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We've been pumping money into the economy with no regard to long term inflation since the Obama administration. We've gotten so use to it, we've even started to

We've been pumping money into the economy with no regard to long term inflation since the Obama administration. We've gotten so use to it, we've even started to come up with financial theroies that debt spending a increasing monetary supply doesn't matter - print what you need. Modern monetary theory ain't. Ask the Romans, the Spanish and the Germans how well that worked for them.

noisefridge 5y ago
I'm not an expert on MMT, nor a proponent. I don't have a sufficiently informed opinion to say whether it's good or bad. But, I think what the US government is doing isn't MMT. MMT proponents seem to be arguing that creating money is good if and only if you ensure it is spent on the right things - like infrastructure. Then you can get net wins for the economy. According to MMT it's bad if you, for instance, create a situation where institutions, investors, and giant companies have an unlimited supply of dollars that never lose value.
- cjbgkagh 5y ago
  I've read up on MMT because it's politically important. The US govt is doing half of MMT (~0% interest rates), the problem is that the other half is somehow worse. Reducing aggregate demand via discretionary interest rates to kill the demand from the gray market(i.e. non green-market). A savings account where individuals and businesses are forced to hold cash until inflation goes down. I.e. confiscation by proxy - by the time you're allowed to spend the money it will be worth much less.
voisin 5y ago
> We've been pumping money into the economy with no regard to long term inflation since the Obama administration. Correct, and _even_ in this context, the printing in the last two years is shocking. Everyone points to the slow down in the velocity of money as justification, but look at what has happened as long as the fed has been tracking money supply and velocity of money - no matter what time period, once velocity picks back up the fed _never_ decreases the money supply in response. The printer didn’t come with a shredder.

noisefridge 5y ago

I'm not an expert on MMT, nor a proponent. I don't have a sufficiently informed opinion to say whether it's good or bad. But, I think what the US government is doing isn't MMT. MMT proponents seem to be arguing that creating money is good if and only if you ensure it is spent on the right things - like infrastructure. Then you can get net wins for the economy. According to MMT it's bad if you, for instance, create a situation where institutions, investors, and giant companies have an unlimited supply of dollars that never lose value.

cjbgkagh 5y ago
I've read up on MMT because it's politically important. The US govt is doing half of MMT (~0% interest rates), the problem is that the other half is somehow worse. Reducing aggregate demand via discretionary interest rates to kill the demand from the gray market(i.e. non green-market). A savings account where individuals and businesses are forced to hold cash until inflation goes down. I.e. confiscation by proxy - by the time you're allowed to spend the money it will be worth much less.

voisin 5y ago

> We've been pumping money into the economy with no regard to long term inflation since the Obama administration. Correct, and _even_ in this context, the printing in the last two years is shocking. Everyone points to the slow down in the velocity of money as justification, but look at what has happened as long as the fed has been tracking money supply and velocity of money - no matter what time period, once velocity picks back up the fed _never_ decreases the money supply in response. The printer didn’t come with a shredder.