Tag Archives: Modern Monetary Theory

NEP’s Randy Wray’s interview in el Diario

For our Spanish speaking friends… Randy has an interview in the Spanish publication el Diario where he is talking about employment guarantee programs. You can view it here.

 

When Will the Senate Budget Committee Majority Ever Learn About Sector Financial Balances?

By Joe Firestone

There are two words that describe the Republicans’ Senate Budget Committee’s proposed budget: “dishonesty” and “austerity” for most Americans. Let’s deal with the dishonesty part first. In due course, the austerity will be apparent.

The Senate Budget Committee’s statement, entitled “A Balanced Budget That Supports Economic Growth and Expands Opportunity for Hardworking Americans,” claims to support stronger economic growth, and provide greater opportunity. We might well ask “how much growth” “growth for whom” and “opportunity for whom?”

Certainly not for me and thee, since the Senate budget projects substantially decreased Federal outlays over the decade 2016 – 2025, compared to the CBO baseline budget. This decreased Federal spending comes from:

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When Will the Congressional Progressive Caucus Ever Learn About Sector Financial Balances?

In addition to the House Budget Committee and OMB budget plans and 2016 – 2025 projections fiscal policy followers have also recently been graced with the effort of the Congressional Progressive Caucus (CPC) proposing their budget plan and 2016 – 2025 projections. The CPC budget proposal is interesting because it is definitely not intended to be an austerity budget. Instead, its authors consciously try both to achieve the goals of “fiscally responsible” low deficit budgets while turning away from austerity and towards achieving full employment, renewed economic growth, economic stability, a strengthened social safety net, greater economic equality, an improved infrastructure, and transportation system, improving the health insurance system beyond the Affordable Care Act, a greener economy, improved education and other progressive goals.

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Modern Monetary Theory

Pavlina R. Tcherneva

Pondering here from my academic station
Why has never before such a simple observation
Caused more confusion and consternation
Amongst the general population

That the government is the currency-issuing monopolist
Is not a radical idea, nor a hypothesis
It is a simple, nay, elementary fact
That is often so fervently attacked

IT conjures fears of hyperinflation
The dread of every civilized nation
A crippling phobia that stunts our facilities
To rationally think about the economic possibilities

Pundits, economists, and the average bloke
Firmly believe that the U.S. government is broke
And defend this dreadful and deadly mythology
“There Is NO Alternative,” they say, without an apology

Inequality, retirement insecurity, mass unemployment
Environmental blight, pay gap, and other disappointments
Are no longer problems intractable, alarming and eerie
With a brief introduction to Modern Monetary Theory

©March 31, 2015

When Will the White House and OMB Ever Learn About Sector Financial Balances?

In my last post I asked this same question about the House Budget Committee. As my readers saw in that one, the attempts at deficit reduction leading to budget balance were so severe that they implied that if the House budget were followed, and if the economy did not collapse before the decade projection period ended due to a collapse of aggregate demand, then private sector deficits would be produced in every year from 2017 – 2025. In addition, since the budget provided for severe cuts to federal spending designed to benefit poor people and the middle class, it was likely that the private losses from this budget would be concentrated on the people who can least well absorb them.

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Opportunities of a Millennium (Part 1)

By J.D. Alt

Viewed through the ideology of money-scarcity, the major challenges facing society appear to represent “costs” that people must be penalized to pay by taking dollars out of their personal pockets. At one level, politics is the endless and bitter argument of one party proposing to do X, Y, or Z in order to accomplish some collective benefit, and the other party saying: Yes, but how are you going to pay for it?—which is the “gotcha” question because everyone certainly “knows” that in order to actually do X, Y, or Z, the federal government will have to increase taxes or borrow dollars from the Private Sector pot. Understanding modern fiat money (and how to manage it as a collective tool) creates, as we now understand, a remarkably different and more useful perspective. With this new perspective, as we’re about to see, many of the biggest challenges we face as a collective society can be viewed not as a “cost”—a penalty to be paid—but instead as an enormous opportunity to make our lives, both collectively and individually, more effective and prosperous. Confronting these challenges, in other words, will not take dollars out of our personal pockets, it will—in addition to hopefully overcoming the challenge addressed—put dollars into our pockets. This, in essence, is the uniquely empowering perspective that modern fiat money makes possible.

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When Will CBO and the House Budget Committee Ever Learn About Sector Financial Balances?

It never ceases to amaze me that those who offer budget plans and projections never take into account the reality that their projections must be consistent with implications of trends in sector financial balances for their projections. This is a simple lesson that those playing the fiscal responsibility game never seem to learn. Certainly this is true of the Republican House Budget Committee, as we’ll see.

The Sector Financial Balances (SFB) model is an accounting identity, and these are always true by definition alone. The SFB model says:

Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0.

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Entrevista a Randall Wray

The full interview with NEP’s Randy Wray by EKO de Público TV in Spain. This is the complete interview. Questions from the interviewer are in spanish. Randy’s responses are subtitled in spanish. This was recorded on March 6, 2015 as part of his introduction of the spanish version of the Modern Money Primer.

 

Public Banking and Boom Bust Boom

By L. Randall Wray

While in Spain for the launch of my Modern Money Primer in Spanish, I gave a long interview for Public Television. Parts of that interview are interspersed in this segment on Public Banking.

My interview is in English (with Spanish subtitles) while the rest is in Spanish. Other portions of my interview will be broadcast later.

The Boom Bust Boom movie on Minsky will be released next month. Watch for it. I do not know how widely it will be distributed, but it is well worth seeing. Here’s a nice piece from the Guardian:

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The Millennials’ Money (part 3)

By J.D. Alt

Commentary on part 2, again, was extremely helpful and much appreciated. Especially useful were suggestions from readers who “didn’t recognize” my description of the Boomers ideological obsession. This got me to substantially rethink the framing, and I hope that is now fixed. What I realized—and looking back on my own experience, it seems obvious in retrospect—was that what the Boomers were focused on had little to do with the idea of “competition” and much to do with rebelling against (and distrusting) institutional power—especially the institutional power of the federal government. It became natural for them to want to starve that government to keep it from interfering with the individualism the Boomers championed. As I said in my comment to the post, “Do your own thing” seems to have morphed seamlessly into the “trickle-down” economics of federal austerity.

Draft of the next section is as follows:

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