To further clarify, QE to inject trillions into the market is the same thing as printing trillions of dollars, except that physical printing is not involved. Instead, digital ones and zeroes are added to accounts.
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Originally posted by seanD View PostFolks continue to believe we're in a free market system I guess just out of ignorance this is going on. This is actually not too far from MMT that the leftist socialists are endorsing, maybe because they too are ignorant this is going on.
A) Stock market growth is not primarily driven by companies doing well, but by money printing.
B) GDP growth is not primarily driven by economic sectors doing well, but by money borrowing.
The only difference compared to MMT is that borrowing is currently sufficient to address GDP growth.Remember that you are dust and to dust you shall return.
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Originally posted by seanD View PostI was being sarcastic.
I should have put "free market capitalist economy" in quotes. It's ANYTHING but free market capitalism. Folks continue to believe we're in a free market system I guess just out of ignorance this is going on. This is actually not too far from MMT that the leftist socialists are endorsing, maybe because they too are ignorant this is going on.
<goes to look up MMT>"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot
"Forgiveness is the way of love." Gary Chapman
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So. I looked up MMT... I think my brain is on fire now..."He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot
"Forgiveness is the way of love." Gary Chapman
My Personal Blog
My Novella blog (Current Novella Begins on 7/25/14)
Quill Sword
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Originally posted by Teallaura View PostSo. I looked up MMT... I think my brain is on fire now...
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Originally posted by seanD View PostYou can clearly see the causation of all this. It has nothing, or very little to do with Obama or Trump.
So voting based on how the economy is currently doing is silly, yet people don't seem to understand this, and seem to want to reward / blame politicians for how the economy is doing.
Originally posted by demi-conservative View PostTo further clarify, QE to inject trillions into the market is the same thing as printing trillions of dollars, except that physical printing is not involved. Instead, digital ones and zeroes are added to accounts.
Obama toyed for a while with the idea of giving it to the people, but finally concluded the Republican congress was never going to vote for it. That might have made a massive difference (depending on how you think it would have played out given your economic views). The banks had given people loans to buy houses that they couldn't afford to repay, so as the people defaulted (and were evicted) the banks were collapsing. QE saved the banks but left the people defaulting and being evicted. If the money had gone to the people, they could have used it to pay their loans and save their homes, and that would have in turn meant banks didn't default.
Money given to the people gets used differently (pays bills, buys food, buys goods etc) than money given to banks to be loaned out (buys houses, starts companies etc), so you get potentially quite different effects when you do standard QE and give money to banks than if you printed money and gave it to the general population. The Reserve bank here in NZ is toying with the idea of trying the give money to the population option, and I strongly support trying that."I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
"Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
"[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein
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Originally posted by Teallaura View PostSo. I looked up MMT... I think my brain is on fire now...
People used to assume printing too much money caused hyperinflation, and were very afraid of doing so as a result. But actually, it doesn't appear to do so. (No one seems very sure what does cause hyperinflation, but it appears to have something to do with political instability.)
So MMT suggests governments should go nuts printing money and use that as their own primary source of money rather than taxes. In turn they can go nuts with their expenditures. It suggests they should only need to resort to taxes if inflation is getting too much. (I am personally skeptical of MMT, but I do think that reserve banks have kept inflation too low in the Western world for the past 40 years or so and that this has had negative consequences, so I am open to MMT insofar as I am fine with increased inflation to a reasonable extent)"I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
"Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
"[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein
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Originally posted by Starlight View PostIndeed. Modern politicians have, rightly or wrongly, decided to take a largely hands off approach to the economy and do little to affect its workings, leaving it all to reserve banks to deal with.
So voting based on how the economy is currently doing is silly, yet people don't seem to understand this, and seem to want to reward / blame politicians for how the economy is doing.
I would note that it's important (probably) who that money is given to after it is printed. In the current QE systems, it's given to the banks.
Obama toyed for a while with the idea of giving it to the people, but finally concluded the Republican congress was never going to vote for it. That might have made a massive difference (depending on how you think it would have played out given your economic views). The banks had given people loans to buy houses that they couldn't afford to repay, so as the people defaulted (and were evicted) the banks were collapsing. QE saved the banks but left the people defaulting and being evicted. If the money had gone to the people, they could have used it to pay their loans and save their homes, and that would have in turn meant banks didn't default.
Money given to the people gets used differently (pays bills, buys food, buys goods etc) than money given to banks to be loaned out (buys houses, starts companies etc), so you get potentially quite different effects when you do standard QE and give money to banks than if you printed money and gave it to the general population. The Reserve bank here in NZ is toying with the idea of trying the give money to the population option, and I strongly support trying that.
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Originally posted by Starlight View PostSo voting based on how the economy is currently doing is silly, yet people don't seem to understand this, and seem to want to reward / blame politicians for how the economy is doing.
I would note that it's important (probably) who that money is given to after it is printed. In the current QE systems, it's given to the banks.
Obama toyed for a while with the idea of giving it to the people, but finally concluded the Republican congress was never going to vote for it. That might have made a massive difference (depending on how you think it would have played out given your economic views). The banks had given people loans to buy houses that they couldn't afford to repay, so as the people defaulted (and were evicted) the banks were collapsing. QE saved the banks but left the people defaulting and being evicted. If the money had gone to the people, they could have used it to pay their loans and save their homes, and that would have in turn meant banks didn't default.
Money given to the people gets used differently (pays bills, buys food, buys goods etc) than money given to banks to be loaned out (buys houses, starts companies etc), so you get potentially quite different effects when you do standard QE and give money to banks than if you printed money and gave it to the general population. The Reserve bank here in NZ is toying with the idea of trying the give money to the population option, and I strongly support trying that.Last edited by demi-conservative; 12-31-2019, 03:28 AM.Remember that you are dust and to dust you shall return.
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Originally posted by Starlight View PostSo MMT suggests governments should go nuts printing money and use that as their own primary source of money rather than taxes. In turn they can go nuts with their expenditures. It suggests they should only need to resort to taxes if inflation is getting too much. (I am personally skeptical of MMT, but I do think that reserve banks have kept inflation too low in the Western world for the past 40 years or so and that this has had negative consequences, so I am open to MMT insofar as I am fine with increased inflation to a reasonable extent)
Problems only arise when it is assumed that that means governments can 'just print whatever it takes'. It's easy to increase money supply, but in reality much tougher to reduce it by increasing taxes.Remember that you are dust and to dust you shall return.
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Originally posted by seanD View PostBasically, it's the same thing I described earlier, only instead of all that created money going to the banks and the financial system, it goes to a government institution which then distributes it out to the main economy -- to build infrastructure, create "green" jobs, technology investment, etc. The problem with this is inflation. The inflation has been tempered during the 4.5 trillion fiasco because it didn't flow out into the main economy, it inflated the bond and equity market and stayed there. So technically the inflation is in the markets, not the main economy (though even the CPI doesn't represent true inflation, but that's another story), but this obviously wouldn't be the case with MMT."He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot
"Forgiveness is the way of love." Gary Chapman
My Personal Blog
My Novella blog (Current Novella Begins on 7/25/14)
Quill Sword
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Originally posted by Teallaura View PostThat explains something I hadn't understood in a video I was watching on why the CPI is a scam (its title, not my conclusion). The gist was that had the methodology not been changed the economy would show a much higher inflation than reported. It makes much more sense if that inflation is in the financial markets (economy?) since the levels indicated aren't reflected in main economy (pretty sure people couldn't buy toothpaste anymore if it were).
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