect the purchase of new securities, and the liability side is augmented to reflect a new deposit in the federal government’s account with the bank. However, it is important to note that the majority of money in the Canadian economy is created within the private banking system every time banks extend new loans like mortgages, consumer loans and business loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money (see Appendix, Table 2).". It adds:- "One key similarity between money creation in the private banking system and money creation by the Bank of Canada is that both are realized by simultaneously increasing the asset and liability sides of a balance sheet.". Also it explains: As the Bank of Canada explains, its purchases of Government of Canada securities are Not a way of financing the government’s spending and debt at no cost; the federal government has to Repay the securities when they become due. " You can see it on this site :- lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/201551E When private banks create money much of it goes into paying taxes that are collected from wages or from excise or from sales taxes. It has not been issued into the economy by the Federal reaserve or spent by government. Kleton's MMT economics is blind or deliberately ignores this fact to put across false story.
From Article 1, Section 8 of the U.S. Constitution: "The Congress shall have Power...to coin Money, regulate the Value thereof, and of foreign Coin..." From Article 1, Section 10: "...No State shall coin Money..." A later Supreme Court decision ruled that Congress had the power to issue paper currency. So, the US government IS the sole issuer of the currency. The Fed is part of the government because the Fed was created by the US government. The legislation that created the Fed gave the Fed some independent powers so the Fed board of governors doesn't have to check with Congress for every decision it makes. But the US government created the Fed and it could dissolve the Fed if it ever chose to do it. And you don't know what you're talking about.
@@jkepler1571 You have missed the relevant details of today’s monetary situation in the U.S. The Federal Reserve is the body that is responsible for stability of the currency and that has been so by law since 1913. The currency was backed by gold standard until 1971 when the link to gold was abolished. The situation following that is almost all of the U.S. dollars are fiat credit based. The remaining less than one percent is coinage which is very small proportion and paper money which forms the cash but this is only about 2% of all of the dollars. The rest is purely credit based fiat money which has been created by the Federal reserve and private banks when they both lend to borrowers. Private banks create most of the money when they lend to their customers. The situation is the same with almost all countries today. That includes European, Asian, African and South American countries. The U.S. government does not issue the currency. It merely borrows it if needed from the Federal reserve or from the market when it wants to fund spending. The money all has to be paid back on maturity when the treasury securities that government sells as method of getting that money reach their maturity date. That is explained on many sites of government or the reserve banks of counties across the world. Try reading this simple explanation from the official library of the Canadian Parliament to learn what happens :- lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/201551E
The fed is part of the government. It doesn't need to get paid back ever. If the government borrows a trillion trillion dollars from the fed, and never pays it back, that's fine. It's just numbers on the feds spreadsheet
@@jkepler1571 You are wrong if you think money today is issued by the government. The creation of new money ( only about 10%) in the U.S. is done by the Federal reserve bank which creates it in response to the congress determining that the budget will be in deficit due to taxes being insufficient to provide enough money for the proposed budget. Therefore there will have to be borrowing from the Federal Reserve and /or the public through treasury bond sales. The borrowing from the Federal reserve is paid for in new digital money that the Federal reserve creates and pays the Government with. It is all fiat credit and debt based money. You can see the amount they created in the past that is still in existence. It is on their Federal Reserve balance sheet which is disclosed regularly. The overall situation with money is that most money (over 90%)is created by private banks when they lend to their customers. It too is fiat credit and debt based.
@@jkepler1571 Oh Dear. You really are confused by these MMt self promoting scammers. Did I say a State can coin money? No I didn't. The Congress members do not coin money, regulate its value theref of, and of foreign coin. They don't each produce coins in their kitchen or their workplace for others to use. They delegate power to do it. What don't you understand about that? Congress gave the authority to create money to the Federal reserve back in 1913. The Federal reserve bank creates new digital money to lend to the government in an exclusive contract and in exchange for Treasury securities. Congress also intentionally created the laws to allow private banks to create new money in exchange for loan agreements from their customers. .
No, because bitcoin can't be used to pay taxes, and it's thus not a currency, so it's no more logical than gold or stocks. Now if you're attempting tax evasion, that's something else altogether.
So the trillions of dollars committed during/after Covid had zero bearing on our current inflation? Those ‘other nations’ that didn’t commit the same % had higher inflation? Did they control the reserve currency. Did the wage earners not suffer as their wage growth is not backstopped by personal money printers? MMT is a very short lived top down economic model.
MMT is not an economic model. It is a factual description of the financial system as it actually functions now. It does not advocate this or that policy. It is policy neutral. If I say Mars orbits the Sun farther out from Earth's orbit, I am not saying we should or should not try to go to Mars. I'm just describing reality. Whether we should go or not is a question of politics and do we have the technological capacity and the resources to go. Here are some of the basic facts MMT points out. Fact 1. There is only one issuer of US dollars. That is the US government. It's clearly stated in our Constitution. No other entity or person can create legitimate, non-counterfeit US dollars. So, the US can never run out of dollars. This is what everyone calls "printing" money, even though only about 10% of all US dollars are not bills ($1 bill, $5 bill, etc.). Most US dollars are dollar-denominated electronic deposits at US financial institutions. Fact 2. This follows immediately from Fact 1: The US government does not need to borrow it's own money. The thing you call borrowing is really just a savings account at the Fed. You trade dollars that don't earn interest for dollars that do earn interest. These are called "bonds" or "Treasury notes" or "Treasury bills." That is what everyone calls borrowing. These two simple facts are very hard for people to accept because they've been told a lie their whole lives. It's like being out on a sunny day. It's obvious that the Sun moves around the Earth. Except this is false. We know the Earth orbits the Sun. But once you understand these simple facts, you will begin to understand the financial system. The money created during COVID was not the cause of the inflation. Or at least not the primary cause. What did people do with that money? Many people paid down their debt. If they paid down their debt, how could that money bid up prices of goods and services? The pandemic caused delays in shipping, which caused shortages of different goods, which caused prices to rise. This would have happened even if the government didn't send people $1200 checks. Market power also caused inflation. Why did beef prices go up so much? Did cattle ranchers get rich from this? No. Cattle ranchers sell their cows to meat processors. There are four companies that control more than 80% of the market. The companies are Tyson, Cargill, National Beef, and JBS. These companies sell the beef to the supermarkets where you buy it. 1915farm.com/blogs/education/part-3-meat-mergers-and-the-rise-of-the-big-4 They can raise prices almost whenever they want. When they saw prices of other goods going up, and when the pandemic started causing shortages of beef, they raised their prices even more simply because they have the market power to do it. But they didn't pay the cattle ranchers more money for the cows. None of the extra money you paid for beef went to the cattle ranchers. It just went to the four companies that control the market. This had nothing to do with the money created by the government. It was caused by the combination of shortages caused by the pandemic and the market power of those four companies. ua-cam.com/video/UaY-v49RhGQ/v-deo.html&ab_channel=BloombergOriginals
In response to a question from the interviewer about inflation several years ago Kleton admits "we did get high inflation". It shows the failure of her MMT because the 9% inflation actually occurred . That inflation proves the fallacy of her MMT in which she says inflation will only occur when there is deficit spending and a lack of idle capacity in the economy but in that time there was no idle capacity but that 9% inflation.
No it does not. This has all been explained (including by "mainstream" economists) and she actually speaks about this in the interview. With COVID, most of the inflation was supply side inflation. You can have less inflation when there is a problem with supply along with an economic downturn if you let business go bankrupt and people loose their job but the programs to actually keep business and people afloat actually contributed very little to the inflation so it was worth it. Without the government programs (in most advanced countries) COVID would have been a far worst disaster than what we actually experienced.
@@jsimonlarochelle You are mixing up timelines and confusing what happened that which happened in 2020 and after. Kelton's understanding of inflation after that time was not even suply side economics. Her MMT answer two years ago was that the inflation was' transitory' and a result of 'growing pains' in the economy. see this:- ua-cam.com/video/qHYHW1qI5b0/v-deo.html No mention of supply side economics than. She was wrong then and is still wrong but in hindsight now claims she was right.
@@Rob-fx2dw No I'm not. Of course there was a delay in the inflation. During COVID the economy was slowed down everywhere. The inflation hit gradually after COVID because it took quite some time to resolve the supply issues. Also, you have to take the war and weather extreme into account. For example here in Canada a lot of our vegetables come from California so we were hit quite hard by the flooding of crops there in 2023 (march). Also, I'm not specifically defending Stephanie Kelton but rather MMT. Because I studied mainstream economic theory at University I am interested in alternate models and MMT is probably the most interesting alternative right now. Much more realistic and pragmatic than the Neoclassical textbook (almost religious) approach.
@@jsimonlarochelle You have not replied to my statement that you are mixing up timelines when you said - "No I'm not" . The fact is you are ignoring the sequence of what happened.i.e. Kelton's statement about the economy that inflation is transitory and is a sign of "growing pains" from an economy that is emerging from a pandemic. That is what she said and that is what she tries to run away from by changing her story to what she says now. You are mixing up time lines. It is now 2024 not 2022 when she made her "growing pains" statement. Why is that not true?
Wow. This is the first interviewer who actually understood MMT well enough to ask intelligent questions! Really superb interview. I really don’t get why conservative hawks don’t get on board! MMT basically says that the Federal government can spend as much on national defense as it wants-constrained only by the possibility of inflation. And the longer we continue to spend, the greater the capacity of the defense industry to produce. This is absolutely correct. MMT is politically agnostic and correct!
I think "conservatives" don't understand MMT because they are so bamboozled by neoclassical economics.
The Strength of #MMT is that Stephanie, Randall Wray and Warren Mosler et. al are so competent at explaining it to Laymen.
I learmed MMT from watching the Sopranos.
What?
She is trying to divert what she was advocating to the politicians: Aoc and Trump. I take it she admits that MMT is delusion
Thank you for having professor kelton on great interview
Nothing of any substance again from dannywindham.
Still waiting for you to be able to explain why MMT puts across the false idea that taxes put value into money when they did nothing to put any value into money in countries where inflation made the money utterly worthless.
Danny, may I suggest your read "What has government done to our money?" by Murray Rothbard.
@@zx9mel I know all I need to know about Murray. Rothboard, no, thank you.. I find a narco capitalism indane
Such an important, dignified, inspiring, thoughtful conversation.
And I have to add that at the moment it is not just a question of numbers, it's really about the nature of the people involved in issuing it and where those numbers are actually going, and I know that war and legalised death in one way or another has been funded by those numbers, maybe MMT is not a theory, maybe it is a proper look at how the numbers in a modern economy actually works, but let's not forget where most of those numbers actually come from, they come from people or organisations taking out "loans" not at the moment from government, but from commercial banks, commercial banks are not going to be all bad, but the bigger they get the worse it seems to be
MMT is garbage derived from false beliefs dressed up as economics.
It has beliefs that include the idea that taxes put value into the money and get it acceptance when in reality taxes did nothing to put any value into of get acceptance of the money in every country where inflation made the money worthless despite those taxes.
Despite that if taxes put value into money then higher taxes would put more value into it but the reality is mostly the opposite.
It has the utterly false belief that say the money must be spent by government before taxes can be paid. Kelton herself says this.
-This is utterly wrong because most money in the economy is created by private banks who are not government and not even agents of government. That private bank money pays for most of the tax that government collects.
By all accounts the commercial real estate market is far from OK, and while I think Stephanie Kelton is definitely worth listening to, unfortunately when she talks about a post bullshit 19 recovery I know that this intelligent woman should know better
That fact that anyone, much less educated professionals, are treading this woman's ideas with a shred of credibility is concerning.
Why not? She's a professor of economics at Stony Brook University, is completely honest and makes so much sense.
@@robertsutherland7378 that’s the scariest part. This nonsense gets presented as credible because she’s got a degree.
@@LeveragedCoach Her ideas are credible because she makes so much sense, not just because she has a degree, unlike many academics, who think they deserve it(credibility) just for having one. Her views are basically unassailable, that's how they've withstood years of scrutiny and her credibility continues to grow. She deserves perhaps, the Nobel prize.
@@robertsutherland7378 they don’t make sense. That’s the point. It’s complete nonsense.
Tread lightly!
Didn't Argentina do MMT? What happened?
MMT is a description of how an economy works wrt money and taxes. You can't "do" MMT.
@@marmotsongs In other words MMT is a new name for financial disaster.
@@Rob-fx2dw No, pegging your currency to another country is the disaster, especially when coupled with supply side constraints. .
@@marmotsongs What are you getting at? No pegging to another currency? Why has that not worked? I am curious as to Where has it been done and failed or Where has it been done and succeeded? Have you done any research on that? Have you just been told that without researching it?
Sorry I just can’t abide creative thieves
Thank God i didn't send my child to Stony Brook University 😊
That was in the same basket of one of any other smart decisions you have made in your life. Good comment.
Nope. Worse off. One, because she ain't studying at stony brook, and 2. You're a sorry excuse of a parent 😂
This is just crazy thinking. Truly unreal people believe this shit.
Enlighten us.
Tell us what, exactly, is crazy. Be precise. What do you think is factually wrong in what she says?
If you can't be precise, we will know you are full of hot air.
@@jkepler1571 Stephanie Kelton has been very clear that MMT does not cause inflation. Biden has proven her wrong. People are poorer today having followed Kelton's ideas. The exact opposite of MMT expectation is the current economy. What is factually wrong or are you full of hot air?
Please explain. If you don’t do it, you’re full of sh!t.
Promo_SM
Wow, no downsides just back slapping goodness. How convenient.
No, you just have no idea what you are babbling about. You are economically illiterate.
If you're not going to engage, at least stop lying.
@@galek75 My comment was engagement and unless you can point out a lie then exactly who is lying?
@@NoPickles.4Me The lie: your entire comment. Exactly where did she say "no downsides?" I've never heard her say anything like that in all the lectures she's given.
@@galek75 These economic ideas are very new, not tested and further fly in the face of historic economic knowns. Her silence on these facts is to imply it's all sunshine with no downside. Mix in some Thomas Sowell with your MMT intake.
this is total nonsense.
Why?
Fed woman says money printer doesn’t cause inflation? Go figure. But then she would, wouldn’t she? When is she standing fo office?
Dismal science!
How does she get away with this nonsense? MMT would require Treasury to create money. It doesn't CBS make reserves, comm banks create money when they lend. MMT doesnt describe the monetary system in any way. So disappointed in such a softball interview.
@Jesus-kt5dc Regardless, bond coupons must be paid, one way or another, and it comes out of the budget.
@Jesus-kt5dc Totally wrong. The Federal Government does not print money.
The creation of new money is solely either the Federal Reserve bank or the private commercial banks who create it as loan.
All of the designated official fiat money in the economy (like the U.S. dollar) is created this way and all of it is created with debt obligation that means it has to be paid back and is paid back when the loans or bonds sold to initially get it actually mature - they all mature in time. .
Only concern these days is labelling anything that you can observe in action for yourself a theory, is a complete misnomer for aberrations in policies that are not misunderstood, not when it is a political process of misdirection of the public.
Many people following the MMT Provisioning concept have come to object to the idea of theory being necessary for knowledge to be established in Academia, as merely a matter of style.
The Measurement Problem, and Uncertainty Principle Observation approach to Actuality is pure-math empirical shaping laws in which quality becomes the start point of declaring a POV developed positioning system of innovation and design in an amorphous environment of ideas.
When the Mathemagical quantization concepts of available or allowable reference-framing containment positioning of resource management is either a severely restricted Nomenclature or message of mass distraction from the obvious inequitable circumstances, "No one is right if everyone is wrong".
Ie don't confuse value theory and promises with deception in practice of actual goods and services resource management. All the rest is Commentary.
Yes - The flat earth theory is a good example of that. Totally flawed when you observe the failed facts it is based on.
Just like MMT which is based on false facts that are shown to be false across both the history of economies that have failed and false present facts which are contradicted by the explanations of current institutions which perform those functions.
Amongst the things that MMT economists deliberatley avoid is the fact that money creation by the Central (Reserve) bank for government to spend involves as a necessity the creation of an equivalent amount of debt. That debt is a burden for private sector to repay when the treasury securities which were sold to the central bank to secure the new money.
It all has to be paid back by those in the private sector when those treasury securities mature.
Of course they can't admit that because it shows their MMT is scam of huge proportions so they leave it out of and discussion and avoid any answers if it arises.
@@knobfieldfox You only looked at part of the situation.
Firstly the securities that the Fed buys are either are sold to those in the market or paid out by the Treasury when they mature. They are the two options and you should have taken notice of the often reported announcements of the Fed that it is selling off some of its debt to reduce it's balance sheet which itself is an admission that it does not just write off debt.
Additionally if anyone writes off debt that is owed by ignoring it then there is an abuse of the principles of accounting which is essentially fraud no mater if it is digital or paper money since all money is interchangeable no matter what media it is created on. The Fed is run on bank business accounting rules and not some exclusive rules of its own.
@@Rob-fx2dw "... Paid out by the Treasury when they mature ...". - and where does the Treasury get the dollars to pay for those matured securities?
@@RKDTOO The Treasury gets its money from the taxes people pay. If you can understand basic accounts and have a basic understanding of simple mathematics you will be able to see and understand the historical records that prove this is so.
See these historical accounts from the US Whitehouse records in table 1.1:- www.whitehouse.gov/omb/budget/historical-tables/
If the records show there is balance or near so then the amount of taxes equates with the government spending. If there is an over spend then it too shows.
To say that government gets its money from anywhere else is just pure denial of fact and only fools deny facts. Even if government borrows it eventually is paid back from taxes.
Do you have a better explanation that is proven so by historical fact? I would like to see it if so.
@@knobfieldfoxIf that made sense, Zimbabwe, Argentina, and Venezuela would be superpowers.
Wow, Impressive, you got that exactly backwards, the fictional National Debt is the Economy's Savings Bank Account. 🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣Son, go back to school, you are Economically Illiterate. Any National Debt Debit is a Credit into the Economy, you act like the U.S. $25 Trillion Economy doesn't even exist. The Money of fictional National Debt is a Credit in the Private Sector.
MMT is good for stocks market…and that is it.
It's a ponzi scheme. It's not a long-term solution.
It is bad over all because it is in denial of reality and believe the government is some sort of magic god like ability and has some sort of magic powers to create wealth and solve what it can't. It is a childish fantasy devoid of reality.
If you plot the Dow Jones divided by M2 money - it's a straight line.
In other words, virtually ALL of the growth of the stock market is just people with their printed money parking it in stocks and shares . . .
AOC endorsing MMT is not a confidence booster. Why climate agenda, lets just using MMT build more entertainment, food center and music concerts- at least we can all feel good right away instead of championing for an elusive climate catastrophe decades into the future
Stoned and Broke University
Kelton pouring out absolutely false information again when she says the government is the issuer of the currency - Totally wrong and complete lie. The government does Not issue the currency but either borrows if from the Federal reserve ( theequivalent the central or reserve bank in other countries) OR taxes the private sector to get it.
This situation occurs in almost all countries under the fiat money systems which are world wide.
If you are astute enough you will have notice she provides no official explanations of this false claim.
The correct explanation fro the official sites shows she is wrong.
Take for instance this explanation from the Canadian government's official parliamentary library which outlines how fiat money comes into existence by the central bank and private banks.
It says "In practical terms, when the Bank of Canada purchases government securities at auction, it means that the Bank records the value of the securities, each of which has a unique International Securities Identification Number, as a new asset on its balance sheet. It simultaneously records the proceeds from the sale of the securities as a deposit in the Government of Canada’s account at the Bank - a liability on the Bank’s balance sheet (see Appendix, Table 1).
Since the Bank of Canada is a Crown corporation - wholly owned by the federal government, yet independent of it in the conduct of its monetary policy - the Bank’s purchase of a newly issued security from the federal government can essentially be considered an internal transaction. It records new and equal amounts on the asset and liability sides of its balance sheet, creating money through digital accounting entries.7 The federal government can then spend that newly created money in the Canadian economy as it sees fit, subject to Parliament’s approval." and then explains "Private commercial banks also create money when they purchase newly issued government securities as primary dealers at auctions. They do so by making digital accounting entries on their own balance sheets: the asset side is augmented to reflect the purchase of new securities, and the liability side is augmented to reflect a new deposit in the federal government’s account with the bank.
However, it is important to note that the majority of money in the Canadian economy is created within the private banking system every time banks extend new loans like mortgages, consumer loans and business loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money (see Appendix, Table 2).".
It adds:- "One key similarity between money creation in the private banking system and money creation by the Bank of Canada is that both are realized by simultaneously increasing the asset and liability sides of a balance sheet.".
Also it explains: As the Bank of Canada explains, its purchases of Government of Canada securities are Not a way of financing the government’s spending and debt at no cost; the federal government has to Repay the securities when they become due. "
You can see it on this site :- lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/201551E
When private banks create money much of it goes into paying taxes that are collected from wages or from excise or from sales taxes.
It has not been issued into the economy by the Federal reaserve or spent by government. Kleton's MMT economics is blind or deliberately ignores this fact to put across false story.
From Article 1, Section 8 of the U.S. Constitution: "The Congress shall have Power...to coin Money, regulate the Value thereof, and of foreign Coin..."
From Article 1, Section 10: "...No State shall coin Money..."
A later Supreme Court decision ruled that Congress had the power to issue paper currency.
So, the US government IS the sole issuer of the currency. The Fed is part of the government because the Fed was created by the US government. The legislation that created the Fed gave the Fed some independent powers so the Fed board of governors doesn't have to check with Congress for every decision it makes.
But the US government created the Fed and it could dissolve the Fed if it ever chose to do it.
And you don't know what you're talking about.
@@jkepler1571 You have missed the relevant details of today’s monetary situation in the U.S.
The Federal Reserve is the body that is responsible for stability of the currency and that has been so by law since 1913. The currency was backed by gold standard until 1971 when the link to gold was abolished.
The situation following that is almost all of the U.S. dollars are fiat credit based. The remaining less than one percent is coinage which is very small proportion and paper money which forms the cash but this is only about 2% of all of the dollars. The rest is purely credit based fiat money which has been created by the Federal reserve and private banks when they both lend to borrowers. Private banks create most of the money when they lend to their customers.
The situation is the same with almost all countries today. That includes European, Asian, African and South American countries.
The U.S. government does not issue the currency. It merely borrows it if needed from the Federal reserve or from the market when it wants to fund spending.
The money all has to be paid back on maturity when the treasury securities that government sells as method of getting that money reach their maturity date.
That is explained on many sites of government or the reserve banks of counties across the world.
Try reading this simple explanation from the official library of the Canadian Parliament to learn what happens :-
lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/201551E
The fed is part of the government. It doesn't need to get paid back ever. If the government borrows a trillion trillion dollars from the fed, and never pays it back, that's fine. It's just numbers on the feds spreadsheet
@@jkepler1571 You are wrong if you think money today is issued by the government. The creation of new money ( only about 10%) in the U.S. is done by the Federal reserve bank which creates it in response to the congress determining that the budget will be in deficit due to taxes being insufficient to provide enough money for the proposed budget. Therefore there will have to be borrowing from the Federal Reserve and /or the public through treasury bond sales. The borrowing from the Federal reserve is paid for in new digital money that the Federal reserve creates and pays the Government with. It is all fiat credit and debt based money. You can see the amount they created in the past that is still in existence. It is on their Federal Reserve balance sheet which is disclosed regularly.
The overall situation with money is that most money (over 90%)is created by private banks when they lend to their customers. It too is fiat credit and debt based.
@@jkepler1571 Oh Dear. You really are confused by these MMt self promoting scammers.
Did I say a State can coin money? No I didn't.
The Congress members do not coin money, regulate its value theref of, and of foreign coin.
They don't each produce coins in their kitchen or their workplace for others to use. They delegate power to do it.
What don't you understand about that?
Congress gave the authority to create money to the Federal reserve back in 1913. The Federal reserve bank creates new digital money to lend to the government in an exclusive contract and in exchange for Treasury securities.
Congress also intentionally created the laws to allow private banks to create new money in exchange for loan agreements from their customers.
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If you're watching this and it makes no sense, you're ready to look at and eventually buy some Bitcoin. A logical counter to this nonsense.
No, because bitcoin can't be used to pay taxes, and it's thus not a currency, so it's no more logical than gold or stocks. Now if you're attempting tax evasion, that's something else altogether.
@@robertsutherland7378why must you store wealth in currency? If something is valuable you can sell it to pay taxes.
So the trillions of dollars committed during/after Covid had zero bearing on our current inflation? Those ‘other nations’ that didn’t commit the same % had higher inflation? Did they control the reserve currency. Did the wage earners not suffer as their wage growth is not backstopped by personal money printers? MMT is a very short lived top down economic model.
She's delusional, and mmt is a ponzi scheme.
MMT is not an economic model. It is a factual description of the financial system as it actually functions now.
It does not advocate this or that policy. It is policy neutral. If I say Mars orbits the Sun farther out from Earth's orbit, I am not saying we should or should not try to go to Mars. I'm just describing reality. Whether we should go or not is a question of politics and do we have the technological capacity and the resources to go.
Here are some of the basic facts MMT points out.
Fact 1. There is only one issuer of US dollars. That is the US government. It's clearly stated in our Constitution. No other entity or person can create legitimate, non-counterfeit US dollars. So, the US can never run out of dollars. This is what everyone calls "printing" money, even though only about 10% of all US dollars are not bills ($1 bill, $5 bill, etc.). Most US dollars are dollar-denominated electronic deposits at US financial institutions.
Fact 2. This follows immediately from Fact 1: The US government does not need to borrow it's own money. The thing you call borrowing is really just a savings account at the Fed. You trade dollars that don't earn interest for dollars that do earn interest. These are called "bonds" or "Treasury notes" or "Treasury bills." That is what everyone calls borrowing.
These two simple facts are very hard for people to accept because they've been told a lie their whole lives. It's like being out on a sunny day. It's obvious that the Sun moves around the Earth. Except this is false. We know the Earth orbits the Sun. But once you understand these simple facts, you will begin to understand the financial system.
The money created during COVID was not the cause of the inflation. Or at least not the primary cause. What did people do with that money? Many people paid down their debt. If they paid down their debt, how could that money bid up prices of goods and services?
The pandemic caused delays in shipping, which caused shortages of different goods, which caused prices to rise. This would have happened even if the government didn't send people $1200 checks.
Market power also caused inflation. Why did beef prices go up so much? Did cattle ranchers get rich from this? No. Cattle ranchers sell their cows to meat processors. There are four companies that control more than 80% of the market. The companies are Tyson, Cargill, National Beef, and JBS. These companies sell the beef to the supermarkets where you buy it.
1915farm.com/blogs/education/part-3-meat-mergers-and-the-rise-of-the-big-4
They can raise prices almost whenever they want. When they saw prices of other goods going up, and when the pandemic started causing shortages of beef, they raised their prices even more simply because they have the market power to do it. But they didn't pay the cattle ranchers more money for the cows. None of the extra money you paid for beef went to the cattle ranchers. It just went to the four companies that control the market. This had nothing to do with the money created by the government. It was caused by the combination of shortages caused by the pandemic and the market power of those four companies.
ua-cam.com/video/UaY-v49RhGQ/v-deo.html&ab_channel=BloombergOriginals
In response to a question from the interviewer about inflation several years ago Kleton admits "we did get high inflation".
It shows the failure of her MMT because the 9% inflation actually occurred .
That inflation proves the fallacy of her MMT in which she says inflation will only occur when there is deficit spending and a lack of idle capacity in the economy but in that time there was no idle capacity but that 9% inflation.
No it does not. This has all been explained (including by "mainstream" economists) and she actually speaks about this in the interview. With COVID, most of the inflation was supply side inflation. You can have less inflation when there is a problem with supply along with an economic downturn if you let business go bankrupt and people loose their job but the programs to actually keep business and people afloat actually contributed very little to the inflation so it was worth it. Without the government programs (in most advanced countries) COVID would have been a far worst disaster than what we actually experienced.
One year of 8-9 percent inflation proves nothing. If it were 15-20 percent for three years, that would prove something.
@@jsimonlarochelle You are mixing up timelines and confusing what happened that which happened in 2020 and after.
Kelton's understanding of inflation after that time was not even suply side economics. Her MMT answer two years ago was that the inflation was' transitory' and a result of 'growing pains' in the economy. see this:- ua-cam.com/video/qHYHW1qI5b0/v-deo.html
No mention of supply side economics than. She was wrong then and is still wrong but in hindsight now claims she was right.
@@Rob-fx2dw No I'm not. Of course there was a delay in the inflation. During COVID the economy was slowed down everywhere. The inflation hit gradually after COVID because it took quite some time to resolve the supply issues. Also, you have to take the war and weather extreme into account. For example here in Canada a lot of our vegetables come from California so we were hit quite hard by the flooding of crops there in 2023 (march). Also, I'm not specifically defending Stephanie Kelton but rather MMT. Because I studied mainstream economic theory at University I am interested in alternate models and MMT is probably the most interesting alternative right now. Much more realistic and pragmatic than the Neoclassical textbook (almost religious) approach.
@@jsimonlarochelle You have not replied to my statement that you are mixing up timelines when you said - "No I'm not" .
The fact is you are ignoring the sequence of what happened.i.e. Kelton's statement about the economy that inflation is transitory and is a sign of "growing pains" from an economy that is emerging from a pandemic.
That is what she said and that is what she tries to run away from by changing her story to what she says now.
You are mixing up time lines. It is now 2024 not 2022 when she made her "growing pains" statement. Why is that not true?