Tag Archives: modern money theory

Neoliberalism Kills: Part One

Posted on October 18, 2012 by Devin Smith | 17 comments

During the run-up to passage of the Affordable Care Act (ACA), I wrote a number of posts here, here, and here assessing the ACA very negatively, and pointing out the shortcomings of the various versions of this bill, preceding its final passage. My focus was on contrasting varying versions with HR 676, the Conyers-Kucinich Medicare for All bill, in relation to its likely impact on fatalities, bankruptcies and divorces attributed to lack of health insurance coverage in the US.

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17 Comments

Posted in Joe Firestone

Tagged budget deficits, debt burden, MMT, modern money theory, paul krugman, trade deficits

Paul K’s Strange Logic

Posted on October 17, 2012 by Devin Smith | 62 comments

By Joe Firestone

In an October 12th Post entitled “Foreigners and the Burden of Debt,” Paul Krugman made the following comment.

”. . . we’d all agree that deficits make us poorer if they crowd out investment spending — which they would if the economy were near full employment, but won’t if we’re deeply depressed. All we have to do is realize that net foreign investment — purchases minus sales of assets from and to foreigners — is also a form of investment. Or to put it a bit more simply, sure, budget deficits can make us poorer as a nation if they lead to bigger trade deficits.”

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62 Comments

Posted in Joe Firestone

Tagged budget deficits, debt burden, MMT, modern money theory, paul krugman, trade deficits

These Folks are Soooo Clever . . .

Posted on September 26, 2012 by Devin Smith | 87 comments

Last week, Reps. Michael Honda, Keith Ellison, Raul Grijalva, Jan Schakowsky, John Conyers, Barbara Lee and Lynn Woolsey stalwarts of the Congressional Progressive Caucus (CPC) begged for mercy from “the Gang of Eight” in a letter.

Here’s what they said and my commentary on their “loser liberalism.” Continue reading →

87 Comments

Posted in Joe Firestone

Tagged debt issuance, deficit reduction, deficits, fiscal cliff, MMT, modern money theory, national debt, PPCS, Proof Platinum Coin Seigniorage, Ratings Agencies, Trillion Dollar Coin

Promises for America

Posted on September 21, 2012 by Devin Smith | 17 comments

By Joe Firestone

The polling since the conventions shows that Democrats are doing better than expected. President Obama now apparently has a clear lead over Mitt Romney. Democratic Party control of the Senate seems likely to survive this election year of many more Democratic rather than Republican Senate seats up for election. And, even in House races, it looks like the Democrats will pick up a number of seats; though whether they can pick up enough seats to take back the House is still an unlikely prospect, and without the House President Obama’s second term is likely to be much like his last year and three-quarters, rather than his first two years.

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17 Comments

Posted in Joe Firestone

Tagged deficit reduction, deficits, MMT, modern money theory, national debt, Promises for America

Alan Grayson’s Right; But He Misses the Larger Point

Posted on September 14, 2012 by Devin Smith | 9 comments

By Joe Firestone

Alan Grayson’s e-mail on Moody’s warning that it might reduce the US’s AAA rating, suggested that Moody’s was either threatening a downgrade because it wants to get the Bush tax cuts for the rich extended, or, alternatively, that “Moody’s is living in what Aristophanes called “Cloud Cuckoo Land.”” He says this because Moody’s is upset about the possibility that the US may go over the so-called “fiscal cliff,” even though if it did, it would theoretically result in $560 Billion of deficit reduction annually, without further legislative changes, and it makes no sense on the surface for a ratings agency to think that the risk of US bond default is greater when the annual deficit is being reduced by $560 B per year, than by some lesser amount, which is likely to happen if Congress doesn’t take us over that “cliff.”

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Posted in Joe Firestone

Tagged 14th Amendment, Alan Grayson, Bill Mitchell, bond vigilantes, debt issuance, deficit reduction, deficits, fiscal cliff, Mike Norman, MMT, modern money theory, Moody's, national debt, PPCS, Proof Platinum Coin Seigniorage, Ratings Agencies, Standard & Poor's, Trillion Dollar Coin

No Plan B?

Posted on September 12, 2012 by Devin Smith | 11 comments

By Joe Firestone

Bob Woodward’s releasing a new book, so we are now seeing articles based on it. A few days back, The Washington Post published the “Inside story of Obama’s struggle to keep Congress from controlling outcome of debt ceiling crisis.” This account is a pretty downbeat one of how our political leaders and President Obama handled the debt ceiling crisis of the summer of 2011. I want to comment on what for me was the most salient point: that during the crisis, the President had no “Plan B” to get around the debt ceiling beyond negotiating a deal with Congress.

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11 Comments

Posted in Joe Firestone

Tagged 14th Amendment, Bob Woodward, CNN, debt ceiling crisis, deficit reduction, deficits, entitlements, grand bargain, Jack Balkin, MMT, modern money theory, national debt, paul jay, PPCS, President Obama, Proof Platinum Coin Seigniorage, Social Security, Trillion Dollar Coin, Yves Smith

No, Barack, It Just Ain’t Gonna Happen!

Posted on September 9, 2012 by Devin Smith | 13 comments

By Joe Firestone

Who else thinks the President’s speech didn’t include any plans to create the 29 million full-time jobs for the dis-employed? Please raise your hand!

About jobs he said:

”We can help big factories and small businesses double their exports, and if we choose this path, we can create a million new manufacturing jobs in the next four years.” Continue reading →

13 Comments

Posted in Joe Firestone

Tagged Bill Mitchell, debt-to-GDP ratio, deficit reduction, deficits, Digby, entitlements, grand bargain, MMT, modern money theory, national debt, paul krugman, President Obama, sectoral financial balances model, Social Security

MMP Blog 50: MMT Without the JG? Conclusion

Posted on May 28, 2012 by Mitch Green | 131 comments

By L. Randall Wray

Sorry for the interruption of the blog. Originally I had planned 52 blogs, one-year’s-worth, although along the way I added a few so that we would have run about 13 months. Here’s why: the blogs came from a book manuscript, the Modern Money Primer. The idea was that you would not only be a test audience, but that your questions and comments would allow me to revise the manuscript as we went along. And that worked. I think the manuscript was much improved because of this blog. You helped write the book.

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131 Comments

Posted in L. Randall Wray, MMP

Tagged ELR, job guarantee, MMT, Modern Monetary Theory, modern money theory

MMP Blog 48: IS THE JOB GUARANTEE NECESSARY?

Posted on April 29, 2012 by Mitch Green | 92 comments

By L. Randall Wray

Over the past 11 months, or so, we have examined Modern Money Theory. This is the proper paradigm for analyzing all modern countries that use their own currency.

Some have wondered whether we can separate MMT from the Job Guarantee (JG): can one accept MMT while rejecting the JG?

To be honest, I find this to be a rather strange question. We have a modern theory of Bubonic Plague. Until medical science developed a theory of disease that can be caused by microbes too small to be seen with the naked eye, all sorts of explanations of the cause of the Plague were offered. The most popular was “bad air”. The preventative measures offered (quarantine of affected individuals, evacuation of cities, burning of the property of the deceased), and improvement of public sanitation actually were quite effective—indeed, in the richer countries the plague was almost banished even before the “germ” theory of disease was ever developed. (To be sure, there were false starts—such as killing cats, that had helped keep rats in check!)

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Posted in L. Randall Wray, MMP

Tagged job guarantee, Modern Monetary Theory, modern money theory

MMP Blog #45: The JG and Affordability Issues with Special Considerations for Developing Nations

Posted on April 8, 2012 by Mitch Green | 12 comments

By L. Randall Wray

Affordability Issues. As we have seen over the course of the previous 44 blogs, a sovereign nation operating with its own currency in a floating exchange rate regime can always financially afford an JG/ELR program. So long as there are workers who are ready and willing to work at the program wage, the government can “afford” to hire them. It pays wages by crediting bank accounts. If it credits more accounts than it debits through tax payments, a deficit results. This initially takes the form of net credits to the banking system, held as reserves. If the reserve holdings are excessive, banks bid the overnight rate down. The government can then either choose to let the overnight rate fall toward zero (or its support rate if it pays interest on reserves), or it can intervene to sell interest-paying bonds at the desired support rate; this will drain excess reserves. In no sense is the government spending on JG/ELR constrained either by tax revenues or the demand for its bonds.

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