MMT
AOC# and MMT Spook the AEI
William K. Black January 17, 2019 Bloomington, MN AOC# drives Republicans berserk. Booing her, and only her, at the ceremony admitting the members of Congress, raging at her for dancing – yes dancing – in a college video, and attacking … Continue reading →
The post AOC# and MMT Spook the AEI appeared first on New Economic Perspectives.
Functional Finance, MMT and Blanchard's Presidential Address
So Olivier Blanchard gave the AEA presidential address at the Atlanta meetings earlier this year. If you missed it you can watch it here. The paper is also here. In all fairness, there is nothing new there. He notes the famous rule by Evsey Domar about sustainability of public debt, meaning that if the rate of interest on debt is lower than the rate of growth, debt-to-GDP ratios tend to be stable and you are in no danger in pursuing active fiscal policies.
Note that functional finance is in many ways compatible with Old Neoclassical Synthesis Keynesianism, and it should not be a surprise that New Keynesians accept some of the same arguments. Certainly Domar was an Old Keynesian in that mold, and although he was more difficult to classify, Abba Lerner the founder of functional finance accepted many marginalist arguments.
Blanchard actually is quite conventional and argues that public debt has negative welfare effects and reduces growth (forget this, that the Industrial Revolution was done on a pile, a huge pile, of public debt). He is very clear that he's not in general in favor of more debt, but only under the current circumstances, in which the rate of growth would be above the risk free interest rate of government bonds (that he calls the safe rate) and the marginal efficiency of capital (which really means he thinks in terms of a natural rate, in Wicksellian fashion).
Yet, of course, pundits went crazy. A typical reaction is from Desmond Lachman, and ex-IMF economist (i.e. worked for Blanchard), and fellow at the American Enterprise Institute in the Wall-Street Journal. Two things, one he suggests that Blanchard is a defender of MMT, which is a stretch. MMT involves more than functional finance, like a notion of endogenous and chartal money, and a policy preoccupation with full employment, often embodied in an Employer of Last Resort (ELR) proposal (that's a non exhaustive list). The second issue is that his whole argument is that the rate of interest will go up soon (as a result, presumably of foreign bond holders; in his words: "It’s more likely that investors, particularly from overseas, will demand higher government bond yields to compensate for the elevated inflation or default risk they see from an ever-increasing public debt ratio"). In other words, the foreign crowding-out of the old Mundell-Fleming model.
Of course, the are many problems with this arguments. The Fed has considerably more room than other central banks, and US bonds play a special role in the global economy. The dollar has been relatively appreciated, even with very low rates of interest, and the notion that something has to be done, even with some depreciation, is bogus. Depreciation is neither inflationary, nor contractionary in the US, in contrast to developing countries. The chances of higher inflation, are also subdued, even with the current long, but slow, recovery with low official unemployment. But it says something that there is all this crazy reaction about a very modest defense of fiscal expansion (note also that after Bernie, and AOC, MMT has become synonymous with fiscal expansionism, in ways that Keynesianism was before; naked Keynesianism, you might argue).
PS: If you are interested on the effects of monetization of public debt read this old post that replied to Krugman (who has warmed up to some functional finance/MMT ideas).
MMT’s Opening
By J.D. ALT I recently read in the WSJ that Modern Monetary Theory is defined as the proposition that the federal government can borrow as much money as it needs so long as the interest rate it pays is less … Continue reading →
The post MMT’s Opening appeared first on New Economic Perspectives.
MMT In The Newsflow Again
Modern Monetary Theory (MMT) has been in the news again (and filled up my Twitter feed...). There have been a number of attempts to "explain" MMT by various American conservatives. As one might expect, those attempts have been pathetic; it is generally a good idea to have at least a reasonable grasp of a topic before attempting to explain it. Critics of MMT generally do not bother with that step. Since I am trying to work on other projects, I will only give a quick response to what I have seen, in case some of my readers are not familiar with MMT. (My working assumption is that most of my readers are, hence the brevity of this article.)
There are two angles of attack to this debate.
- Are MMT policy proposals radical?
- Is it a radical approach to economic theory?
On the policy side, the conservative attacks on MMT are largely based on a misunderstanding of MMT (which may or may not be deliberate). One could imagine a country with "MMT policymakers" who undertake a series of policy changes that can be related to existing policies in developed countries. Nobody wants to "print an infinite amount of money" which is one of the pathetic recent characterisations I have seen in the lamestream media.*
I will not go through every possible policy, but I will only cover the most important - the Job Guarantee. The key policy variable for the Job Guarantee is the wage paid, and there is no reason that this wage has to be particularly high. After all, it is the de facto minimum wage in the economy. It is entirely likely that the introduction of the programme would lead to a one-time jump in wages, but then low wage jobs in the private sector would effectively trade as a spread off that wage, and that would be it. Once we factor this in, the size of the programme would not be that big relative to existing welfare state programmes. In particular, it would be far less inflationary than a basic income policy, which has been adopted by the free market fundamentalists.
However, if the reader is willing to let me dig deeper into politics, we can see why free market conservatives are unhappy with it. (If one is a free market conservative, one may wish to skip ahead a couple paragraphs.)
Free market conservatives and neoliberals have managed to embrace two policy stances:
- We need to cut marginal tax rates on rich people.
- Debt is out of control, so we have to stop spending on programmes that benefit poor people.
Roughly speaking, the embrace of these policies has been success in recent decades, and so the neoliberal contingent wants to keep the political train going. However, there is no way that any theory of fiscal policy that embraces concepts like arithmetic are compatible with this stance.
The theory side of MMT is more radical, but it only radical in the sense that the neoclassical consensus has all the attributes of a failed research programme. Modern Monetary Theory is part of a long line of post-Keynesian economics; if you want to understand the theory, there's a lot of reading to do. There's a lot of "MMT primers" on the internet, but they focus on only the juicy bits, and they are mainly aimed at non-economists. (I'm still waiting to get a copy of the MMT textbook, which should have been published years ago...)
The skepticism of MMT towards monetary policy is an area that both shows up in policy and theory. For a normal human being, locking interest rates at zero is not a particularly radical policy -- Japan has been a wonderful policy lab. However, if one is a researcher at a central bank -- or a researcher whose funding gravy train comes from central banks -- the downgrade in importance of monetary policy as a policy tool has extremely nasty implications. As a result, this aspect of MMT will always raise the dander of many economists.
Finally, my Twitter feed has been filled with condescending comments from mainstream economists who state that MMT has no empirical aspects to it. Firstly, if one does not read the literature, one will not find empirical work. Secondly, how much empirical work can we expect from theory in the first place?
Let's take a look at mainstream economics.
- It is very easy to find mainstream academics insisting that government debt is a burden on future generations, as this is demonstrated in OLG models. OK, let us to try to fit an OLG model to the post-1940 experience in the United States. Which "generation" ran up the debt? What year exactly did this "generation" live? What year exactly did the next generation live? What was the actual measured burden?
- The mainstream insists: all we need for economic stimulus is for the central bank to cut real rates. How come this did not work after the Financial Crisis? Oh, the "natural rate of interest" fell! Why did the "natural rate of interest" fall? Since the economy did not grow as expected, the estimate of the natural rate of interest was pushed below the observed rate of interest. (Falsifiability? Whatever, man.)
Let's be blunt, the empirical record of neoclassical theory is hardly sparkling.
I am currently working on a book on business cycle analysis. I will once again go through mainstream theory, and see whether it offers anything of use. I do not wish to prejudge things, but based on my past experience, I have severe doubts whether we can extract any useful practical insights from neoclassical theory. If someone thinks that assessment is out to lunch, I would be very happy to look into any suggested models.
Footnote:
* I'm a blogger, and I'd be embarrassed to publish something as ridiculous as that.
(c) Brian Romanchuk 2019
The day MMT officially went mainstream?
On Wednesday 16 January an unusual event occurred. FTAlphaville, a news and commentary service for financial market professionals provided by the Financial Times, published an article by Brendan Greeley entitled ‘America has never worried about financing its priorities’.
Its opening paragraph reads “There is nothing inherently socialist about government debt. A government can issue debt to pay for whatever it likes. It can pay to fight a war, to lower taxes for a preferred group, to soften the sharp edges of a recession. The United States has, in fact, issued debt to pay for all of these things. American politicians say that public debt crowds out private investment, that it’s unsustainable and will turn the country into Argentina. Or Greece. Or now Venezuela. But regardless of what they say, what American politicians do is vote for more debt.”
The article references a meeting between Head of the US Democratic National Committee Howard Dean and Professor Stephanie Kelton. ‘I expected some semi-Marxist bullshit’ reported Mr Dean ‘but she’s a real thinker’. That’s a good start. MMT is not a political position, but a statement of how the economy actually works. The realities that it opens up to supporters of public purpose doesn’t alter the fact that it is equally at the service of a repressive military state, as long as they are sovereign currency issuers.
Warren Mosler wrote a letter in response to the FT, which they published as the ‘editor’s pick’. ‘Excellent report’, he writes, ‘and thanks for the mention’. But he picks the FT up on one point. The article states ‘Modern monetary theorists argue that inflation happens only when the real economy – plants, machines, workers -can’t absorb what the government is spending.’ Warren responds, ‘Let me state that you need to omit the word ‘only’ as there are numerous other reasons for what is called ‘inflation’ in addition to what you described.’
Thomas Fazi, co-author of Reclaiming the State with Professor Bill Mitchell, took the time to create a Twitter thread, which he starts with ‘Yesterday was the day #MMT officially went mainstream. Here are the highlights of that historic article.’ Here it is, unrolled.:
Thomas Fazi @battleforeurope
[Thread: 1/11] Yesterday was the day #MMT officially went mainstream, courtesy of @bhgreeley at @ftalphaville: ftalphaville.ft.com/2019/01/16/154…. Here are the highlights of that historic article:
[2/11] @bhgreeley: “There is nothing inherently socialist about govt debt. A govt can issue debt to pay for whatever it likes: to fight a war, to lower taxes … to soften the sharp edges of a recession. The US has, in fact, issued debt to pay for all of these things”.
[3/11] @bhgreeley: “American politicians say that public debt crowds out private investment, that it’s unsustainable and will turn the country into Argentina. Or Greece. Or now Venezuela. But regardless of what they say, what American politicians do is vote for more debt”.
[4/11] @bhgreeley: “Advocates for MMT argue that, for a sovereign country with its own currency, there is no inherently unacceptable level of government debt — that country does not automatically begin to collapse when debt reaches 90% of GDP, or even 200% of GDP”.
[5/11] @bhgreeley: “[The US government] appropriates what it believes is necessary for domestic programs, regardless of revenue. A traditionalist would see this as a prescription for inflation: increase the supply of money and, as with any commodity, you reduce its value”.
[6/11] @bhgreeley: “MMT argues that inflation happens only when real economy … can’t absorb what govt is spending. So: disconnect spending from taxation. Spend until the economy is at capacity. … Raise taxes only to cool down inflation, when real economy exceeds that capacity”
[7/11] @bhgreeley: “We are confident [that MMT] is neither Marxist, nor is it bullshit. … MMT is simply a different way of looking at fiscal policy, a way of describing what the real-world constraints on spending look like”.
[8/11] @bhgreeley: “[MMT] is in fact very close to how people in Washington already approach spending. Again, we’re not talking about what they say. Rather, we’re talking about what they do”.
[9/11] @bhgreeley: “US Congress spends money on stuff it thinks is important. Over last four decades it has only once matched that spending with taxes, in late 1990s. … Like MMT, Congress already appropriates away until it reaches real-world restraints on how much it can spend”.
[10/11] @bhgreeley: “When Wash. wants something — to fight a war, to cut taxes — it appropriates. Arguments about balancing budgets aren’t about constraints. They’re about priorities. Important programs get appropriations. … Unimportant programs need to be paid for with taxes”.
[11/11] @bhgreeley: “[Politicians] who appropriate regularly and wildly without concern or revenue, are basically already in the closet on modern monetary theory”.
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The post The day MMT officially went mainstream? appeared first on The Gower Initiative for Modern Money Studies.
Understanding Money, Federal Spending, and Federal Tax Liabilities
Using common terms to facilitate understanding with the general public, the dollars required to pay federal taxes do not come from the private sector. They do not come from the rich, the middle class, the working class, the poor, large corporations, medium-sized businesses, small businesses, nor do they come from foreign entities such as China. All dollars used by the US private sector to pay federal taxes come from the US federal government. In short, you do not fund the US government, the US government funds you.
The post Understanding Money, Federal Spending, and Federal Tax Liabilities appeared first on Ellis Winningham.
The Devil in the Details: Algal Blooms.
It is accepted that the recent mass fish kill in the Darling River was triggered by an “algal bloom”. But what on earth is an algal bloom?
Believe it or not, I think some basic, high-school level science could throw considerable light on the whole catastrophe, counter some misconceptions about it and offer valuable, if sobering, lessons for the Left..JPG/480px-Clyndrospermum_(Cyanobacteria).JPG)
Photomicrograph of cyanobacteria, Cylindrospermum sp.[A]
The first detail is that those “blue-green algae” -- more generally referred to as “algae”, period -- behind the bloom strictly speaking aren’t algae: BGA are unicellular, microscopic aquatic bacteria (cyanobacteria, to be precise). Although genuine algae can be unicellular, algae are plants, not bacteria.
BGA, however, do something very unlike other bacteria. They, like plants, photosynthesise:
6 CO + 6 H O --> C H O + 6 O
2 2 6 12 6 2
BGA use energy in the environment (from sunlight, not shown in the equation; that’s the “photo-” prefix) to break down carbon dioxide (CO2) and water (H2O) into its constituent atoms and to “reassemble” them into glucose (C6H12O6) and oxygen (O2): i.e. synthesise those molecules. Some of the energy is stored within the glucose.
During the day, BGA release the oxygen into the environment and accumulate glucose, which they use at night (together with oxygen) for the energy it contains (reversing the equation above: cellular respiration):
C H O + 6 O --> 6 CO + 6 H O
6 12 6 2 2 2
Any excess glucose goes into reproducing themselves.
So, like plants, cyanobacteria require water, carbon dioxide (dissolved in the water), light and warmth to survive. All of that, considering their tiny size, is often readily available in their environment.
That, however, is not their complete list of requirements. Like plants, they also need other nutrients, like phosphorus and nitrogen. That can be harder to find.
In their natural environment, nutrient availability constrains define the life-cycle of cyanobacteria: they reproduce to the extent those constrains allow, photosynthesise, net-release oxygen and accumulate glucose. Some die naturally, some are eaten by other organisms and some reproduce. The oxygen and glucose they produce sustain other life forms.
Important human sources of those more naturally scarce nutrients, however, can disturb that cycle: agricultural run-off (plant fertilisers!) and sewerage (human manure!). Farmers deliberately employ fertilisers to promote plant growth. Shouldn’t one expect fertilisers to promote BGA growth?
In a flowing course of water, water inflows can keep the concentration of carbon dioxide and phosphorus and nitrogen compounds low enough. Of course, eventually they will still reach the ocean, where they may trigger algal blooms. But the algal bloom in the inland course of water was averted.
Bacterial bloom south of Fiji on October 18, 2010.[B]
Now, there’s no prize to guess what could happen in hot, sunny days, if the water, because of drought, over-extraction or a combination, stopped flowing: BGA multiply explosively -- algal bloom. All the while, BGA remain bacteria, producing more bacteria-like effects: some of them release toxins.
Eventually, some of those conditions falter (say, temperature and/or luminosity falls) and a mass die-off ensues.
Other bacteria present in the environment feast on the glucose the BGA accumulated, reproducing beyond measure, consuming the oxygen the BGA released and releasing in turn the carbon dioxide BGA had consumed. They do what the second equation indicates.
After suffocating larger life forms unable to leave the area affected, these latter bacteria themselves die.
The end situation is similar to the initial one: concentrated carbon dioxide and phosphorus and nitrogen compounds. Is it conceivable this process could repeat itself? Well, yes. Yes, it is conceivable.
----------
The purpose of this post exceeds delivering a high-school level lecture on science. Neither do I aim to deny the tragic and ominous nature of the events, quite to the contrary. It’s not my intention to cast doubt on the sincerity of the feelings those directly affected expressed. I truly believe you all and I know your situation is really dire. To make things worse, we might not have seen the end of this.
I agree this episode demands great scrutiny of large cotton growers and their links to bureaucrats/politicians. It’s likely that the former exceeded their water entitlements thereby turning a bad situation into an environmental disaster. They, however, aren’t the only large water users or the only large contributors to algal blooms.
It’s likely, too, that bureaucracy and parties were captured by those big farmers; corruption isn’t out of the question. However, governmental ineptitude and simple, garden-variety impotence aren’t out of the question, either: the government may have failed to act when action could have prevented or minimised things; but that was then and this is now. And now they just can’t make it rain. To manage capitalism looks more and more like a fool’s errand.
My point is that the situation is more complex than it seems. To deny that does a disservice to us all.
The Darling catastrophe could be a smallish dress rehearsal for what is to come at much larger scale (I’m not kidding: put yourself in the shoes of the second bacteria.). Everybody, but particularly Lefties (I’m looking at you, MMTers), should pay attention.
Let me sum up my conclusion: excessive faith in governmental technocratic management and too much business for too little natural resources was the road to this chaos.
RELATED READING:
What Exactly Is a Red Tide?
By Danielle Hall, August 2018
Toxic Algal Blooms
Department of Primary Industries and Regional Development
Government of Western Australia, page last updated: Thursday, 4 January 2018 - 1:33pm
IMAGE CREDITS:
[A] "Photomicrograph of cyanobacteria, Cylindrospermum sp. Cyanobacteria are capable of nitrogen fixation, which takes place in the anaerobic environment of heterocysts". Author: Matthew Parker. 22 January 2013. Source: Wikimedia. File licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license. Nobody endorses me or the use I make of that file.
.JPG){kind=link}
[B] "Bacterial bloom south of Fiji on October 18, 2010. Though it is impossible to identify the species from space, it is likely that the yellow-green filaments are miles-long colonies of Trichodesmium, a form of cyanobacteria often found in tropical waters".
Author: Norman Kuring, NASA Earth Observatory. Source: Wikimedia. Public domain.
UPDATE:
13-01-2019. Although this appeared yesterday, I've just read it. Check the underlined within the brief summary, at the bottom:
(source)
Macroeconomic System for Climate Change
Macroeconomic System for Climate Change A U.S. Patent Application Inventor: J.D. ALT (acknowledging all advocates of modern fiat money) Assignment: To all citizens of democratic free societies Abstract: A macroeconomic system including the issuing of a fiat currency by a … Continue reading →
The post Macroeconomic System for Climate Change appeared first on New Economic Perspectives.
Knut Wicksell on Knapp’s “State Theory of Money”
For some reason, Amazon.com was selling the “Selected Essays in Economics” of Knut Wicksell and edited by Bo Sandelin (two volumes) for €7.51 per volume, so I had them shipped over to Germany. They arrived this morning and I went to read the book review of “The State Theory of Money” in volume II on pages 210-219 (Some pages are readable at Google Books, btw). It was originally published in Ekonomisk Tidskrift in 1907, two years after Knapp’s book.
Wicksell, very much concerned with the connection between the state of credit and the interest rate and, very importantly, the changes in the level of (consumer goods) prices, does not like that Knapp aims to have a fixed exchange rate as the ultimate goal. This is one of the instances of the debate of what anchors a currency: a fixed exchange rate or a stable domestic price level.
Nevertheless, Wicksell agrees with Knapp and ends with this: “it can probably be said that in terms both of its content and its form – though most of all its form, its refined dialectical style, the elegance which the brief account given above has only been able to hint at dimly – it is to be counted among the pearls of economics literature.”
There is more on Wicksell and MMT in my working paper – written with Nicolas Barbaroux – published here.
Where does the Magic Money Tree Grow?
This week GIMMS extends a very warm welcome to Phil Armstrong, our guest MMT Lens author. GIMMS published his paper “Modern Monetary Theory and a Heterodox Alternative Paradigm” earlier this week in our new blog MMT Long Read. Currently studying for a PhD at Southampton Solent University, Phil is a ‘broad church’ Post-Keynesian whose research focus is pluralism with particular reference to Modern Monetary Theory.
Back in 1983, Margaret Thatcher set in motion a line of thinking that suggested that governments needed people’s tax or to borrow before they could spend. Thirty-five years later that false household budget narrative is still being repeated by politicians, journalists and think tanks alike.
In this factual, thought-provoking piece Phil debunks the mainstream theory of money and guides readers to challenge their deeply held beliefs about where money comes from and how it works.
The term ‘magic money tree’ is much beloved of the critics of modern monetary theory (MMT). Their story of the magic money tree begins with money’s traditional creation myth; money springs from barter and represents a cost-saving alternative to barter [1]. In the story, money is a private-sector invention, and only later do governments get in on the act. According to their fable, private sector business generates money from ‘productive’ activity. The state siphons off some of this ‘proper’ money in the form of taxation in order to fund public services.
This is an often wasteful and invariably inefficient process. The government can, of course, borrow money from the private sector, but this brings its own dangers; borrowing must be repaid and it places a burden on future taxpayers. Of course, the higher borrowing will raise interest rates, adding to the supposed intergenerational burden. This was famously noted by Margaret Thatcher.
“The state has no source of money, other than the money people earn themselves. If the state wishes to spend more it can only do so by borrowing your savings, or by taxing you more. And it’s no good thinking that someone else will pay. That someone else is you.”
“There is no such thing as public money. There is only taxpayers’ money.”
Margaret Thatcher, speech to Conservative Party Conference, October 1983.
A third option for funding exists but this is to be avoided at all costs; printing money. Any money printed by the government hasn’t arisen from productive private sector activity and must be inflationary; excessive money printing inevitably leads to hyperinflation. The magic money tree grows in the government’s garden but picking its fruit must be eschewed; such a harvest leads only to inflation and eventual economic collapse.
MMT advocates reject this myth and replace it with a new and far more convincing narrative based not on fables but history, anthropology and a deep-rooted knowledge of how the monetary system actually works. First, MMT rejects the orthodox money creation myth. It denies the notion that a unit of account can spring from the action of private individuals and instead argues that the state first introduces the unit of account and decides upon the medium which it will accept in settlement of tax liabilities [2]. Once the state has sufficient power it can use its control over the monetary system to provision itself. It first places some of its citizens in debt and requires them to pay a tax levied in the unit of account it has determined and payable by the means it is prepared to accept in settlement.
The state can now purchase the goods and services it requires, redistributing resources to itself from the private sector. Taxes serve first to create sellers of goods and services desiring the state’s currency in exchange. Private individuals need to acquire state money to pay their debts to the state. Second, the state is able to use its net spending to manage aggregate demand. It must net spend sufficiently to allow the non-government sector to meet its tax liability and satisfy net savings demand at the full employment level of income – otherwise, it will allow deflationary forces to exert downward pressure on income. Excessive net spending will generate inflationary pressures [3]. However, the key insight provided by MMT is that government must spend (or lend) before it can tax (or borrow). Taxes do not fund spending in a functional sense.
This logic is clear in a system where the state predominantly spends in coins. Clearly, a private sector taxpayer cannot mint her own coins without state permission. The state would need to spend them before she could acquire them. In the modern financial system, the government spends by data entry and the working of the financial system can cloud the issue; however, the logic still applies. When the government spends, it credits a bank account at the same time, adding reserves to the account-holder’s bank’s reserve account at the central bank.
It may appear that a private individual can pay their tax bill using bank money, however, on further reflection, this view can be seen as an illusion. If a private sector individual or institution pays taxes by means of a cheque its bank deposit falls by the amount of the payment but the settlement of the tax liability occurs when the taxpayer’s bank’s reserve account at the central bank is debited by the same amount. It is the transfer of bank reserves from the taxpayer’s bank’s reserve account to the Treasury account that settles the tax bill. To quote Mosler, ‘You can’t have a reserve drain before a reserve add.’
Before the private sector can pay its taxes the state must have spent or lent the money. Of course, the central bank might provide the reserves to the taxpayer’s bank by repo or buying bonds, but those transactions are merely the reversals of the central bank’s earlier draining of reserves by bond sales. The provided reserves originated from state spending. Thus it is apparent that state spending (or lending) precedes taxation; the only other way would involve counterfeiting of state money by the private sector!
We can now see where this fictitious magic money tree really grows; it grows in the non-government sector garden and must be used by private-sector agents who somehow want to pay their taxes before the government has spent the required state money into existence! Of course, MMT advocates know a magic money tree can’t provide state money; only the myth-believing critics believe such a thing exists.
In conclusion, we might amend Thatcher’s quote and make it an accurate reflection of reality, not an ideologically-based fable of a magic money tree growing in a free-market garden.
“The non-government sector has no source of state money except the state itself, it can only create bank money which can be used in private sector transactions but not to pay taxes. If the state wishes to spend more it can only do so without limit by data entry. Taxing or borrowing simply reduce the purchasing power of the non-government sector and serve to give value to state money and provide a means to manage demand.”
“There is no such thing as taxpayers’ money. There is only public money.”
Phil Armstrong, December 2018.
[1] See Menger (1892) The Origin of Money for a typical example of the story
[2] G.F. Knapp (1924) The State Theory of Money
[3] See Warren Mosler (2012) Soft Currency Economics II
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Upcoming event:
1-2 February 2019 – GIMMS will be attending the 1st International European Modern Monetary Theory conference in Berlin. We will be speaking about our project and plans for promoting MMT and the Job Guarantee in the UK. Full details of the conference are available here. Registration for the conference is here.
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