By Scott Fullwiler
[Part 1] […] [Part 3] [Part 4] [Part 5]
This five part series will explore at length (warning!) and in detail (another warning—wonk alert!) the MMT perspective on the debt ratio and fiscal sustainability. While the approach suggests a macroeconomic policy mix and strategies for both fiscal and monetary policies that most neoclassical economists currently believe are unsustainable, ultimately the MMT preference for a significant role for fiscal policy in macroeconomic stabilization is shown to be consistent with traditional neoclassical views on fiscal sustainability.
This second part discusses interest rates on the national debt in the context of a currency issuer operating under flexible exchange rates. Continue reading
By Joe Firestone
MSM bloggers and cable hosts weren’t alone in creating the new wave of posts and video segments on Platinum Coin Seigniorage (PCS) at the beginning of December. The blogosphere also produced brief posts from a number of bloggers, as well as a few more substantial ones. I’ll review the brief ones in this post, and the more substantial ones in future posts, but won’t include my own recent posts on PCS during December.
Posted in Joe Firestone
Tagged #PCS, $60 T coin, debt ceiling, debt-subject-to-the-limit, fiscal cliff, Fiscal Policy, hyperinflation, inflation, MMT, Modern Monetary Theory, platinum coin seigniorage, Trillion Dollar Coin
By William K. Black
(Cross posted at Benzinga.com)
P.J. O’Rourke’s column: “Dear Mr. President, Zero-Sum Doesn’t Add Up” claims that the following metaphor explains President Obama’s world view and policy choices: “life [is] like a pizza, where if some people have too many slices, other people have to eat the pizza box.”
A zero-sum interaction occurs when one party’s gain must exactly match the other party’s loss. Continue reading
By Michael Hudson
[Part 1] […] [Part 3]
Today’s financial war against the economy at large
Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no longer military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service, and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers. Continue reading