A perceptive reader wrote: “I think MMT needs someone to do whatever it is that Charles Darwin did.”

Well, Darwin wrote “On the Origin of Species”. A great book. Not something your average homeless Burger King taxi driving immigrant is reading. Yes, someone needs to teach evolution to the taxi drivers. Heck, I wish someone would teach evolution to my local Kansas School Board officials—who reject it as “just a theory” and obviously a poor competitor to the story of creation that is by contrast infallibly true.

But we need the “Origin of Species” first, before those teachers and popularizers and monkey trial lawyers (who, of course, LOST their case) can win in the court of public opinion.

The MMP is responding to a request for a coherent, from the ground up, exposition. I have asked several times for patience. Both by those who’d rather just take to the streets now, and from those who want everything explained all at once in an elevator pitch. If at the end of the year you want your money back, tuition refunds will be provided. If you do not need a Primer, go ahead and start the organizing. If you are not interested in MMT, look elsewhere. But if you want a clear and coherent Primer that begins at the beginning, you’ve found the right URL.

On to substantive comments.

Accounting Identities. I knew we would have our skeptics. There are two types of complaints.

First there are those who are skeptical of identities altogether. To them it looks like we put two rabbits into the hat and then pulled out two and expect applause. Or, it is like saying 2+3=5 and in base 10 math it cannot be anything different. Surely we rigged the results?

Well, in some sense, yes we did. We first rule out black helicopters that drop bags of cash into backyards in the dark of night. We also rule out expenditures by some that go “nowhere”—that is, expenditures that are not received by anyone. Finally, we rule out expenditures that are not in some manner “paid for”. If our whole economy consists of you and me (I get to be Robinson Crusoe, you get to be Friday—or vice versa), then if I spend, you get income. If you spend, I get income. I can consume or save, and you can consume or save. We denominate our spending and income and saving and surpluses and deficits in “dollars” and record transactions by scratch marks on the big rock by the pond. We’ve discovered double entry bookkeeping and use it because it is a handy way of keeping track. (We trust each other, but we’ve got bad memories. I accept your IOUs denominated in dollars, and you accept mine.) Ok, so that is the set up—the rabbits and the hat. Nothing up our sleeves.

You hire me to collect coconuts from your trees, I hire you to catch fish in my pond. You own the coconuts, I own the fish—due to our property rights in our respective resources; as workers we only have a right to our wages. (Ain’t capitalism grand?) We each work 5 hours at a buck an hour. We record these on our balance sheets on the big rock: on your balance sheet, your financial asset is my IOU; my financial asset is your IOU. At the end of the first day we each had income of $5 (recorded on our asset side) and we each issued an IOU to pay wages of $5 (recorded on our liability side). (On my balance sheet I hold your $5 IOU as my asset; and I have issued my IOU to you in the amount of $5, which I record on my liability side. And vice versa.)

Now I want to buy coconuts from you and you want to buy fish from me. I “pay for” the coconuts by delivering back to you your IOUs and/or I issue an IOU. You “pay for” fish by delivering back to me my IOUs or by issuing an IOU. Let us say I consume $5 worth of coconuts (I return all $5 of your IOUs—crossing off the entry on the Big Rock) and you consume $4 worth of fish (returning to me $4 of my IOUs and retaining $1 of my IOU) because you are more frugal.

At the end of the day, I’ve got $5 worth of coconuts but have had to issue a an IOU of $1 (I used all of my income, the $5 earned wages, and you’ve still got $1 of my IOU since you did not spend all your wages); you’ve got $4 of fish plus $1 left of your income (equals your financial saving). My deficit spending has been $1 and your surplus (or saving) has been $1. They are equal (not magically—we put the rabbits in the hat), and indeed your saving accumulation takes the form of a money claim on me (my debt). When we net out all the money claims, what we are left with is the real stuff (coconuts and fish).

To be sure, we have left out of this analysis much of what is interesting about the economy—no banks, no government, no “green paper” currency, and so on. All we did was to play a little game of IOU and UOMe. But we did demonstrate the simple sectoral balance conclusion: the financial deficit of one sector (me) equals the surplus of the other (you). And that once we net out the financials, we are left with the real stuff (fish and coconuts). No magic involved.

And, yes, we can all of us accumulate in real (nonfinancial) terms. For example, we can all grow our own crops in our backyards, accumulating corn that is not offset by a financial liability. For most of the time humans have been around (after Darwinian evolution) we managed without money. Still, we fed, clothed, cared for, and fought with, our fellow humans. For the most part, the “Modern Money Primer” will be concerned with “money”—that is, the financial accounting part, and it is here where every deficit is offset by an equal surplus (somewhere) and every debt is held by someone as financial wealth—so the net is zero. In terms of our Lake Wobegone analogy, we can all accumulate in real terms (we all have IQs above zero) but our finances net to zero (our IQs average to—well—average).

Second, some readers have preferred to come up with alternative identities. Yes, you can do that. We can choose to divide up into alternative sectors: rather than going with private domestic + government + foreign, we could divide into sectors according to hair color: blonde + black + red + blue + brown + silver etc…. For our purposes (to come in subsequent blogs) our division is more useful. It is not unusual to separate off the foreign sector on the basis that it (mostly) uses a different currency (actually, multiple currencies), so we are going across exchange rates. It is also not that unusual to separate government from private, and is particularly useful in discussion of “sovereign currency”—which after all is the main purpose of this Primer. For convenience we add state and local government to the federal government even though only the federal government is the issuer of the sovereign currency. What is, admittedly, unusual is to add the households and firms together (as well as not-for-profits). This is in part due to data limitations—some data are collected this way.

One reader perceptively noticed that a more common approach is to begin with the GDP identity (GDP = consumption + investment + government purchases + net exports; which equals gross national income). Without getting overly wonky, the GDP comes out of the NIPA accounts (national income and product accounts) that have some well-known disadvantages for those of us who worry about stock-flow consistency (the topic of future blogs). NIPA actually imputes some values and things don’t quite add up (a rather large and nasty “statistical discrepancy” is used to fudge to get to the identity). Just as one example: most Americans own their own homes, but certainly we all “consume” what is called “housing services”—the sheer enjoyment we get out of having some shelter over our heads in a rain storm. So statisticians “impute” (make up some economic value for that enjoyment), adding it to GDP. What we do not like about that is that no one really has to “pay for” the consumption of “housing services” for owner-occupied housing (say, you paid off your mortgage 5 years ago, but the statistician records $12,000 worth of enjoyment you consumed this year). Another area that is problematic comes in the treatment of saving. Typically, this can be done in one of two ways: either saving is simply a residual (your income less your consumption) or it is the accumulation to your wealth. In many calculations, when there is a real estate price boom, the value of the housing stock increases, which means our wealth increases, which must mean our saving increased. However, there was no income source that allowed us to save in financial terms.

Since this Primer is very concerned about “accounting for” all spending, all income, all consumption, and all saving, we do not want to include such imputations that do not have a financial flow counterpart. So, we prefer to work from the flow of funds accounts, which are stock-flow consistent (or, at least, closer to consistency). Now, in truth, NIPA data are more readily available for many countries than are flow of funds data, and so sometimes we do use the GDP equation rather than our sectoral balances equation. Here is a comparison:

Domestic Private balance + Government balance + Foreign balance = 0

(Saving – Investment) + (Taxes – Govt Purchases) + (Imports-Exports) = 0

You can see that these are reasonably close approximations. Roughly, if private saving exceeds investment, then the private sector will be running a surplus; if taxes are less than government purchases, the government is running a deficit; and if imports exceed exports the foreign sector is running a surplus. We can get even more wonky and put in government transfer payments (things like unemployment compensation that add to private sector income) and international factor payments (flows of profits earned by American firms from abroad—that reduce our foreign imbalance). But we won’t do that here. We will usually work from the sectoral balances (thus, flow of funds) rather than from the GDP identity (NIPA) but you can do the mental gymnastics if you want to do the conversion.

One commentator wondered why we would call an “imbalance” a “balance”: ie: if the private sector runs a deficit why would we refer to that as the private sector’s “balance”? Well, you have a checking account “balance” that is probably positive. If you write a check for more than your “balance” and if you have automatic overdraft coverage then you will now have a negative “balance” in your account! So, the “balance” can be either positive, zero, or negative for any sector.

A final note regarding NAFA: I would just say that NAFA is the standard term from the stock-flow consistent literature, which, if Ramanan’s correct, ironically started in the UK. See Zezza’s paper here, which, independent of MMT, uses the same terminology. Further, it’s a term completely consistent with the accounting measure desired, while there’s not necessarily any reason to name items the exact same way as one particular nation’s accounts do (“net saving” being another example).

Thanks for the comments. Keep them coming. Watch for Blog 3 next Monday.

26 Responses to MMP BLOG # 2 RESPONSES

  1. "Surely we rigged the results? Well, in some sense, yes we did. We first rule out black helicopters that drop bags of cash into backyards in the dark of night."It may be ruled out, but what happens if that is allowed (getting rid of the central bank credo that all new medium of exchange has to be the demand deposits from debt)? There is the currency/demand deposits with no bond/loan attached."To be sure, we have left out of this analysis much of what is interesting about the economy—no banks, no government, no “green paper” currency, and so on."Add productivity growth or anything else that can increase the amount of goods and services available to the economy."For the most part, the “Modern Money Primer” will be concerned with “money”—that is, the financial accounting part, and it is here where every deficit is offset by an equal surplus (somewhere) and every debt is held by someone as financial wealth—so the net is zero."Does every deficit have to be debt?"Second, some readers have preferred to come up with alternative identities. Yes, you can do that. We can choose to divide up into alternative sectors: rather than going with private domestic + government + foreign, we could divide into sectors according to hair color: blonde + black + red + blue + brown + silver etc…. For our purposes (to come in subsequent blogs) our division is more useful."Right. I hope everyone will find this useful, relevant, and realistic:savings of the rich = dissavings of the gov't (preferably with debt) plus dissavings of the lower and middle class (preferably with debt)Notice the two with debt, which should lead people to the retirement market.I'm hoping you can get around to showing that most of the problems in the economy is due to medium of exchange, specifically too much debt.

  2. I'm not sure you got the point that people were making about the word 'balance'The suggestion is that people associate the word with a stock. i.e. the balance of my bank account as you have done above at least twice in your response.I know you don't want to re-write your whole nomenclature but it does confuse the hell out of people. Honest !

  3. This Paolo Rossi Barnard. One last time.a) You state this is a "a coherent, from the ground up, exposition". Fine. You still don't state what's its purpose. It's not for "your average homeless Burger King taxi driving immigrant" (and saleswoman, and physician, and history teacher, and hotel owner and…). So? Is it to empower a small group of future MMT organizers? Or just to fill a niche in the brain of a bunch of readers and MMT fans? A "coherent, from the ground up, exposition", yes, excellent, but to achieve what, may I ask?b) The history of human social development, Prof. Wray, has taught us one and only one thing worth quoting here (and worth for you to keep very well in mind): in democracies without your average Burger King taxi driving guy (and saleswoman, and physician, and history teacher, and hotel owner…) embracing thinkers' ideas, nothing would've ever changed. Voltaire, Hegel, Marx, Gandhi or M. L. King would have fizzled out into insignificance without millions of "average" persons understanding them and organizing around their philosophies.So, may I suggest that the final purpose of this exercise is to create a net of MMT organizers with first and foremost in their mind "your average homeless Burger King taxi driving immigrant" (and saleswoman, and physician, and history teacher, and hotel owner and…)? Thanks.

  4. Thanks. I didn't expect the NAFA technicality to get attention since it was just a technicality. I had learned about it (NAFA versus Net Lending) from a paper at Levy by Claudio Dos Santos.

  5. Warren's book 7 Deadly Frauds is pretty good as is Rodger's Money for Free.

  6. Thanks, Ramanan!

  7. Paolo Rossi Barnard,I'm very happy to see this primer taking form! I agree that its audience is inherently limited, but I think something planned and structured in this way to maximize breadth with minimal repetition is significantly preferable to the typical blog post format for those learning MMT. I found it very frustrating and inefficient (time-wise) to learn MMT mostly from blog posts in which only a tiny percentage of posts expanded the breadth of my exposure to MMT content.And yes, solid content such as this will empower others. (For example, my personal effort has been to try to present the concepts visually… I have a "Macroeconomic Balance Sheet Visualizer" that a few people have found very helpful, and I've recently picked up the pace of my [slow] progress on a second visual tutorial intended for a wider audience…)

  8. In my experience, MMT is not really very difficult to explain to anyone who comes to it with an open mind. I have explained it to family members who were thoroughly indoctrinated in "mainstream" thinking by various colleges and business schools. I have explained it to co-workers and friends. I haven't met a single person who hasn't been more-or-less amazed and impressed by it. So, in my estimation, and in spite of my great admiration for what Paolo has written and done, I think his analysis of the problem is one-sided.It isn't any deficiency in intelligence, education or erudition that prevents our brainwashed fellow-citizens from understanding MMT. It's the brainwashing itself, exacerbated by the lolling indifference of the bought-and-sold corporate media. In other words, I don't think the fact that MMT has yet to catch fire out there has a great deal to do with it being too complicated, too technical or too hard to understand. It's just hard to get it a fair trial.Another person commenting here compared it to the problem faced by Darwin's theory of evolution. I think that's apt. Like evolution, the two great challenges MMT has to face are its counter-intuitiveness and the fact that it contradicts a deeply entrenched, widely shared and thoroughly dogmatic belief system. So, yes, one task we face is to make MMT even easier to understand than it already is. But we won't break the dogmatic grip of "mainstream" theoclassical economics by simplicity alone.Darwin himself took a different tack – he took pains to point out not the easiest route to his conclusion, but the most difficult. He drew out the elements of his theory that he knew to be the most counter-intuitive, the most objectionable and the hardest for most people to accept. Chief among these was the challenge posed by the apparently irreducible complexity of organs such as the human eye. Adopting a line of argument that was very common in his day, he asked, "What good is half an eye?" And then he proceeded to explain exactly, and in excruciating detail, why a half-as-good, or even one-tenth-as-good eye was almost infinitely preferable to no eye at all.Taking this approach, explaining MMT to a skeptical listener would start at Darwin's own starting point. So, what is the very most counter-intuitive, most objectionable and hardest-to-accept assertion made by the entire theory? And I would like to nominate: "No one will ever have to pay off the national debt." For initially, surely, this assertion is almost impossible for most people to entertain, let alone believe. It seems to defy not only common sense, but even common decency. It sounds positively immoral. "Not pay our debts? What kind of freeloading, free-lunching liberal Socialist would *dare* to advocate a thing like that?!?!"And sure, for many people, this conversation-starter is an automatic conversation-ender too, but that's an important thing to ascertain early on. Because, just as was the case for Charles Darwin, there are inevitably going to be a very large number of people who will just flat-out refuse to listen to our "heretical" opinions. Trying to convince the truly brainwashed is, sadly, a waste of our precious time. But if we can get a fair trial for this one, specific, impossibly radical idea, then we may very well be able to win our whole case. If we can get someone to understand and accept this single, straightforward and readily explainable truth, I believe we will have essentially won that person over.

  9. And here's our case, largely abstracted from longer testimony co-authored by James Galbraith, Warren Mosler and Professor Wray:It is a widely understood and completely non-controversial fact that, since 1971, all dollar-denominated wealth, whether held as cash, held in demand deposits at banks or held through the ownership U.S. Treasury securities has consisted of absolutely nothing but the government's I.O.U. The sum total of all these I.O.U.s constitutes the so-called "national debt". So-called. For while it is technically correct, in accounting terms, to identify this mass of privately held dollar wealth as a liability of the federal government, it is incorrect, and simply false, to compare this liability to the liabilities of private individuals, firms or households. For one thing, no private party has any legal (or moral) obligation to pay one single penny of the government's liability. It is not money we owe. It is money we are owed. "We" being all holders of U.S. government debt – which is only to say, U.S. dollars.It is an easily-verified empirical fact that the national debt of the United States has increased in virtually every fiscal period since the founding of the Republic. Each of the six short periods when this was not the case was promptly followed by either a recession or a full-blown depression. This was as true of the period following the much-vaunted Clinton surpluses of the late 1990s as of any earlier case. And, faced with the recession of 2001, the Bush government didn't hesitate to do the usual thing – pass a substantial stimulus bill and add it to the deficit. Nothing bad happened on account of this. Inflation was negligible. The economy recovered. By 2006 the unemployment rate was down around five percent. Just as with Nixon in 1971 and with Reagan in 1984, Bush demonstrated that when Republicans' political prospects are endangered by a bad economy, no principle interferes with their pragmatic application of prescriptions originally recommended by John Maynard Keynes. And it will be an enduring irony of this period of our history if the only American politician of his generation to say honestly that "deficits don't matter" turns out to have been Dick Cheney.Except in unusual circumstances that are easy to identify and avoid, deficits don't matter. Under all normal circumstances, government budget deficits are, in fact, necessary in order to accommodate the private sector's desire to save a portion of its income. It is normal and desirable that people and companies accumulate financial assets while the federal government accumulates the corresponding liabilities. This is a balance sheet identity in no way dependent on theory or ideology. On the other hand, it is unhealthy and positively dangerous to unleash the opposite dynamic, where the government taxes more than it spends (runs a surplus) even as firms and households accumulate excessive debt. It is this dynamic that is truly and perilously "unsustainable". And, again, the source of this conclusion is standard double-entry bookkeeping and nothing else.No one will ever "pay off" America's "national debt." It should be clear, even from this very brief discussion, why no country ever retires, or ever attempts to retire, its "national debt." Doing so would amount to national economic suicide.

  10. "No one will ever "pay off" America's "national debt." It should be clear, even from this very brief discussion, why no country ever retires, or ever attempts to retire, its "national debt." Doing so would amount to national economic suicide."This is where I disagree with MMT as I understand it.I don't see any reason why an all currency with no loan/bond attached economy is not possible.savings of the rich plus savings of the lower and middle class = dissavings of the currency printing entity with currency and no loan/bond attached plus the balanced budget(s) of the various level(s) of gov'tInstead I see:savings of the rich = dissavings of the gov't (preferably with debt) plus the dissavings of the lower and middle class (preferably with debt)Another thing is why should anybody have to make the interest payments.

  11. The complement of the Domestic Private sector in the Domestic sector would naturally be called Domestic Public sector.Therefore, is 'Domestic Public' synonymous to 'Government'?It seems it is not. The expression Domestic Public sector raises problems of classification that appear sterile. Are civil servants in the Public sector? Or are they in the Private sector, their services being bought by Government? Are pensioners in the Public sector?So, Government rather than Domestic Public seems a very sensible choice.Notwithstanding, it entails that the word 'Private' in 'Domestic Private' carries no real meaning.Therefore, one may want to simplify the designations of the two sectors: Domestic and Foreign.That, in turn, raises the question: is the Government truly a sector?In a democracy, government should be conceived as a delegation of people's power.This delegation includes the power to manage the common good known as money. In particular, the power to issue or destroy currency.That, in turn, makes the expressions government's deficit or government's surplus senseless, as the government, being invested with the power to be a currency issuer, is not a currency user. The surplus / deficit concept only applies to currency users.

  12. I've taken a slightly different tack to explaining the national debt – by showing that it isn't a debt.The line I take is this.The government owns the central bank. If you own a bank you can get an effective zero percent loan from that bank – any interest you are charged comes back to you as bank profit.So why would an entity that owns a bank want to borrow money directly from third parties at a positive interest rate when it can get the same money via the central bank at nothing?

  13. hbl: "No one will ever "pay off" America's "national debt." It should be clear, even from this very brief discussion, why no country ever retires, or ever attempts to retire, its "national debt." Doing so would amount to national economic suicide."Anonymous: This is where I disagree with MMT as I understand it.I don't see any reason why an all currency with no loan/bond attached economy is not possible.Yes, I agree, and I do think you're within MMT paradigm.If all outstanding bonds were "switched" to currency, then that's not a big deal. The interest would drop to zero, ok, so this is a monetary policiy issue.However, if all outstanding bonds would be removed from the economy (using government surpluses) and not replaced with currency, then that would amount to national economic suicide. I think that's what hbl meant. Am I understanding things correctly?

  14. All: To clarify (quickly) 4 points raised above.1. On the use of the word "balance"–yes it can be positive, zero, or negative both in the case of flows (over time) and stocks (point in time). Looking at the domestic private sector, if it runs a surplus over the year (saving = positive balance of flows) it will accumulate a positive balance in its checking account (savings {note the "s" at the end} = positive balance in checking account) that is the stock. Flows accumulate to stocks.2. Paolo: OK fine you probably do not need the Primer. But recall that you and I had some dozen or dozens of hours of phone calls working through the details. I cannot do that with everyone who wants to learn MMT. And you are perhaps right that this Primer is not written for the taxi driver. But I think there is an Italian taxi driver reading the Primer so let us see what she thinks.3. Government vs Public vs Domestic Public: I am not sure I catch the reader's concern. Surely it is not controversial to say that there is a public authority that spends and taxes; let us call that "government". Yes government has some employees and it also pays out through contracts to individual firms. Government is "domestic" both in terms of its authority and (usually) in the currency it issues. Much more on that in coming weeks.4. NAFA: NAFA is Godley's term, from whom I learned it. And frankly I think it is much better–accumulation of financial assets. To call this "lending" is confusing to most people. I can certainly accumulate US Treasuries as NAFA; to say I "lend" US dollars to the issuer of US dollars (the US Treasury) is misleading.LR Wray

  15. In May 2010 an Italian nurse, Mariarca Terracciano, married with 2 babies, staged a protests against the horrendous pay cuts enforced on her and colleagues. She said "You are draining our blood like this, so I'll drain my own real blood every day until the State recognizes this injustice". She lay on a stretcher at her hospital for 2 weeks doing that. She died alone and ignored. Only a few days earlier a French clerk had set himself alight on his commuter train back home. He didn't have the courage to tell his wife he'd been made redundant. Farmers suicide in the US is an epidemic. In Idia it's a catastrophe.MMT is a LIFE SAVING EMERGENCY, not your exciting titillating mental exercise for this year. You got me? Did you get this Prof. Wray? Would you guys have justified Alexander Fleming and his fans if they'd amused themselves with the discovery of Penicilling on a bunch of blogs, instead of marching on to make it known to everyone?So now: I call for all those engaged in this MMP, to make a commitment, a real commitment, to become MMT ORGANIZERS as soon you feel comfortable with the theory. That is: making contacts with all sorts of workers organizations and civil groups to tell them that a life saving, Nation saving, alternative is out there and people who are doing the suffering must know, now!One day it will have to be: "Dear Congressman/woman, my vote is for MMT and Full Employment, or forget it." I'm dead serious, I'll never forget Mariarca.

  16. p.s. The above is Paolo Rossi Barnard

  17. LR WrayRe 'balance'.I don't want to get bogged down on this so I will shut up after this post.We understand that 'balance' as used can be a flow or a stock and we also understand/think that MMT developers would be very reluctant to stop using the word as a flow because the phrase 'sectoral balances' is now an important concept.We are merely pointing out that it confuses newcomers who have enough problems already getting to grips with the basic material.We seem to be heading down the balance sheet route so pretty soon 'sectoral balances' will mean both stocks and flows which ain't gonna help matters.Right thats it. Its been highlighted so I'm happy. I will now shut up.I'm looking forward to the next chapter.Cheers

  18. Prof. Wray is right. Paolo Barnard too. But Paolo grasped the urgency of the matter!!!! And I’m going to explain a simple concept to tell why we must stop quarrelling and starting seriously to work together. Think as a Business Company: MMT is our productEconomists are our product engineers, technical service and after sales department Policy makers are our dealers, agencies, fittersCommunicators, filmmakers, journalists, opinion leaders are our sales department Who is the customer? The enduser. Who benefits of our product? Who is the real core of MMT? who moves money, works, buys, sells?People, all people. You can say “Mankind”. The target of a business company? SELLING THE PRODUCT TO CUSTOMERSHow? Very strong sales actions to create DEMAND through promotions focused on BENEFITS.Sales department must be able to answer to the following question “why should I buy this?” and “How much does it cost?” It’s hard to sell a product spreading technical data sheets…the problem is not the language. And you cannot simplify a wiring diagram actually, or the fitter won’t be able to install it. The problem is who is refered to: not to the customer. “how it works” is good for culture, to deepen the matter, but absolutely not necessary…I don’t know how is made my washing machine, but I will kill anyone who’s willing to take it away… ”what is that for?” To clean clothes… ok!You can make a comparison between a washing machine and another one, but you have to stress benefits and costs. People are not stupid. Economics is everyday life. It’s not philosophy. A potential customer will look for a dealer to buy it: “do you sell MMT?” Noo ”Fu…you!“do you sell MMT?” Yes “very good, here’s my money – vote”. The technical Service is trying to increse the number of technicians and improve their knowledge…this Primer is very well done and very usuful. But we are missing the Company target: increasing demand, selling the product!No dealer will join us in partnership: no business with us.We need a sales department.Chiara

  19. unfortunately, MMT doesn't quite apply to Europe; not until the ECB, or some organization, takes control of all the member states' fiscal & taxing abilities.words don't cut it for explaining stuff; have a look at some of these links explaining the essence of the matter. you've clicked on the link, surf the sidebar for other stuff; lots of decent, easy explainers.okl

  20. I understand everyone's concern over tragedies with the Austerity throughout most of the Western World & coming to Japan again soon. I sympathise and empathise.However, to go back to the Modern Money Primer Tab, it clearly states "the way that money “works” in sovereign countries".It doesn't tell you what to do with it once you know how it works as Bill Mitchell makes clear in a recent post: guess my point is there could easily be two sets of "MMT organizers". One that does what Paolo Barnard wants & recommends and another group that understands it all just as well and wants something else which may very well oppose the outcomes that Paolo Barnard wishes to achieve.My understanding is that's not the point of the Primer, to politically motivate people (that's their own business), the idea is to show how MMT works (the operational detail). What you do with it, is up to you.I'm happy to be corrected by other MMT advocates or LR Wray if I'm mistaken.

  21. Senexx,"the idea is to show how MMT works (the operational detail). What you do with it, is up to you."So Jonas Salk has the polio vaccine and says: "The idea is to show how this vaccine works. What to do with it is up to you". You fine with that?Paolo Rossi Barnard

  22. Perhaps an MMP post that puts together in one place MMT's position on non-traditional monetary tools that clearly distinguish and properly distance MMT spending and "money printing" from QE is helpful. Right now, people who don't know any better, or those who want to mischaracterize MMT, lump it with all other so-called "Keynesians", so the drawback of these 'money printing' and 'Keynesian' prescriptions get blamed on MMT. I know Scott already has several posts on it, but perhaps a summary.

  23. Paolo, if I may call you that, I do not wish to get bogged down in a debate. However, the polio vaccine does only one thing. It seems the cervical cancer vaccine does two. Modern Monetary Theory has a much broader utility than both those.

  24. Senexx, MMT has one and only one priority: lift millions out of misery while restoring the State to its democratic functions after 35 years of Neoliberal onslaught. What to do with it is just that, if it has to make sense for living human beings. P. R. Barnard

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