tag:blogger.com,1999:blog-6245381193993153721.post2047514709185732615..comments2024-03-28T17:08:15.784-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Would Keynes have endorsed Modern Monetary Theory/Neochartalism?Lord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6245381193993153721.post-45810976679424427932015-03-26T12:02:50.032-07:002015-03-26T12:02:50.032-07:00"One could also say that there will probably ..."One could also say that there will probably always be a need for government bonds as risk-free financial assets"<br /><br />Since they float against the principal between issue and redemption, they are not really a good vehicle for retirement. <br /><br />Saving for retirement is really a fallacy of composition. It's just a tax paid to retirees via asset swaps in the finance sector. Completely pointless really when you think about it.<br /><br />Much better that the state simply pays people who are retired out of thin air based upon some social contribution index and people spend what they want while working, with the tax levels set appropriately on a functional finance basis. <br /><br />Or if the politics doesn't allow that an indexed linked savings account at National Savings achieves the same effect in a capitalised 'individual pot' way. NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-903553481930622992015-03-26T11:56:18.900-07:002015-03-26T11:56:18.900-07:00The correct view is to see the Bank's liabilit...The correct view is to see the Bank's liabilities pegged to the State government/CB entity's liabilities. <br /><br />Then they operate like any pegged currency. The Bank has to promise to delete its liabilities and deliver the state's liabilities on request (aka a cash withdrawal), or create its own liabilities when presented with the state's liabilities (aka a cash deposit). NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-66933289985108375422015-03-26T11:53:44.104-07:002015-03-26T11:53:44.104-07:00LK,
Governments in currency areas only face real ...LK,<br /><br />Governments in currency areas only face real constraints - stuff and services available in exchange for the currency of issue.<br /><br />The 'external balance' is just an accounting artefact. It has no causal bearing on anything. <br /><br />The question is what is available to and can be produced *within the currency area*<br /><br />There is far too much emphasis on the notion of things being 'external', which is a mistake of analysis IMV and leads to bad thinking. There is one world with a set of interacting currency areas. Entities operate within one or more currency areas.<br /><br />Working from that viewpoint leads to much clearer thinking in a world where national boundaries aren't as firmly drawn as they were in Keynes day. <br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-89301797740381138062011-02-20T20:47:24.915-08:002011-02-20T20:47:24.915-08:00In response to Anonymous @ SEPTEMBER 29, 2010 11:4...In response to Anonymous @ SEPTEMBER 29, 2010 11:42 AM<br /><br />According to MMT, there two types of money creation, 1) vertical or exogenous, which is government created (deficits increase nongovernment net financial assets), and 2) horizontal or endogenous, which is bank created (loans create deposits, zero net). <br /><br />Final settlement of all transactions in the economy takes place in what MMT calls "vertical money," and "exogenous money," that is, bank reserves and currency, created by government.<br /><br />Moreover, government controls the interest rate, which sets the price of money, and is also able to control the yield curve if it wishes.<br /><br />Government is the monopolist.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-79201070461532147742010-10-03T12:09:49.283-07:002010-10-03T12:09:49.283-07:00Here is more evidence that Keynes WOULD have suppo...Here is more evidence that Keynes WOULD have supported MMT. First, Keynes seems to have been well aware of the possibility (a la Lerner) of having government print money in a recession instead of borrow it.<br /><br />In an open letter to Roosevelt (1943) Keynes said “public authority must be called in aid to create additional current incomes through the expenditure of borrowed or printed money.” (see 4th para) at:<br /><br />http://www.scribd.com/doc/33886843/Keynes-NYT-Dec-31-1933<br /><br />2. More evidence that Keynes agreed with Lerner, but didn’t think the public would accept Lerner’s ideas. Keynes said "(Lerner's) argument is impeccable, but heaven help anyone who tries (to) put it across to the plain man at this stage of the evolution of ...” See: <br /><br />http://www.economyprofessor.com/theorists/abbalerner.phpRalph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-70652675461618183672010-09-30T03:28:38.307-07:002010-09-30T03:28:38.307-07:00I disagree with Anonymous; the true creator of mon...I disagree with Anonymous; the true creator of money/government debt/government financial assets/government credit/hpm/base money is the government of course. I think it is better to sometimes forget 20th century innovations (gymnastics?) and use terminology that applies to earlier days also. Thou I haven't read Moore's book - maybe in a few months.<br /><br />Banks need the reserves to buy the government debt, of course they can always get them from the Fed, and the bank money they create is just that - not explicitly and precisely government money.<br /><br />No <i>interest bearing</i> debt creation is necessary in the process, but imho it is always better to think of money - hpm - as noninterest bearing government debt.<br /><br />"Governments neither have, nor don't have money" - yes, but that is because (base) money is government credit - and this is true of anyone - banks neither have nor don't have bank money, etc.Another Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-25101511217346879252010-09-29T23:55:06.596-07:002010-09-29T23:55:06.596-07:00Banks create money, when they grant mortgages or p...<i>Banks create money, when they grant mortgages or purchase corporate or government debt.</i><br /><br />Private banks create money as measured by M1, M2, and M3.<br /><br />But then surely a central bank can in theory create money, provide that money to the government, and then the government can inject it into the economy directly by deficit spending (as the US government did in WWII when deficits were partly "monetized").<br /><br />No debt creation is necessary in this process.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-90892633323591411402010-09-29T11:42:02.952-07:002010-09-29T11:42:02.952-07:00As a follower of MMT, I disagree with this statmen...As a follower of MMT, I disagree with this statment:<br /><br />"MMT tells us that the government is the monopoly issuer of its own currency."<br /><br />I would say, "With authority given to them by the government (through the federal reserve and the payment system), commercial banks are the monopoly issuer of money." <br /><br />This is my understanding from Basil Moore's Horizontalists and Verticalists. Banks create money, when they grant mortgages or purchase corporate or government debt.<br /><br />Money are bank liabilities. Government's issue excess reserves (so-called high powered money) and government securities (T-bills are really no different than excess reserves), which induce banks to create money on their behalf. Banks issue money a liability to acquire these government assets. Since, these assets are riskless, banks will not require an interest rate premia and banks would always be willing to create deposits to acquire riskless interest-bearing assets. But as Mosler says, "Government's neither have, nor don't have money," Taxes do destroy money, but it is actually the banks, which create it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-7136688861272027452010-09-23T06:44:07.335-07:002010-09-23T06:44:07.335-07:00Lord Keynes, if you bothered to channel yourself, ...Lord Keynes, if you bothered to channel yourself, you would surely realize that the answer is yes. <br /><br />Keep up the good work.Another Anonymousnoreply@blogger.com