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Thank you for elucidating the fact that US “borrows” in its own currency and so as long as we have monetary sovereignty (which we do to a great degree due to US

Thank you for elucidating the fact that US “borrows” in its own currency and so as long as we have monetary sovereignty (which we do to a great degree due to USD being the global reserve currency) we have no deficit problems (as long as we keep inflation in check). I implore everyone reading this thread to read up on Modern Monetary Theory (MMT). Stephanie Kelton’s “The Deficit Myth” is a good place to start. Until more people have a better understanding for how the system works, they’ll continue to be confused and easily led astray by politicians who don’t have the best interests of most people in mind, but instead wish to rob us blind in a vain attempt to eliminate trade/budget deficits. (Note: I’m very much for restoring domestic manufacturing as much as possible, including the use of highly targeted tariffs, industrial policy, R&D, workforce development, etc. but this is not what the current administration is doing, not even close).

Flemlo 1y ago
I don't think domestic manufacturing works anymore. The pressure to automate will just skyrock. I'm more for a global currency which will be given to everyone who does certain jobs we can't automate away or don't want to like nursing, teaching. Everyone around the globe can get worldfiat when they do these jobs. We need to start thinking beyond known capitalism in a modern highly automated world.
- mmillin 1y ago
  There are important reasons to have domestic manufacturing even if automated and not creating jobs.
  - Flemlo 1y ago
    Sure but that's not enough to give people enough jobs.
- mensetmanusman 1y ago
  We want automation x1000, every useful automaton increases the quality of life by increasing productivity.
OfficeChad 1y ago
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zaphar 1y ago
as long as we keep inflation in check That's the trick though isn't it? MMT discourse tends to gloss over or ignore the dangers of runaway inflation and act as if you can borrow all you want with no consequence. But that part that you put in parentheses above is precisely why you can't do that. What you borrow for your budget has to be payed back later. If you just print money to do it because you borrowed more than you could afford then you inflate your currency. If inflation happens too quickly you have serious problems. It's not free money.
- MichaelZuo 1y ago
  It really is bizarre that huge portions of economics nowadays sidestep the fact that individuals, groups, and countries, have finite amounts of credibility. That it can be depleted and take well over an average lifetime to regain.
- OGWhales 1y ago
  > MMT discourse tends to gloss over or ignore the dangers of runaway inflation and act as if you can borrow all you want with no consequence. I see people say this a lot, which is odd since as far as I have seen it's one of the main points MMT people make. I'm not sure how one of the core insights of MMT has become the main criticism of it, it's kind of funny. I suppose this is because some people have taken MMT to mean that debt doesn't matter, however that is really not at all what it says. I think a more reasonable conclusion of the system MMT describes is that how money is spent matters greatly (productive vs unproductive spending), the primary purpose of taxes is keeping inflation in-check, and real resources are critical to the health of a currency.
  - avidphantasm 1y ago
    Exactly. The power of MMT is that it credibly explains what taxes actually are (not a source of government funding, but control rods for inflation and a constant source of domestic demand for the currency that helps maintain monetary sovereignty) and how to make sure spending is productive and not inflationary (e.g. through the currency issuer being the employer of last resort, etc.). You might not like it, but if you want to have a vaguely capitalistic system that has long term stability, you need to employ mechanisms like this.
johnrgrace 1y ago
We don't have as problematic a deficit problem so long as reasonable sane people are running tr4e system and willing to turn on the printers when required so as not to generate excess inflation.

Flemlo 1y ago

I don't think domestic manufacturing works anymore. The pressure to automate will just skyrock. I'm more for a global currency which will be given to everyone who does certain jobs we can't automate away or don't want to like nursing, teaching. Everyone around the globe can get worldfiat when they do these jobs. We need to start thinking beyond known capitalism in a modern highly automated world.

mmillin 1y ago
There are important reasons to have domestic manufacturing even if automated and not creating jobs.
- Flemlo 1y ago
  Sure but that's not enough to give people enough jobs.
mensetmanusman 1y ago
We want automation x1000, every useful automaton increases the quality of life by increasing productivity.

OfficeChad 1y ago

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zaphar 1y ago

as long as we keep inflation in check That's the trick though isn't it? MMT discourse tends to gloss over or ignore the dangers of runaway inflation and act as if you can borrow all you want with no consequence. But that part that you put in parentheses above is precisely why you can't do that. What you borrow for your budget has to be payed back later. If you just print money to do it because you borrowed more than you could afford then you inflate your currency. If inflation happens too quickly you have serious problems. It's not free money.

MichaelZuo 1y ago
It really is bizarre that huge portions of economics nowadays sidestep the fact that individuals, groups, and countries, have finite amounts of credibility. That it can be depleted and take well over an average lifetime to regain.
OGWhales 1y ago
> MMT discourse tends to gloss over or ignore the dangers of runaway inflation and act as if you can borrow all you want with no consequence. I see people say this a lot, which is odd since as far as I have seen it's one of the main points MMT people make. I'm not sure how one of the core insights of MMT has become the main criticism of it, it's kind of funny. I suppose this is because some people have taken MMT to mean that debt doesn't matter, however that is really not at all what it says. I think a more reasonable conclusion of the system MMT describes is that how money is spent matters greatly (productive vs unproductive spending), the primary purpose of taxes is keeping inflation in-check, and real resources are critical to the health of a currency.
- avidphantasm 1y ago
  Exactly. The power of MMT is that it credibly explains what taxes actually are (not a source of government funding, but control rods for inflation and a constant source of domestic demand for the currency that helps maintain monetary sovereignty) and how to make sure spending is productive and not inflationary (e.g. through the currency issuer being the employer of last resort, etc.). You might not like it, but if you want to have a vaguely capitalistic system that has long term stability, you need to employ mechanisms like this.

johnrgrace 1y ago

We don't have as problematic a deficit problem so long as reasonable sane people are running tr4e system and willing to turn on the printers when required so as not to generate excess inflation.