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Thread: It's the Economy, Stupid!

  1. #191
    tWebber demi-conservative's Avatar
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    Quote Originally Posted by Starlight View Post
    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)
    It's a truism that sovereign governments cannot default in their own currency, if we take 'government' to include both the currency-issuing and currency-taxing arms. That's simply a basic fact.

    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.

  2. #192
    tWebber Teallaura's Avatar
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    Quote Originally Posted by seanD View Post
    Basically, 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.
    That 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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  3. #193
    Troll Magnet Sparko's Avatar
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    Thanks SeanD. very informative. Where did you learn all that? Do you work in the stock market or banks?

  4. #194
    tWebber
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    Quote Originally Posted by Sparko View Post
    Thanks SeanD. very informative. Where did you learn all that? Do you work in the stock market or banks?
    Self research. I had a friend who lost all her retirement during the 2008 crash, and I've been fascinated with the subject ever since.
    "I was the CIA director. We lied, we cheated, we stole, it was like... we had entire training courses. It reminds you of the glory of the American experiment." - Mike Pompeo, Secretary of State (source).

  5. Amen Teallaura amen'd this post.
  6. #195
    tWebber
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    Quote Originally Posted by Teallaura View Post
    That 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).
    The irony here is that the Fed raises rates back to "normal" during a recovery primarily to control or stop inflation (it also benefits folks outside the financial system because now they can save their money in a bank and earn higher interest benefits from their savings). Lowering rates and creating all that trillions of money will naturally cause massive inflation theoretically, which is why it's necessary to raise rates during recovery. But now the Fed is trapped. They can't normalize rates by raising them because the inflation is in the markets. Meaning that if they raise rates to curb inflation, well, then they burst the market bubble because that's where the inflation is.
    "I was the CIA director. We lied, we cheated, we stole, it was like... we had entire training courses. It reminds you of the glory of the American experiment." - Mike Pompeo, Secretary of State (source).

  7. Amen Teallaura amen'd this post.
  8. #196
    tWebber demi-conservative's Avatar
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    Quote Originally Posted by demi-conservative View Post
    I agree that if trillions of dollars are going to be printed, it's better to give it to the people Yang-style than banks.
    Less than 3 months later, Trump proposes UBI and

    I dont want to give a bailout to a company and then have somebody go out and use that money to buy back stock in the company and raise the price and then get a bonus, Trump said Sunday at the White House. So I may be Republican, but I dont like that. I want them to use the money for the workers.
    https://www.washingtonpost.com/us-po...omic-stimulus/
    They didn't want that to happen last bailout, but it happened. That's what happened too during the last tax cuts on corporations that Republicans love. Instead of stimulating the economy via 'trickle down', the corporate people just enriched themselves with stock buybacks. Minimal trickle down.

    How are you going to stop that this time, Trump? The leftists have a very real concern here.
    Remember that you are dust and to dust you shall return.

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