Financial Wikileaks is not a bad idea at all, but at least we have Golem XIV.

Keep up the good work.

BTW : the fundamental flaw in MMT and all related economic theories is that they start with a model (the more complex , the more clever they think they are) and then try the fit the real world into the model. They end up with a contorted mess. Instead they should do what the Austrians do and assume that economic calculation is too complex to model. You would have to find the meaning of life itself to model it. Working from that premise The Austrians then say the only way to “manage” an economy is to ensure that the market is free to do its calculation. The market is the model, the model is the market. What is The Market ? People going about their daily business. To let people be free to do this, is the most democratic thing in the whole world.

The statists cannot see this, because they have a model and the world has to fit into their model. That is the most draconian , anti-democratic concept in the whole world. But they seduce the people, they promise them a chimera of cradle to grave state support, and of course it always turns out to be a lie and the whole shebang always collapses in ruin.

“BTW : printing money without growth is called stagflation. What we now have.”

No it doesn’t Gary and we don’t have stagflation – that’s not how the monetary circuit works.

Check M3, which has to grow at 5% PA for the economy to stand still – it’s currently at 3-4% PA.

When there was real stagflation in the mid 1970s it was growing at 30-40% PA.

China has used MMT since 1980 to finance projects for it’s China Investment Corporation. Infact, this method has been central to it’s 10% GDP growth PA!

Pat,

I get accused of repeating myself, but obviously I don’t repeat myself enough.

When I say “there is an oversupply”, of course it must be referenced to something, I just left it out because I have said it so many times , I thought it was understood. Obviously not.

Inflation is actually an oversupply of money wrt to the DEMAND for goods and services in the economy. The demand for goods and services is equivalent to the amount of transactions that are demanded and there has to be the corresponding amount of money to consumate these transactions. If there is more money then there is inflation, less and there is deflation.

But, nowhere from this is your conclusion about labour and full employment and inflation valid. It is illogical. All the consumer demands are ALWAYS satisfied by a smaller subset of goods and services than that would require full employment. Because in any case there is ALWAYS a component of people who are consumers of goods and services that are not in the labour market. eg. They call them pensioners and the retired. That blows your theory out of the water. It makes yours and MMT premise false, and probably makes all that flows from this false premise also false.

It is this Marxist/neo-classical notion of full employment that leads us to Keynes concluding that some people are going to have to be employed digging holes and filling them up again.

Gary

“Inflation, to sum up, is the increase in the volume of money and bank credit in relation to the volume of goods” (from your earlier Hazlitt quotation). Inflation is not an oversupply of money, “period”; it is, as your quote explicitly states, an oversupply of money relative to the volume of goods available to be purchased in the economy. Since these goods include the labour of the working population, inflation cannot be considered a serious risk until 100 per cent employment has been achieved. The fact that your own quotation supports what Mike Hall said rather suggests that it is yourself whose thinking is tangled up in knots.

Thanks for the link.

It’s 1hr 20mins, but I would really recommend watching.

Especially those struggling with the kind of questions Patricia was asking above. A far more extensive answer than I could give here, all well explained in plain English.

I really like Mary’s concept of ‘Sufficiency Economics’.

(It’s all MMT consistent, correctly describing the true functions & possibilities of the monetary systems we already have,)

Well said Andrea. Thank you and welcome.

Mary Mellor @ Schumacher College: Bringing Economics Down to Earth

http://www.youtube.com/watch?v=9F-DuD6T_i0

Cutting half the funding doesn’t save much money, but will rapidly create (besides the direct effect on children and families) expenditure elsewhere – unemployment, police, emergency, medical costs, repairing vandalism, fostering, prison. I cannot judge but guess that these extra costs will surpass the original outlay very quickly. Policy makers – even in the US – know this. They know it. Note that the extra costs will, for a large part, be paid to repressive, controlling bodies.

Cutting in half is typical. It looks ‘reasonable‘ – one does not deny the positive aspects, or the existence of, the programs, but sadly, the money is no longer there… Depending on how the cuts are made, one either saps the whole system which then can no longer function, leading to its demise, or one creates differences between different user groups, different localities, etc. thus promoting strife, competition, etc.

So the motivation for the cuts rests on beliefs, plans, considerations.. that fall out of the scope of what is commonly seen as ‘proper social policy.’

“But at my back I always hear
Time’s winged chariots drawing near”… Andrew Marvell, in “To his Coy Mistress”, in the 17th century.
My personal observation leads me to believe that the more we engage beyond the mainstream, the more we engage beyond our neighborhood… the less we live in our neighborhood, the less we see, do in the physical places where we are leading our lives, and where our bodies are.
Our behavior is extremely self destructive, sir, and the beliefs that underpin it will continue contributing to taking us down.. further.
We seem to think that we are large scale creators, and not… creatures anymore. That we… control, can control and WILL control much more than it is.. REASONABLY possible for us to control. This.. hubris is one of our greatest problems.
But…. we are creatures, with real, physical and spiritual needs which need to be addressed, and are not being addressed in a meaningful way at this time.
As a friend said one day… it is at the point where we can now send any message almost everywhere on the planet instantaneously that we.. now have nothing to say anymore.
I believe this. Some people may think this statement an exaggeration.
For me, it is not. Our civilization is vapid, spiritually and culturally empty at this time, and continuing on this path.
Odd that on the blogs, and during our last election, nothing ? little ? was said about the euro crisis being.. a political one.
Is it a coincidence that at the time when the big American colonizer is busy colonizing the world that produced its civilization, and with a.. DEBT that makes European countries’ debt look like a drop in the bucket, the Greek crisis suddenly appeared ?
When you are going down, what better tactic than accusing your neighbor of being bankrupt, and living beyond HIS means, when your own are in question
?
For historical and ideological reasons, the countries that produced American culture, and colonized the new world cannot attack it as being the economic aggressor it has become… The United States STILL remains the ultimate Enlightenment experiment, the.. NEW ATLANTIS in the European psyche.
So… we will bite the bullet…and turn our heads in the other direction, while the colony… takes us down…