5 ms·

Unfortunately money isn't limitless.

syshum 7y ago
Unfortunately there are many people that believe it is... That the government can just indefinitely issue people money with no negative consequences, or worse they believe that simply "taxing the wealthy" is a path to that infinite money
- daxorid 7y ago
  These people aren't wrong, though. Powell has printed $6T, and the DXY has gone nowhere but up, along with the SPY and the QQQ and the DJIA. Every single Thursday, we report more job losses than expected, and the market screams higher. As much as we'd like to think there will be consequences to printing money, the evidence is in that there won't be, either in currency value or market confidence. MMT has proven itself correct.
  - mindslight 7y ago
    You don't seem to be taking into account that stocks shooting up is itself the inflation. The stock market is completely disconnected from the economic forecast, because money remains easy for wall street despite everything happening on main street.
  - A4ET8a8uTh0 7y ago
    Has it? The argument could be made that US financial health is worse now than in 2008 and not better. Wall Street gorging on free money is not really a good argument right now if the country is literally on the verge of falling apart.
  - syshum 7y ago
    Short term you are right, as most of the printing has not actually found its way back into the economy in any real way Long term however you are very very wrong Further the Stock market is not a good indicator of economic health, never has been. Stock market is largely irrational
overthemoon 7y ago
The limiting factor isn't cash on hand, we have the resources to help just like other developed countries who are handling this way better. The limiting factors are political and ideological.
mindslight 7y ago
$4T go brrr says otherwise. I'm not a fan of the inflationary treadmill in general, but it's an extreme double standard to quickly bail out overextended companies and then tell individuals to basically fend for themselves.
CraigJPerry 7y ago
For USD it kind of is. What would it take to screw up the dollar? Every other country on the planet wants to hold it.
- umvi 7y ago
  What I don't understand then is why the fed doesn't just print a million dollars for each and every citizen. That's only 300 trillion dollars. We would be the richest country in the world by far, poverty would be solved.
  - CraigJPerry 7y ago
    Conventional wisdom says this would reduce the value of the USD against other currencies and that would in turn cause foreign investors to cash out. For other currencies that all seems pretty reasonable, investors would be crazy not to go to another currency. For the USD where you have excess capital imports which aren't offset by corresponding goods, materials or services exports (e.g. the USA buys products from China then China gives the money earned back to the USA in exchange for treasury bills) then what does it mean for China to cash out? >> We would be the richest country in the world by far Confusingly, as a nation you wouldn't be richer or poorer and a persons buying power wouldn't change much. This is a long way to say that printing money isn't the right lever to pull to make everyone richer. >> poverty would be solved Poverty is only partly a money supply issue, you'd need to fix the other problems that cause poverty too otherwise you'd have limited effect.
vmh1928 7y ago
And yet the Fed is able to buy back treasuries and corporate debt with funds conjured out of thin air. There's a person at the Fed who types in the amount of money they need that day. I think they're using a Node.js app feeding Kafka and a Cassandra database. As an illustration I'll show you how it works: Funds Available for Bond Repurchases: $1,000,000,000,000 And just like that a trillion dollars!
- A4ET8a8uTh0 7y ago
  And the question that gets lost somewhere, whenever we talk about those is that it does not just appear without any consequences down the road. The current spending spree practically guarantees higher taxes on everyone if the existing system is to remain in place. For the record, I agree with the gist of your message. It seems a little too easy to conjure up magical money out of thin air.
- vonmoltke 7y ago
  The Fed doesn't buy back anything. It buys government and corporate bonds just like any other investor. It just does so with an arbitrarily-large pool of money.
  - rbanffy 7y ago
    And, as we all know, money is a consensual hallucination. As long as we all play along and pretend it's real, it's real.
thecureforzits 7y ago
Prove it. Take a $500 billion out of the military budget.
- rbanffy 7y ago
  But then how would the US invade^W liberate other countries?
have_faith 7y ago
Money is limitless, it's restraint in printing too much at once that ascribes value to the existing money supply.
- paganel 7y ago
  Limits in how to best "share" that money to regular people do in fact mean that money is not limitless, de facto. Assuming you go over the logistics of what's the best way to actually hand in money to people: through tax rebates? through an envelope sent by the Post Office? through citizens' bank accounts? (then how do you handle the non-banked population?) etc etc the powers that be still have to decide what criteria should they use to send said money: according to one's needs? what are those needs? according to one's contribution to society? but then who decides about another person's real contribution to society? All these questions were first asked at least 200 years ago (I'd say starting with the French Revolution, maybe even with with the Levellers in the ~1640s), questions for which we haven't found any reasonable and definitive answer so far and we'll probably never will.
- clairity 7y ago
  you've got the value chain backwards. money isn't printed and then that magically becomes the value of the economy. the money supply is managed so as to try to match the decentralized and organic value created by us in the economy. that causal chain limits how much money can be printed without adverse effects (and at the extreme, economic and political collapse). if we generate ~$1T/mo of value, printing a couple billion extra here or there gets drowned out in the estimation error of the size of our value creation. we print an extra $1T/mo and we have start to have serious problems. so money is not limitless. it's bounded by our collective product.
ashtonkem 7y ago
We’re a long way short of running out; this is a political choice at the highest levels to do nothing, not a fiscal choice.

Unfortunately there are many people that believe it is... That the government can just indefinitely issue people money with no negative consequences, or worse they believe that simply "taxing the wealthy" is a path to that infinite money

daxorid 7y ago
These people aren't wrong, though. Powell has printed $6T, and the DXY has gone nowhere but up, along with the SPY and the QQQ and the DJIA. Every single Thursday, we report more job losses than expected, and the market screams higher. As much as we'd like to think there will be consequences to printing money, the evidence is in that there won't be, either in currency value or market confidence. MMT has proven itself correct.
- mindslight 7y ago
  You don't seem to be taking into account that stocks shooting up is itself the inflation. The stock market is completely disconnected from the economic forecast, because money remains easy for wall street despite everything happening on main street.
- A4ET8a8uTh0 7y ago
  Has it? The argument could be made that US financial health is worse now than in 2008 and not better. Wall Street gorging on free money is not really a good argument right now if the country is literally on the verge of falling apart.
- syshum 7y ago
  Short term you are right, as most of the printing has not actually found its way back into the economy in any real way Long term however you are very very wrong Further the Stock market is not a good indicator of economic health, never has been. Stock market is largely irrational

overthemoon 7y ago

The limiting factor isn't cash on hand, we have the resources to help just like other developed countries who are handling this way better. The limiting factors are political and ideological.

mindslight 7y ago

$4T go brrr says otherwise. I'm not a fan of the inflationary treadmill in general, but it's an extreme double standard to quickly bail out overextended companies and then tell individuals to basically fend for themselves.

CraigJPerry 7y ago

For USD it kind of is. What would it take to screw up the dollar? Every other country on the planet wants to hold it.

umvi 7y ago
What I don't understand then is why the fed doesn't just print a million dollars for each and every citizen. That's only 300 trillion dollars. We would be the richest country in the world by far, poverty would be solved.
- CraigJPerry 7y ago
  Conventional wisdom says this would reduce the value of the USD against other currencies and that would in turn cause foreign investors to cash out. For other currencies that all seems pretty reasonable, investors would be crazy not to go to another currency. For the USD where you have excess capital imports which aren't offset by corresponding goods, materials or services exports (e.g. the USA buys products from China then China gives the money earned back to the USA in exchange for treasury bills) then what does it mean for China to cash out? >> We would be the richest country in the world by far Confusingly, as a nation you wouldn't be richer or poorer and a persons buying power wouldn't change much. This is a long way to say that printing money isn't the right lever to pull to make everyone richer. >> poverty would be solved Poverty is only partly a money supply issue, you'd need to fix the other problems that cause poverty too otherwise you'd have limited effect.

vmh1928 7y ago

And yet the Fed is able to buy back treasuries and corporate debt with funds conjured out of thin air. There's a person at the Fed who types in the amount of money they need that day. I think they're using a Node.js app feeding Kafka and a Cassandra database. As an illustration I'll show you how it works: Funds Available for Bond Repurchases: $1,000,000,000,000 And just like that a trillion dollars!

A4ET8a8uTh0 7y ago
And the question that gets lost somewhere, whenever we talk about those is that it does not just appear without any consequences down the road. The current spending spree practically guarantees higher taxes on everyone if the existing system is to remain in place. For the record, I agree with the gist of your message. It seems a little too easy to conjure up magical money out of thin air.
vonmoltke 7y ago
The Fed doesn't buy back anything. It buys government and corporate bonds just like any other investor. It just does so with an arbitrarily-large pool of money.
- rbanffy 7y ago
  And, as we all know, money is a consensual hallucination. As long as we all play along and pretend it's real, it's real.

thecureforzits 7y ago

Prove it. Take a $500 billion out of the military budget.

rbanffy 7y ago
But then how would the US invade^W liberate other countries?

have_faith 7y ago

Money is limitless, it's restraint in printing too much at once that ascribes value to the existing money supply.

paganel 7y ago
Limits in how to best "share" that money to regular people do in fact mean that money is not limitless, de facto. Assuming you go over the logistics of what's the best way to actually hand in money to people: through tax rebates? through an envelope sent by the Post Office? through citizens' bank accounts? (then how do you handle the non-banked population?) etc etc the powers that be still have to decide what criteria should they use to send said money: according to one's needs? what are those needs? according to one's contribution to society? but then who decides about another person's real contribution to society? All these questions were first asked at least 200 years ago (I'd say starting with the French Revolution, maybe even with with the Levellers in the ~1640s), questions for which we haven't found any reasonable and definitive answer so far and we'll probably never will.
clairity 7y ago
you've got the value chain backwards. money isn't printed and then that magically becomes the value of the economy. the money supply is managed so as to try to match the decentralized and organic value created by us in the economy. that causal chain limits how much money can be printed without adverse effects (and at the extreme, economic and political collapse). if we generate ~$1T/mo of value, printing a couple billion extra here or there gets drowned out in the estimation error of the size of our value creation. we print an extra $1T/mo and we have start to have serious problems. so money is not limitless. it's bounded by our collective product.

ashtonkem 7y ago

We’re a long way short of running out; this is a political choice at the highest levels to do nothing, not a fiscal choice.