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MMT and the mother of all bubbles
Posted on 5/20/22 at 11:36 pm
Posted on 5/20/22 at 11:36 pm
When this chapter of our history is written people will look back on it and wonder how we were so naive to believe in modern monetary theory. They will say it fueled the greatest bubble in the history of bubbles and a global pandemic was the pin that popped it.
It’s one hell of a story that will be written
It’s one hell of a story that will be written
Posted on 5/20/22 at 11:46 pm to WaWaWeeWa
quote:
how we were so naive to believe in modern monetary theory
So what is the financial / monetary system we should believe in?
Posted on 5/20/22 at 11:50 pm to CollegeFBRules
quote:
So what is the financial / monetary system we should believe in?
Don’t fall into the trap of believing this was inevitable and there was no better route.
I’m not advocating for a particular system. That’s not the purpose of this thread. I don’t have to describe a better system to see that the current system has a predictable end.
This post was edited on 5/20/22 at 11:52 pm
Posted on 5/21/22 at 12:02 am to WaWaWeeWa
See, there is the problem with a thread like this. You purport the current system is so flawed that it is laughable that anyone would buy into it without even having a shred of a clue what a better system would be.
Modern monetary theory has led to the wealthiest and healthiest global population ever known to human history, yet you claim it is laughably idiotic.
Yes, I absolutely think you have to have a better idea of the system people should be using in order to have a perspective on why the one we do use is so ridiculous.
Modern monetary theory has led to the wealthiest and healthiest global population ever known to human history, yet you claim it is laughably idiotic.
Yes, I absolutely think you have to have a better idea of the system people should be using in order to have a perspective on why the one we do use is so ridiculous.
This post was edited on 5/21/22 at 12:12 am
Posted on 5/21/22 at 3:53 am to CollegeFBRules
quote:
So what is the financial / monetary system we should believe in?
The problem with MMT is that it operates from a fallacy that central planners can A. actually control something as complex as a global economy and B. that the people in charge of such a thing are competent and operating in your best interests.
We would be in significantly better shape as a whole if the idea of BitCoin can be made to work. A store of value outside of control or manipulation by gov’ts. Is that likely? Doubtful as it would mean the end to the power that most gov’ts have. Simpler would be a gold standard. Let the market regulate itself. We don’t need gov’t to do it.
Posted on 5/21/22 at 4:55 am to Aubie Spr96
quote:
BitCoin
Can you imagine what our economy would look like if the government was not taking away 30% of what people earned? Imagine a world where the consumer decided where that money was spent and not some elected bureaucrat. What if instead of sending $40 billion to Ukraine the taxpayers would spend that money here in our country.
Reduce government by half and back our currency against something of value.
The economy would flourish.
Posted on 5/21/22 at 5:16 am to WaWaWeeWa
While I have posted for a long time that the pandemic spending of Trump (and later Biden) became a real killer for MMT, this thread really isn't doing a good job b/c we didn't get into "MMT" levels of spending until Trump.
The post-2009 crash support was more easy credit more than federal spending. You'd be better off going Austrian to explain it than trying to pigeon-hole MMT into this.
The post-2009 crash support was more easy credit more than federal spending. You'd be better off going Austrian to explain it than trying to pigeon-hole MMT into this.
Posted on 5/21/22 at 6:19 am to CollegeFBRules
quote:
Modern monetary theory has led to the wealthiest and healthiest global population ever known to human history, yet you claim it is laughably idiotic.
Wrong. Our gold backed dollar led to the greatest economy ever. Then we took that system and started fricking with it and the wheels slowly started coming off and then we dumped jet fuel in the gas tank and are riding it until the engine blows up.
Why do you think bitcoin and cryptocurrencies are a thing? Because people are losing faith in MMT. They don’t believe the farce either and realize it’s not sustainable.
Your only defense if that I don’t have a better system. I was trying to avoid having the conversation go there but since you insist I will answer. The appropriate system was our economy before it was decoupled from the dollar with the Breton-woods agreement.
This post was edited on 5/21/22 at 6:20 am
Posted on 5/21/22 at 6:28 am to CollegeFBRules
It is correct to say that we decide what has value. That could be gold, tulips, toothpicks, etc.
In MMT we are essentially saying the paper itself has the value. Well when you can double the amount of paper notes in a matter of months on a whim then the system has no value. How can someone invest in that system when it can be diluted instantaneously by a vague group of unelected officials?
Once people lose faith in this system, which is already happening, or there is a better option, it will implode and implode very quickly since it’s entirely a faith based system.
In MMT we are essentially saying the paper itself has the value. Well when you can double the amount of paper notes in a matter of months on a whim then the system has no value. How can someone invest in that system when it can be diluted instantaneously by a vague group of unelected officials?
Once people lose faith in this system, which is already happening, or there is a better option, it will implode and implode very quickly since it’s entirely a faith based system.
Posted on 5/21/22 at 6:55 am to WaWaWeeWa
quote:
Once people lose faith in this system, which is already happening, or there is a better option
It doesn’t have to be an all or nothing transition. If China all of a sudden demands the Yuan for payment of their goods it will increase the worth of their currency. Russia is doing this exact same thing in requiring the ruble for energy.
The dollar is still the best option out there but I can see it slipping. We aren’t the first currency to lose the title “world reserve currency”.
Posted on 5/21/22 at 7:51 am to CollegeFBRules
quote:
Modern monetary theory has led to the wealthiest and healthiest global population ever known to human history,
Wrong. That was capitalism.
MMT has only gained traction in the past few years since they’ve been hiding inflation in a “creative” CPI. Then when they started going nuts with it in 2009 and it didn’t create inflation, bartenders started believing in it. Took longer than expected but here we are with MMT making inflation uncontrollable. Shocker.
Posted on 5/21/22 at 8:46 am to Aubie Spr96
quote:That's a hard pass for me. Bitcoin would be too disruptive to the market.
We would be in significantly better shape as a whole if the idea of BitCoin can be made to work. A store of value outside of control or manipulation by gov’ts
Posted on 5/21/22 at 8:51 am to UpstairsComputer
quote:
Wrong. That was capitalism.
Hang on, so the argument now is we are no longer capitalist?
Posted on 5/21/22 at 9:47 am to WaWaWeeWa
quote:We? It’s some obscure theory that only SOME economically-illiterate people on the far left believe it?
how we were so naive to believe in modern monetary theory.
Posted on 5/21/22 at 10:32 am to WaWaWeeWa
Per Wikipedia:
“ MMT says that governments create new money by using fiscal policy and that the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector.”
So, in other words:
Flood money into the system without regard to consequences and then when things go bad, tax the crap out of people.
Seems like a good system.
“ MMT says that governments create new money by using fiscal policy and that the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector.”
So, in other words:
Flood money into the system without regard to consequences and then when things go bad, tax the crap out of people.
Seems like a good system.
Posted on 5/21/22 at 10:49 am to ChEgrad
quote:
So, in other words:
Flood money into the system without regard to consequences and then when things go bad, tax the crap out of people.
Seems like a good system.
Seems like the left will accept any theory that results in more centralized control, regardless of the consequences of that theory.
Posted on 5/21/22 at 10:57 am to sawtooth
quote:
Reduce government by half and back our currency against something of value.
That would drive everybody to hoard. Hard money systems are worse than what we currently have. The opposite of flourishing would happen
Posted on 5/21/22 at 10:59 am to CollegeFBRules
quote:
Hang on, so the argument now is we are no longer capitalist?
Capitalism is a theory so no
Posted on 5/21/22 at 11:59 am to wutangfinancial
MMT suggests that inflation can be curtailed by reducing government spending and raising taxes.
Shove that in the face of every MMT liberal whenever they talk of raising taxes.
Shove that in the face of every MMT liberal whenever they talk of raising taxes.
Posted on 5/21/22 at 12:06 pm to CollegeFBRules
quote:MMT results in inflation that erases that wealth.
Modern monetary theory has led to the wealthiest and healthiest global population ever known to human history
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