Tag Archives: modern money theory

MMP Blog #44: The Job Guarantee and Macro Stability

By L. Randall Wray

The JG posts here at MMP have generated a huge number of comments. I have focused my responses at the comments more-or-less directly directed to the actual posted blogs. I can understand the impatience: many questions have not been answered. However many of these questions and comments concerned upcoming topics.

Let us move on to macro stability issues. I have given JG talks all over the world and the two main objections raised always refer to inflationary impacts and exchange rate impacts. It seems to me that those who respond with these fears have not paid attention to the set-up of the program and to the MMT arguments.

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Responses to Blog 41: MMT, Austrians, and Ideology

By L. Randall Wray

Sorry for the delay. I will respond to comments on my blog and also to comments on Dan Kervick’s excellent piece on MMT (part one—if I have any comments for part two I will post them after I get time to read the post and comments).

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(Re) Occupy Greece

By William K. Black
(Cross-posted from Benzinga.com)

While the Occupy Wall Street (OWS) movement set its sights on occupying a financial center, Germany has accomplished the vastly more impressive feat of occupying an entire nation – Greece.  Germany has experience at occupying Greece having done so during World War II.  The art of occupying another nation is to recruit a local puppet to do the dirty work required to repress the citizens.  Germany used several puppets, most notoriously the murderous Ioannis Rallis, to (nominally) rule Greece and terrify the Greek people during World War II.  (After Germany’s defeat, Rallis was executed for his treason.)

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The Public Money Monopoly (Pt. II)

By Dan Kervick

In Part One of this essay I defended the MMT view that the national government is the monopoly issuer of the currency in the US, and I attempted to clarify the actual economic status of that government currency with respect to the Fed’s conventional balance sheet accounting.   In this concluding part of the essay I will further develop the contrast between the government’s role as currency issuer and the role of private sector households and firms – including commercial banks – as currency users.  I will then make a few points about how the government supplies currency to the non-governmental sectors of the economy before concluding with a discussion of several topics that tend to engender resistance to the very idea that such a currency monopoly exists.

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The Public Money Monopoly (Pt. I)

By Dan Kervick

Modern Monetary Theory (MMT) emphasizes the central role of governments in sovereign monetary systems.  MMT co-developer Warren Mosler has described the US dollar system, for example, as a “simple public monopoly.”    L. Randall Wray has written that, “In the United States, the dollar is our state money of account and high-powered money (HPM or coins, green paper money, and bank reserves) is our state monopolized currency.”   Sometimes this crucial MMT claim is expressed more broadly by saying the US government is the monopoly supplier of “net financial assets” to the non-governmental sectors of the dollar economy.

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William K. Black: 2nd ‘German Occupation of Greece?

DAVID BROOKS ALMOST GETS MMT: Sovereign Currency is a Tax Credit

By L. Randall Wray

In an interesting post today David Brooks wrote this:

“You might say that a tax break isn’t the same as a spending program. You would be wrong. David Bradford, a Princeton economist, has the best illustration of how the system works. Suppose the Pentagon wanted to buy a new fighter plane. But instead of writing a $10 billion check to the manufacturer, the government just issued a $10 billion ‘weapons supply tax credit.’ The plane would still get made. The company would get its money through the tax credit. And politicians would get to brag that they had cut taxes and reduced the size of government!”

He then goes on to rail against tax credits, not quite recognizing the major intellectual breakthrough he has made.

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