I have already posted some blogs concerning Modern Monetary Theory (MMT) on TMV. Few readers seem to care but I will persist. One recent commentator on my last post disputed some of the ideas behind MMT because my prior posts and those I recommended within the MMT community were not fully explored or appreciated.
Some of the writers on TMV seem to be trapped in a partisan mindset with current and former Democrats and Republicans still debating as if there were any significant differences between them. Yes, both parties have their unique fetishes, but they are both controlled by the 1% criminal oligarchy. I left the world’s mind-numbing and suffocating “Matrix” some years ago and I refuse to be a shill for either bankrupt political party.
After more than 50 years of living, working, studying, observing and thinking, I have grown and changed. The idiots who believe the same crap they did when they were in their 20’s are a useless lot for humanity. I am not in awe of advanced degrees (I have 2 of them myself) and really intelligent people never attended Ivy League Institutions and a dozen other “select” universities around the country. However our ruling elites and the mass media seem to stress such narrow credentials to limit many people from entering their closed society that has a fatal grip on power within large corporations and the federal government. Rule by an arrogant and false meritocracy has been a disaster for this nation.
Too much of economics theory today is pure garbage. It has a fetish with mathematics in order to bolster its questionable credibility through needless complexity and obtuseness. Many academic “economists” and those who work in the public and private sectors did not predict the major financial and economic crashes of this or the prior century. Others are mere shills for those who pay their salaries and spout forth endless stupidity to confuse and manipulate the masses on behalf of the 1% criminal oligarchy. Much of what people take as conventional economic “wisdom” is simply crackpot pseudo-science.
“Economics” is simply an extension of politics. National Governments determine the economic systems each country assumes. The choices can be categorized but there is no “natural economic theories or law” that are discoverable as in the rest of the hard sciences. Our tax, regulatory, business and capital systems have been determined by governmental choices. Our nation has permitted an unfettered wealthy class to devolve a “free market capitalist system” into a dysfunctional, sclerotic, corrupt, crony neo-feudal system that only benefits a small number of people in our society. This was a choice – not a result of natural forces – though the political influence of wealthy and powerful sociopaths and psychopaths should be noted.
For instance, there is nothing sacred or natural to state that the sole purpose of corporations is to “maximize shareholder value.” That sociopathic statement is an opinion – and corporations (as government-created legal fictions) could be changed by any society that wishes to properly control their operations. In that the vast majority of incorporated entities exist solely to avoid legal liability and to avoid various taxes, their elevation in many areas to be equals to natural human beings is a misguided obscenity – a warped intellectual construct by a wholly corrupt and moronic U.S. Supreme Court. That the President and Congress has done nothing to alter this new reality speaks of their cowardice and total subservience to their wealthy puppet masters.
I will note two things: (1) MMT is a means of understanding how things really work but in a system that is so corrupt, bankrupt, manipulated and in denial, those who control a system even under MMT can so distort and corrupt its operations as to make it impossible to effectuate. Until we break up the criminal cartels in our society, nothing will improve. (2) Certain types of taxes do serve some important purposes in a society that fully embraces MMT. That explanation will be made in future posts and it is a point of contention I have with the article cited below.
I intend to attach the writing of many other intelligent people who explain Modern Monetary Theory. The first of many articles is yesterday’s post by Mr. Mitchell on his BlogSpot who first lists the myths and then points out their fallacies:
The single reason for the repeated US financial crises – 10/16/13
There is one reason for our repeated financial crises. No, it is not the real estate bubble burst, though that contributed, once.
No, it is not our dysfunctional Congress. In fact, Congress is functioning exactly as demanded and paid for.
No, it is not the debt limit law, which is a symptom, not a cause.
The single, underlying reason for the debt crisis is summarized in the following article:
In the year 2050, experts predict more than 80 million Americans will be over the age of 65, or double current levels. In the same timeframe, the number of “working age” Americans – those between 18 and 64 – will rise just 17%.
In other words, the problem we have today of too few workers trying to support too many retirees is going to get much worse.
The demographic realities of America’s aging population threatens to bankrupt the nation, which is already spending 22% of the federal budget on Social Security.
It’s downright calamitous for the youth of America, which is facing the prospect of sharply higher taxes to pay for entitlement programs.
Stan Druckenmiller, a legendary investor and founder of Duquesne Capital Management, (said): “I am not against seniors. What I am against is current seniors stealing from future seniors.”And there you have it, all the falsities, misunderstandings, lies and myths, with which the populace has been brainwashed, compressed into in one concise article.
The truth is federal finances are not like your personal finances:1. The United States, being Monetarily Sovereign, cannot be forced into bankruptcy.
Our government, having created the laws that created the dollar, has the unlimited ability to create more dollars. The only way the U.S. could go bankrupt is for a corrupt Congress and President to pass laws restricting this money creation.2. Given the government’s unlimited ability to create dollars, federal taxes do not pay for federal spending. Workers do not support retirees. If there was but one worker in all of America (or even zero workers), the federal government could continue to create the dollars to pay every bill, not only for retirees, but for everything the government wishes to support.
3. Spending 22% of the federal budget (or any other percentage) neither is bad nor good. With unlimited spending ability, there should be no concern about the size of any one budget item.
4. There is no need for the youth of America to pay higher taxes. Literally, there is no need for the youth of America to pay any federal taxes at all (though local taxes remain necessary). Federal taxes do not support federal spending.
In fact, federal tax payments are destroyed upon receipt. As soon as your tax dollars are removed from your checking account, they no longer are part of the U.S. money supply. They have disappeared. Government spending created dollars ad hoc.
5. Druckenmiller is clueless about Monetary Sovereignty. When today’s seniors receive Social Security, they do not steal from future seniors. If FICA were eliminated (as it should be), this would not affect the government’s ability to pay for Social Security, Medicare or anything else.
In short, the very premise of today’s financial crises — the notion that federal finances are like personal finances — is dead wrong, clearly wrong, diametrically wrong.
Austerity, aka deficit reduction, aka “balanced budget,” impacts the middle and the poor far more than it impacts the rich. Austerity widens the gap between the rich and the rest.So why do the politicians, the media and even the mainstream economists subscribe to such a damaging idea. Why do they insist on crippling America, especially the middle- and lower-income groups, for no good reason?
They have a “good” reason: They have been bribed by the rich, to widen the gap between the rich and the rest.
Being rich requires that there be a gap. If there were no gap, and everyone had the same amount of money as everyone else, no one would be “rich.” The wider the gap, the richer are the rich. So the rich pay to have the gap widened:
They bribe the President and Congress via campaign contributions and promises of lucrative employment later.
They bribe the media via their ownership of the largest media outlets. Media writers do not bite the hand that feeds them.
They bribe the mainstream economists via contributions to major universities. Gaining and maintaining tenure requires going along with the university leaders, and with being printed in the media that — you guessed it — are owned by the rich.
So with lies being blared in a continuing fire hose of misinformation, the public has been brainwashed into believing the federal deficit should be cut — brainwashed into believing that what hurts them is a good thing.
Visualize this: When the federal government creates and spends money, where does that money go? Into the economy. Federal deficits are surpluses for the economy.
The federal government is Monetarily Sovereign, and has the unlimited ability to create dollars. But, the economy is monetarily non-sovereign, and can run short of dollars.
Why then, do media writers fret about federal deficits, when they really should worry about the economy’s deficits?Their readers have been brainwashed, and the richest .1% have paid for the soap. And that is why the U.S. repeatedly has financial crises.
Rodger Malcolm Mitchell
Monetary Sovereignty
http://mythfighter.com/Mitchell’s laws:
1. The more federal budgets are cut and taxes increased, the weaker an economy becomes.
2. Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
?Until the 99% understand the need for federal deficits, the upper 1% will rule.
3. To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
4. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
5. The penalty for ignorance is slavery.
6. Everything in economics devolves to motive.
Congress has “kicked the can down the road” until early next year in yesterday’s last-minute compromise. This merely postpones the moronic national debate and it may never resolve it. Our nation has many separate views on how it should conduct its internal and external affairs. A major physical break-up of this nation may ben inevitable since we are no longer arguing facts and reality. Instead our leaders are basing their arguments on ideological and emotional grounds. Even if a strong majority of people in the country is not so extreme, it is still ignorant and clueless – ready to support whatever groups successfully push their emotional buttons.
Respectfully Submitted on 10/17/13 by Marc Pascal from Phoenix, Arizona. Here’s my list of other MMT blogs worth exploring:
• NAKED CAPITALISM is probably one of the best aggregator site of many different blogs and news sources with many posts written & edited by Yves Smith & Lambert Strether, and it strongly features MMT contributors (http://www.nakedcapitalism.com)
• NEW ECONOMIC PERSPECTIVES is the MMT site for the professors at the University of Missouri – Kansas City (http://neweconomicperspectives.org) including Michael Hudson.
• MMT Primer from UMKC http://neweconomicperspectives.org/p/modern-monetary-theory-primer.html
• MICHAEL HUDSON has his own website here (http://michael-hudson.com)
• PRAGMATIC CAPITALISM is edited by Cullen Roche (http://pragcap.com) of Orcam Financial Group in San Diego, CA.
• Social Science Research Network (http://www.ssrn.com) has a link to Mr. Roche’s well-written paper explaining Monetary Realism (AKA MMT) at this link: (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625)