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Be careful what you wish for. I agree with Stieglitz that the Troika has historically not chosen the best path for crisis countries by implementing austerity. M
by cwperkins 7y ago
Be careful what you wish for. I agree with Stieglitz that the Troika has historically not chosen the best path for crisis countries by implementing austerity. My fear with using Fiscal Policy and running deficits is that it is hard for a politician to win a campaign fighting for austerity if and when the debt binge becomes to great. From my own understanding, that is why monetary policy is strongly preferred because it’s easier to roll back but Europe is at their end of Monetary policy. I wish I understood MMT better, it’s something discussed in the circles of parliament and congress but I don’t think the average joe is aware.
- Gustomaximus 7y agoVery generally, my gripe with MMT is maybe it could work if well run. I'm not convinced but let's say it's possible. Next step, can we trust politicions to run the program effectively? I suspect they would always try to squeeze more out than practical that would lead to issues... And that's if it would work in the first place. I'd like to see some countries try it and prove/disprove, just not mine first.
- marriedWpt 7y agoHasn't Japan already gone through the course?
- Gustomaximus 7y agoWhat course? Would you say they are running MMT, or just closer to than other countries. They have embraced increased holdings for ~6 years. Def the petri-dish but still seems early days.
- Despegar 7y agoThis is absurd in the context of Germany. They have a fetish with "fiscal responsibility". It'd be the natural inclination of every politician to cut back on deficits (and I imagine within a few years there'd be pressure to). Germany is a country with a broken military and infrastructure. They should spend money on that. They should cut taxes for workers. There's plenty of shit for Germany to spend money on, and it would cause yields to finally rise. The ECB has no choice because rich countries refuse to spend money.
- cwperkins 7y agoI want to be clear that I think the Germans, Dutch and Swedes can afford to do more for the benefits of their own economies and of Europe’s. Germany needs to ween itself off of lignite coal and get better broadband infrastructure as well as contribute more to NATO. On the other hand in a place like Argentina, I’m not sure what the exit strategy.
- bilekas 7y agoI really hate this idea that everyone needs to just constantly be spending. It's useful but there is nothing wrong with having a slow stable fincal conscious ecconomy.
- Despegar 7y agoAnd I really hate the moralizing as if the national economy needs to be run like a household budget.
- growlist 7y agoI think the moralizing is useful if it means future generations aren't going to pay the price for today's profligacy.
- Despegar 7y agoThis extremely poor misunderstanding of macroeconomics is likely to lead to the outcome you're supposedly trying to avoid.
- kyuudou 7y agoSo... when does the music stop? Some kind of debt jubilee or currency reissue?
- yokaze 7y agoInstead future generations are going to pay for today's economic ideology
- hocuspocus 7y ago> Europe is at their end of Monetary policy I genuinely wonder why you believe that? Everything points to the status quo.