5 ms·

Organic demand growth is what we want, not this Frankenstein economy that's been created since at least 2008 if not earlier. Demand doesn't boost GDP, producing

by kovacs 5y ago

Organic demand growth is what we want, not this Frankenstein economy that's been created since at least 2008 if not earlier. Demand doesn't boost GDP, producing real goods and services boosts GDP. You can't spend your way to prosperity despite what any of the insane MMT economists might say. I agree that wage growth is good but not in the manner it's happening right now, through insanely easy money policies creating massive inflation that's easily outpacing any of those wage gains. Again, you can't print and spend your way to prosperity. Maybe some of these tools would work if they'd ever let off the gas and removed them but that's not what's happening.

paganel 5y ago
> not this Frankenstein economy that's been created since at least 2008 if not earlier For what it's worth the US has economically out-competed the European Union in that time-frame, with the US basically following Keynes and the UE going the austerity route most of the time (and only at times, begrudgingly, also following Keynes as a result of the Americans doing it first). There's also China that has out-competed the US and the UE both, but that's another story.
- slv77 5y ago
  Both the US and China have paid the costs as that liquidity has flooded into speculative assets such as land which has increased wealth inequality. In addition it likely has resulted in misallocation of capital and a future tidal wave of bad debt. While households are typically cash constrained economies operating in a fiat system rarely are because cash is essentially created at will by the banking industry. Economic constraints are largely due to the ability to identify, fund and execute in good investments that will provide a reasonable return on capital given the risk. Is there any investment area in the economy that is currently constrained by the lack of cash?
  - imtringued 5y ago
    That's just the nature of imbalanced trade. The US reserve currency mandates permanent trade imbalances. It's a double edged sword.
PaulDavisThe1st 5y ago
> Demand doesn't boost GDP, producing real goods and services boosts GDP. You can't spend your way to prosperity despite what any of the insane MMT economists might say. I appreciate that you feel strongly on this matter. However, the strength of your feelings are less relevant than the fact that different people (who all know quite a lot about this sort of thing) do not agree with you (or with each other). Calling MMT folk "insane" may make you feel good, but it neither refutes their arguments nor substantiates yours.
- fallingknife 5y ago
  MMT does sound like those radio commercials they had back in the 90s saying they would teach you how to "borrow your way out of debt" though.
  - neilwilson 5y ago
    Only because you haven't taken the time to understand what is being said - just the twisted version that isn't actually the case. Every financial debt has a corresponding financial asset. Why follow the 'debt' and not the 'asset'? Because you have a psychological anchor on the word 'debt' that causes an emotional reaction? All money is somebody's debt. That's how the accounting works. Rather than looking at the books from the 'credit' side, why not look at it from the 'in credit' side? What I find amusing is how the bank borrowing from you so you are 'in credit' with the bank is a good thing, but the government borrowing from you so you are 'in credit' with government is a bad thing. Given those are identical propositions in accounting terms, rationally the view about them should be the same.
    - fallingknife 5y ago
      When you go to the casino and change your cash for chips you are in credit with the casino. If that casino started handing out more chips without taking in cash, those people would be in credit with the casino too. Would you want to be in credit with that casino? You can create an accounting "asset" with the stroke of a pen but not a real one.

by kovacs 5y ago

paganel 5y ago

> not this Frankenstein economy that's been created since at least 2008 if not earlier For what it's worth the US has economically out-competed the European Union in that time-frame, with the US basically following Keynes and the UE going the austerity route most of the time (and only at times, begrudgingly, also following Keynes as a result of the Americans doing it first). There's also China that has out-competed the US and the UE both, but that's another story.

slv77 5y ago
Both the US and China have paid the costs as that liquidity has flooded into speculative assets such as land which has increased wealth inequality. In addition it likely has resulted in misallocation of capital and a future tidal wave of bad debt. While households are typically cash constrained economies operating in a fiat system rarely are because cash is essentially created at will by the banking industry. Economic constraints are largely due to the ability to identify, fund and execute in good investments that will provide a reasonable return on capital given the risk. Is there any investment area in the economy that is currently constrained by the lack of cash?
- imtringued 5y ago
  That's just the nature of imbalanced trade. The US reserve currency mandates permanent trade imbalances. It's a double edged sword.

PaulDavisThe1st 5y ago

> Demand doesn't boost GDP, producing real goods and services boosts GDP. You can't spend your way to prosperity despite what any of the insane MMT economists might say. I appreciate that you feel strongly on this matter. However, the strength of your feelings are less relevant than the fact that different people (who all know quite a lot about this sort of thing) do not agree with you (or with each other). Calling MMT folk "insane" may make you feel good, but it neither refutes their arguments nor substantiates yours.

fallingknife 5y ago
MMT does sound like those radio commercials they had back in the 90s saying they would teach you how to "borrow your way out of debt" though.
- neilwilson 5y ago
  Only because you haven't taken the time to understand what is being said - just the twisted version that isn't actually the case. Every financial debt has a corresponding financial asset. Why follow the 'debt' and not the 'asset'? Because you have a psychological anchor on the word 'debt' that causes an emotional reaction? All money is somebody's debt. That's how the accounting works. Rather than looking at the books from the 'credit' side, why not look at it from the 'in credit' side? What I find amusing is how the bank borrowing from you so you are 'in credit' with the bank is a good thing, but the government borrowing from you so you are 'in credit' with government is a bad thing. Given those are identical propositions in accounting terms, rationally the view about them should be the same.
  - fallingknife 5y ago
    When you go to the casino and change your cash for chips you are in credit with the casino. If that casino started handing out more chips without taking in cash, those people would be in credit with the casino too. Would you want to be in credit with that casino? You can create an accounting "asset" with the stroke of a pen but not a real one.