Tag Archives: MMT

The “Debt Crisis” According to Bruce Bartlett: Debt Thresholds, and Wars

Posted on March 10, 2015 by Joe Firestone | 2 comments

This is the fourth in a series of commentaries on Bruce Bartlett’s recent testimony to the Senate Budget Committee. I appreciated his testimony and his critical evaluation of the idea that there is a public “debt crisis” in the United States. I also agree that there is no debt crisis. However, I was disappointed that his views, for the most part, did not show the across the board relevance to most aspects of the “debt crisis” of the fact that the United States is a fiat currency sovereign.

In the previous three posts, I’ve outlined the many contexts in which the fiat currency sovereignty of the United States is relevant to showing that the idea that the United States has or can have a debt crisis is just bunk. In this post, I’ll continue my discussion of Bruce Bartlett’s testimony in the same way.

Continue reading →

2 Comments

Posted in Joe Firestone

Tagged austerity, Bruce Bartlett, debt crisis, debt to GDP 90% threshold hypothesis, MMT, Modern Monetary Theory, Reinhart and Rogoff, sectoral financial balances, Thomas Herndon

Randall Wray: ¿Austeridad presupuestaria frente a déficits públicos?

Posted on March 9, 2015 by Devin Smith | 2 comments

Why the EMU is designed to Fail

Randy’s presentation for FUHEM in Madrid, Spain coinciding with the release of the spanish version of his Modern Money Primer. The introductions are in spanish and Randy speaks in english beginning at about 10:00 with a panel member translating to spanish. He presents Modern Money Theory and then what is wrong with the Euro/EMU.

2 Comments

Posted in L. Randall Wray

Tagged austerity, FUHEM, MMT, Modern Monetary Theory, spain

The “Debt Crisis” According to Bruce Bartlett: Household Analogy, Inflation, Savings, and Taxes

Posted on March 9, 2015 by Joe Firestone | 4 comments

In the first two parts of this series of commentaries on Bruce Bartlett’s testimony to the Senate Budget Committee, I’ve reviewed the first 8 paragraphs in his statement. These points debunked various concerns of those who think the United States has a serious “debt crisis” it must handle before it takes on trivial problems such as its unprecedentedly high level of wealth inequality, lack of true full employment at a living wage, roughly 30 million people still lacking health insurance, one of the worst infrastructure systems in the developed world, transitioning from fossil fuels and ending climate change, creating a first class public educational system from pre-K through graduate school, ending the student loan crisis, creating a single standard of law for all, including the various categories of violators categorized as too big to prosecute by recent Administrations, and ending the student loan debt crisis, just to name a few.

However, what was noticeably missing from the variety of arguments given in his eight paragraphs was a recognition that the United States is a fiat sovereign nation and that this fact has serious implications for most of the subject matter Bruce Bartlett covers in his statement. In this post I’ll continue my analysis of his statement to explore the extent to which his views correspond to Modern Money Theory (MMT).

Continue reading →

4 Comments

Posted in Joe Firestone

Tagged Bruce Bartlett, crowding out, debt crisis, Household analogy, inflation, loanable funds market, MMT, Modern Monetary Theory, savings, Senate Budget Committee, Taxes

Why Understanding Money Matters in Greece

Posted on March 8, 2015 by Devin Smith | 18 comments

By Robert W. Parenteau
March 06, 2015

As Greece staggers under the weight of a depression exceeding that of the 1930s in the US, it appears difficult to see a way forward from what is becoming increasingly a Ponzi financed, extend and pretend, “bailout” scheme. In fact, there are much more creative and effective ways to solve some of the macrofinancial dilemmas that Greece is facing, and without Greece having to exit the euro. But these solutions challenge many existing economic paradigms, including the concept of “money” itself.

At the Levy Economics Institute conference held in Athens in November 2013, I proposed tax anticipation notes, or “TANs”, as a way for Greece to exit austerity without having to exit the euro (see “Get a TAN, Yanis!” published here last month, for an updated version of that policy proposal). This proposal is based on a deeper understanding of what money actually is, and the many roles that it plays in the economies we inhabit. In this regard, Abba Lerner captured the essence of modern fiat currencies, which are created out of thin air by modern states with sovereign currency arrangements. Lerner’s essential insight is contained in the following passage from over half a century ago (and, you will note, Lerner’s view informs much of the neo-chartalist view espoused by advocates of what is called Modern Monetary Theory):

Continue reading →

18 Comments

Posted in rob parenteau

Tagged greece, MMT, Modern Monetary Theory

The “Debt Crisis” According to Bruce Bartlett: Fiat Sovereignty

Posted on March 6, 2015 by Joe Firestone | 16 comments

Today, I’d like to offer the first of three commentary posts on Bruce Bartlett’s recent testimony before the Senate Budget Committee. Bruce Bartlett is a long-time veteran of the fiscal policy wars. He initially became known as a supply-side free market economist working for Ron Paul and then Jack Kemp in the 1970s. Later, he served as a senior policy analyst in the Reagan Administration, and then in the Bush 41 Administration as the deputy assistant secretary for economic policy at the Treasury Department. Since then he’s worked at conservative think tanks and as a well-known writer on economic policy and politics, becoming increasingly critical, first of the Bush 43 Administration and then of the increasingly rightward trend of the Republican Party. Today I think Bruce Bartlett is best characterized as a fiercely independent voice still respected in conservative circles, and also, among progressives such as Jamie Galbraith and Stephanie Kelton, but never afraid to call balls and strikes on any Administration or Congress as he sees them.

Continue reading →

16 Comments

Posted in Joe Firestone

Tagged Bruce Bartlett, debt crisis, debt repayment, Fiat Sovereignty, MMT, Modern Monetary Theory, Senate Budget Committee

Will We Ever Get Change if We Keep Electing People Who Represent Special Interests?

Posted on March 5, 2015 by Joe Firestone | 4 comments

We can see the positioning and the messaging on the Democratic side beginning to take shape for the 2016 elections. Bernie Sanders and Elizabeth Warren with nods to Thomas Piketty and various economists have stepped forward to offer the themes of salvation for the middle class, moderating the extremes of inequality in American society, and doing something real about jobs and wages.

Clinton World seems to be responding, not yet with forthright statements from Hillary Clinton, but recently with articles by stalwarts of neoliberal Clintonism (and veterans of the Obama Administration) such as Larry Summers and Peter Orszag, expressing concerns about inequality and proposing measures to alleviate it, even including increased taxation on the wealthy.

Continue reading →

4 Comments

Posted in Joe Firestone

Tagged bernie sanders, Clinton World, full employment, Hillary Clinton, inequality, Larry Summers, MMT, Modern Monetary Theory, Peter Orszag, President Obama

The Millennials’ Money Pt. 1

Posted on February 26, 2015 by J.D. Alt | 21 comments

By J.D. Alt

The ebook Diagrams & Dollars has been a top-seller on Amazon (in the category “macroeconomics”) for over a year now. There have been many requests for a paper-back version. In deciding to undertake that mission, I started to expand the original long essay into something that would be more book-like in length—and before I knew it, the effort morphed into something else: a different “frame” for the whole argument. The new “frame” evolved as I was reading Millennial Momentum by Morley Winograd and Michael D. Hais, which views U.S. history from the perspective of a repetitive cycle of four archetypal generations. Every eighty years or so, this cycle repeats, beginning with a “civic” generation—and each of these “fourth turnings” (as they are referred to in the book) is accompanied by dramatic, traumatic, social upheaval. When the upheaval is finally resolved, the “civic” generation is firmly in control, and things settle down, but with a dramatically changed social structure. The “civic” generation that is now leading us into the next “fourth turning” are the Millennials—the children of the baby-boomers—and they now, specifically, are the target audience for the book.

Before I complete—or even decide to publish—the book, I’d be grateful for feedback and responses to some key sections of it. With that in mind, this is the first of several posts presenting these key sections for comment by the NEP readers.

Continue reading →

21 Comments

Posted in J. D. Alt

Tagged millennials, MMT, Modern Monetary Theory

The Spanish Launch of Modern Money Theory

Posted on February 25, 2015 by Devin Smith | 1 comment

By L. Randall Wray

Sorry, I’ve been very busy in recent weeks, finishing up a book on Minsky and revising my Modern Money Primer for a second edition (more on both of those projects later).

Meanwhile, Lola Books is gearing up to release the Primer in Spanish next week. I’ll be in Madrid for the launch and for a series of meetings. I’ll give two presentations that are open to the public. Details are below. Hope to see our Spanish friends there!

Continue reading →

1 Comment

Posted in L. Randall Wray

Tagged MMT, Modern Monetary Theory, modern money primer

Return of the Coin?

Posted on February 13, 2015 by Joe Firestone | 8 comments

By Joe Firestone

The last few weeks have seen at least two posts calling attention to the potential use of the platinum coin in America’s political economy. The first to appear was Rob Urie’s piece in Counterpunch provocatively titled: “The Trillion Dollar Catshit Coin” And the second was Mike Sandler’s post in The Huffington Post called “Greece and the U.S. Senate: Economics for the 99%.

Let’s begin looking at these with Sandler’s effort. He reports on two challenges to austerity. The first is from Syriza’s victory in Greece and its promise to Greek voters that it will end austerity. The second:

The austerity mindset faces a new foe in the U.S. Senate as well. The re-shuffle of the last U.S. election that put austerity-minded Republicans in power has ironically resulted in a new anti-austerity economist being hired by Senator Bernie Sanders (I-VT) in the Senate Budget Committee — Professor Stephanie Kelton of the University of Missouri-Kansas City. Professor Kelton is a proponent of Modern Monetary Theory (MMT), a very pro-stimulus economic approach. Her hiring represents the biggest step forward for MMT, since the PR coup of the Trillion Dollar Platinum Coin in 2013. At that time, Kelton reportedly created the #mintthecoin hashtag that was featured in columns by Paul Krugman and others.

Sanders’ hiring of Kelton is a break from the more conciliatory “balanced budgeting” approach of some Democrats, such as former treasury secretaries with ties to Wall Street and fiscally-conservative “deficit hawks.” Kelton and her MMT colleagues go beyond the traditional Keynesian stimulus of short-term deficit spending. They seek to unleash the power of monetary policy to circumvent the scarcity mindset imposed on government action, perhaps even bringing the Trillion Dollar Coin back into the discussion.

Of course, Sandler means to say fiscal policy in the above, since MMT economics greatly favors reliance on fiscal, rather than monetary policy, in spite of the “monetary” in its name. But apart from that, he projects that we may see the platinum coin come back into prominence soon. Continue reading →