A an excellent explanation justification for a significant increase in expenditure on health. In all of these arguments, there is one factor that keeps nagging me, too much of the money “created” leaks overseas ever increasing our trade deficit which we try to balance by flogging off assets including some related to health..
Your analysis is sound. Its only problem is it exists virtually entirely within the current paradigm for the creation and distribution of new money which is Debt Only. There are many ways to maintain the ethical nature of monetary contracts while strategically implementing the new monetary paradigm of Direct and Reciprocal Monetary Gifting...which will solve many more problems in the economy and elsewhere than the current paradigm allows.
Very interesting. Thank you. But surely the “criminal justice system” is not the “main remedy” for enforcing contracts, at least not in UK and I assume elsewhere?
The justice system is where contracts can ultimately be enforced...But of course you are right, there are other ways of remedying the failure to fulfil a contract....
No no no , look , central banks are the treasury which itself is the government they are all part of the same thing , to say that central banks cannot loan money to the treasury is just stupid because the treasury and central banks are part of government , lets cut the nonsense , central banks and commercial banks do not operate as complete independent entities they are licensed and financed by government and when they run out of money which they often do the government restocks them.Commercial banks just recycle money back to government they do not keep stocks of money / actual cash its all afront to stop the majority of people in a country wanting a more equal share of wealth.The rich control government which controls treasury central banks and commercial banks the rich do not want to risk fluctuations in the spread of wealth so they fool peopleinto thinking governments can and do run out of money which they dont they cant they are theonly ones allowed to make it .The game is up , the internet and the demise of newspapers has seen to that.As for government bonds its a scam for the rich, the masses know little or nothing about them
I will continue to argue, as I've done with Steve Keen, that, although the mainstream economic analysis is incorrect, the reason for it's intransigence is a political, rather than an academic one. The mainstream narrative points incorrectly, as we know, to a limited money supply, thus bank transactions being of necessity as intermediary within that supply, rather than new money creations. This has it's origin in the 'gold standard' and the everyday experience of running a household or non-bank business budget, so is an 'easy sell' to the general public.
The thing that's on the mind of the 'billionaire class' is how to turn the money they already have into total political power and rentier assets. They hate 'one-person-one-vote' democracy (remember Peter Thiel saying "democracy is incompatible with freedom?), but cannot reasonably disenfranchise voters (yet).
In order to get around this, they promote this narrative of 'there is no money' in order curtail the capacity of democratic government to act, as a proxy for ending democracy itself. The bankrupting of governments by combination of monetary rules and tax-cuts will also lead to the sale of public services and the public landed estate to private buyers. At that point, democracy ceases to have any meaning.
One suspects that the only remaining function of central government will be the military, since this is essential to protecting private property interests, but at a cost that can be socialised. This was basically the sole purpose for taxation in past-times, and so shall it be again.
At that point we will be in full neo-feudalism, which is, I'm sure, the billionaires intent.
Kevin: You are absolutely right. Theoretics/systemic analysis no matter how accurate generally does not analyze on the conceptual/paradigmatic level. This is why Keen hasn't so far consciously perceived the new paradigm concept and so his analysis is incomplete and lacks focused analysis on HOW to implement it.
New paradigms are new, operantly APPLIED phenomena. What we require is conscious awareness of the specific new concept and how to best implement it. As a genuine new paradigm concept changes the ENTIRE nature of a system, body of knowledge, area of human endeavor by beneficially resolving the old/current paradigm's anomalies its THE solution, and all it further needs is a socio-economic and political mass movement to communicate those benefits.
We can look directly at the problematic operations in the economy, but still miss the importance of the ideas/paradigm concepts BEHIND those operations. Keen has said: "Neo-classical economists ignore money, debt and banks, because if they didn't they would have to admit that the money system de-stabilizes the economy." But he did not perceive that the monopoly paradigm for the creation and distribution of new money of Debt ONLY (the word ONLY designates it as such) is what enforces de-stabilizing debt deflation and that strategically and DIRECTLY integrating the new paradigm of Monetary Gifting at points within the economic process is what will end the current monopoly paradigm and resolve its problems.
Well said. Nothing wrong with the world that a few better billionaires won't fix. Wealthy don't hate democracy, they control it through surplus labour.
The FED can make money anytime it chooses to do so and it doesnt need to pay it back no matter how it spends it , who do you think the FED owes money to when it magically produced it for AEG ? it didnt borrow it so it doesnt have to pay it back it just added a credit to AEG ,s bank .Some governments invent stories and say they have debt , what nonsense , when you examine the debt they say they have ts debt owed to themselves , how ridiculous .Any government with ts own currency is itself the only authority that can authorise the printing of money or the credit to accounts all banks in USA can only act as banks with the authorisation of the FED and the FED is basically the USA government treasury , their power to issue dollar money is limitless how do you think they find billions for war for Ukraine for Israel for Vietnam etc at a drop of a hat ? They just make it whenever they want to .There is a knock on affect and that is Inflation its the only thing they need to control , they control it with tax and sometimes in recent years with interest rates , the tax always comes after the government spend money ts how they withdraw money when the economy overheats but to pretend they never raise taxes they now use interest rate rises but doing so has brought unwanted problems because interest rate rises hit the poor not the rich.The poor outnumber the rich and generally are always in debt.
This is an extrapolation of MMT as if it already operates, rather than how it could operate if it were adopted. I'm not competent to comment on the situation in the USA, but I can tell you that throughout most of the world, central banks are expressly forbidden by law from making making loans directly to treasury, and are not even allowed to purchase bonds direct from treasury, though there is a secondary market wherein central bank can buy bonds from primary bondholders such as commercial banks.
It is not an extrapolation of MMT - with which I largely disagree. It is a Keynesian formulation of how the system works....As to central banks being forbidden by law - those laws were easily overridden during the GFC and COVID crises...They are laws that arise from the ideology that governments should not raise finance and spend/invest into the economy. That role/investment/spending should, according to the political ideology, be limited and confined to the private sector alone.
@Ann Pettifor, Please learn how to navigate the comments section- I was replying to T.C's earlier comment in this thread, not your Original Post, which is excellent as usual. I am well aware of the ideological nature of so-called 'financial prudence', as well as the fascistic political intent of the resulting 'Austerity' when it is forced to it's ultimate conclusion. There is a very good book out by Clara Mattei on the subject atm- (I'm sure you know of it) as well as a number of Youtube interviews with her that precis the book.
Excellent summary.
Great piece ann. Pls link to it on X so i can share more widely.....
A an excellent explanation justification for a significant increase in expenditure on health. In all of these arguments, there is one factor that keeps nagging me, too much of the money “created” leaks overseas ever increasing our trade deficit which we try to balance by flogging off assets including some related to health..
Your analysis is sound. Its only problem is it exists virtually entirely within the current paradigm for the creation and distribution of new money which is Debt Only. There are many ways to maintain the ethical nature of monetary contracts while strategically implementing the new monetary paradigm of Direct and Reciprocal Monetary Gifting...which will solve many more problems in the economy and elsewhere than the current paradigm allows.
Very interesting. Thank you. But surely the “criminal justice system” is not the “main remedy” for enforcing contracts, at least not in UK and I assume elsewhere?
The justice system is where contracts can ultimately be enforced...But of course you are right, there are other ways of remedying the failure to fulfil a contract....
No no no , look , central banks are the treasury which itself is the government they are all part of the same thing , to say that central banks cannot loan money to the treasury is just stupid because the treasury and central banks are part of government , lets cut the nonsense , central banks and commercial banks do not operate as complete independent entities they are licensed and financed by government and when they run out of money which they often do the government restocks them.Commercial banks just recycle money back to government they do not keep stocks of money / actual cash its all afront to stop the majority of people in a country wanting a more equal share of wealth.The rich control government which controls treasury central banks and commercial banks the rich do not want to risk fluctuations in the spread of wealth so they fool peopleinto thinking governments can and do run out of money which they dont they cant they are theonly ones allowed to make it .The game is up , the internet and the demise of newspapers has seen to that.As for government bonds its a scam for the rich, the masses know little or nothing about them
Let's agree to disagree.
I will continue to argue, as I've done with Steve Keen, that, although the mainstream economic analysis is incorrect, the reason for it's intransigence is a political, rather than an academic one. The mainstream narrative points incorrectly, as we know, to a limited money supply, thus bank transactions being of necessity as intermediary within that supply, rather than new money creations. This has it's origin in the 'gold standard' and the everyday experience of running a household or non-bank business budget, so is an 'easy sell' to the general public.
The thing that's on the mind of the 'billionaire class' is how to turn the money they already have into total political power and rentier assets. They hate 'one-person-one-vote' democracy (remember Peter Thiel saying "democracy is incompatible with freedom?), but cannot reasonably disenfranchise voters (yet).
In order to get around this, they promote this narrative of 'there is no money' in order curtail the capacity of democratic government to act, as a proxy for ending democracy itself. The bankrupting of governments by combination of monetary rules and tax-cuts will also lead to the sale of public services and the public landed estate to private buyers. At that point, democracy ceases to have any meaning.
One suspects that the only remaining function of central government will be the military, since this is essential to protecting private property interests, but at a cost that can be socialised. This was basically the sole purpose for taxation in past-times, and so shall it be again.
At that point we will be in full neo-feudalism, which is, I'm sure, the billionaires intent.
Kevin: You are absolutely right. Theoretics/systemic analysis no matter how accurate generally does not analyze on the conceptual/paradigmatic level. This is why Keen hasn't so far consciously perceived the new paradigm concept and so his analysis is incomplete and lacks focused analysis on HOW to implement it.
New paradigms are new, operantly APPLIED phenomena. What we require is conscious awareness of the specific new concept and how to best implement it. As a genuine new paradigm concept changes the ENTIRE nature of a system, body of knowledge, area of human endeavor by beneficially resolving the old/current paradigm's anomalies its THE solution, and all it further needs is a socio-economic and political mass movement to communicate those benefits.
We can look directly at the problematic operations in the economy, but still miss the importance of the ideas/paradigm concepts BEHIND those operations. Keen has said: "Neo-classical economists ignore money, debt and banks, because if they didn't they would have to admit that the money system de-stabilizes the economy." But he did not perceive that the monopoly paradigm for the creation and distribution of new money of Debt ONLY (the word ONLY designates it as such) is what enforces de-stabilizing debt deflation and that strategically and DIRECTLY integrating the new paradigm of Monetary Gifting at points within the economic process is what will end the current monopoly paradigm and resolve its problems.
Well said. Nothing wrong with the world that a few better billionaires won't fix. Wealthy don't hate democracy, they control it through surplus labour.
Thats t
The FED can make money anytime it chooses to do so and it doesnt need to pay it back no matter how it spends it , who do you think the FED owes money to when it magically produced it for AEG ? it didnt borrow it so it doesnt have to pay it back it just added a credit to AEG ,s bank .Some governments invent stories and say they have debt , what nonsense , when you examine the debt they say they have ts debt owed to themselves , how ridiculous .Any government with ts own currency is itself the only authority that can authorise the printing of money or the credit to accounts all banks in USA can only act as banks with the authorisation of the FED and the FED is basically the USA government treasury , their power to issue dollar money is limitless how do you think they find billions for war for Ukraine for Israel for Vietnam etc at a drop of a hat ? They just make it whenever they want to .There is a knock on affect and that is Inflation its the only thing they need to control , they control it with tax and sometimes in recent years with interest rates , the tax always comes after the government spend money ts how they withdraw money when the economy overheats but to pretend they never raise taxes they now use interest rate rises but doing so has brought unwanted problems because interest rate rises hit the poor not the rich.The poor outnumber the rich and generally are always in debt.
The Fed does not spend the money. The Treasury/government does.
This is an extrapolation of MMT as if it already operates, rather than how it could operate if it were adopted. I'm not competent to comment on the situation in the USA, but I can tell you that throughout most of the world, central banks are expressly forbidden by law from making making loans directly to treasury, and are not even allowed to purchase bonds direct from treasury, though there is a secondary market wherein central bank can buy bonds from primary bondholders such as commercial banks.
It is not an extrapolation of MMT - with which I largely disagree. It is a Keynesian formulation of how the system works....As to central banks being forbidden by law - those laws were easily overridden during the GFC and COVID crises...They are laws that arise from the ideology that governments should not raise finance and spend/invest into the economy. That role/investment/spending should, according to the political ideology, be limited and confined to the private sector alone.
@Ann Pettifor, Please learn how to navigate the comments section- I was replying to T.C's earlier comment in this thread, not your Original Post, which is excellent as usual. I am well aware of the ideological nature of so-called 'financial prudence', as well as the fascistic political intent of the resulting 'Austerity' when it is forced to it's ultimate conclusion. There is a very good book out by Clara Mattei on the subject atm- (I'm sure you know of it) as well as a number of Youtube interviews with her that precis the book.