Monthly Archives: January 2013

THE PERMANENT FLOOR 2004

Posted on January 18, 2013 by Scott Fullwiler | 14 comments

The discussion over the permanent floor has led to a (in my view) fantastic post from Steve Randy Waldman. His key conclusions regarding how interest on reserve balances works are the following: Continue reading →

14 Comments

Posted in Scott Fullwiler

Tagged MMT, Modern Monetary Theory, permanent floor

MMT and Social Norms

Posted on January 18, 2013 by Devin Smith | 125 comments

By J. D. Alt

Chris Hayes’ recent MSNBC show on the Trillion Dollar Coin brought four aspects of the Modern Money debate, for me at least, into a clearer focus. I list them here not in their order of appearance on the show, but in their order of importance and logical connection.

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125 Comments

Posted in J. D. Alt

Tagged MMT, Modern Monetary Theory, resource constraints, Trillion Dollar Coin

The Great Austerity Swindle!

Posted on January 18, 2013 by Devin Smith | 21 comments

By Joe Firestone

Our Congresspeople, corporate CEOs, tea partiers, most economists, Pete Peterson’s minions, and even our President, tell us that we’re running out of money; and that if we can’t keep running huge deficits, and increasing our national debt forever, because eventually, our creditors will just cease lending us our dollars back.

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21 Comments

Posted in Joe Firestone

Tagged #mintthehvpcs, $60 T coin, austerity, Fiscal Policy, grand bargain, great betrayal, HVPCS, MMT, Modern Monetary Theory, platinum coin seigniorage, Trillion Dollar Coin

Blocking a bad idea that enriches the rich: Peterson, Austerity, and the Washington Consensus

Posted on January 17, 2013 by Devin Smith | 13 comments

By William K. Black

John Williamson, a Peterson Institute “senior fellow” coined the term “the Washington Consensus” at a conference in 1989.

Williamson joined the Institute in 1981 when it was founded. Pete Peterson is the Republican billionaire from Wall Street who has dedicated his life to proselytizing for lower taxes on the wealthy, stringent spending cuts in social programs, and privatizing Social Security – the unholy grail of Wall Street that would provide our largest banks with hundreds of billions of dollars in additional investment fees. Peterson has funded many groups to evangelize for these neo-liberal dogmas.

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13 Comments

Posted in William K. Black

Tagged austerity, neo-liberal doctrine, peterson, washington consensus

Understanding the Permanent Floor—An Important Inconsistency in Neoclassical Monetary Economics

Posted on January 16, 2013 by Scott Fullwiler | 156 comments

By Scott Fullwiler

I’ve written numerous times already about how a deficit “financed” by bonds vs. “money” doesn’t matter in terms of inflationary effect. Notwithstanding my views there (which are not discussed in this post), the point of this post will be to explore the neoclassical paradigm on this matter, since this is at the core of the recent debate between Steve Randy Waldman (see here, here, and here) and Paul Krugman (see here and here) on the so-called “permanent floor.” (It might be of interest to some that I explained how a “permanent floor” would work back in 2004.)

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156 Comments

Posted in Scott Fullwiler

Tagged krugman, MMT, Modern Monetary Theory, neoclassical inconsistencies, permanent floor, QE, Waldman

Some One Penny Bets

Posted on January 16, 2013 by Devin Smith | 63 comments

By James Stuart

This post is not about the TDC, although I am a big fan. This is about putting into the MMT conversation a different point of view about Obama. Most MMTers seem to think that the President is a Trojan Horse – attractive on the outside; dangerous, even lethal on the inside. I have a different perspective. What I often do now, when I disagree with someone, instead of arguing, I make one penny bets. The bets need to be about something definite and measurable. If I win, my position on the issue may not be proven, but it is at least partially vindicated.

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63 Comments

Posted in Guest Blogger

Tagged deficit ceiling, MMT, Modern Monetary Theory, obama, republicans, sequestration

MMT Movie: Economics for Dummiez

Posted on January 16, 2013 by Devin Smith | 16 comments

By Donna D’Souza (Trixie)

16 Comments

Posted in Guest Blogger

Tagged MMT, Modern Monetary Theory

German growth goes negative but Merkel’s press becomes more glowing

Posted on January 16, 2013 by Devin Smith | 9 comments

By William K. Black

It is good to be Angela Merkel. Growth in Germany goes sharply negative in the last quarter of 2012 and press reports emphasize how sound the German economy is because it is a net exporter. This article analyses how the Wall Street Journal and the New York Times presented the news about Germany’s economy. I show that the presentation reveals more about the pathologies of our major media than about the pathologies of Germany and the Eurozone.

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9 Comments

Posted in William K. Black

Tagged austerity, beggar thy neighbor, Eurozone, germany, mainstream media, merkel

Obama commits Unilateral Disarmament as a Debt Ceiling Negotiator

Posted on January 15, 2013 by Devin Smith | 23 comments

By William K. Black

President Obama is getting ready to negotiate (or if you believe him, not negotiate) an extension of the debt limit. The Republicans control the House and are promising to follow Donald Trump’s suggestion that they use what he called the “nuclear weapon” to terrorize the U.S. economy and people in order to gain negotiating leverage over Obama. That act of treachery was designed to produce two other acts of betrayal of the American people. First, Trump’s urged the Republicans to use their “nuclear weapon” to force Obama to inflict austerity on our Nation and force us back into recession. Second, Trump urged the Republicans to use their leverage to force Obama to gut the safety net. It is somehow fitting that Trump’s advice to act in unprincipled manner was designed to produce policies that would enrich the wealthy and cause immense harm to the Nation.

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23 Comments

Posted in William K. Black

Tagged austerity, debt ceiling, debt limit, grand bargain, great betrayal

The Political Economy of the Coin and the Debt Ceiling

Posted on January 14, 2013 by Devin Smith | 21 comments

By Matthew Berg

A fateful Saturday in January

On Saturday afternoon, the White House ruled out using platinum coin seignorage as a way to defuse the political crisis caused by Congressional Republicans’ unwillingness to raise the debt ceiling. In the words of press secretary Jay Carney:

“There are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default.”

Continue reading →