MMT False Counterpoint #2 - Ceteris paribus with a perfect solution. (1 Viewer)

[pdog]

But eventually a major currency will lose people's respect. And then it will start to snowball (IMO).

And here I'd like to point out what happens in a significant number of debates. In the absence of any real logic, the counterpoint starts to appeal to emotion with statements like the above.

DA doesn't really describe any actual mechanical failures in the theory, but instead relies on hopeless certainty.

Here's the thing, other than the general idea of maximizing productivity, MMT itself declares little fiscal policy guidance. Ideas such as those above might actually be true IF nothing else changes. Of course, the exact same could be said though for current policy.

Other variations on this is "the debt can't grow forever". The reality it can IF the economy grows at least as fast as the debt does. This is what has happened throughout the history of our debt. Our country isn't a person that has a fixed period of productivity. Our country could "live" forever, and so could its "debt". And no - those chain letters about the maximum lifespan of a democracy is 200 years are also meaningless.

So it appears that because MMT does not address all of our problems in a nice little package with minimal change to all other variables it cannot be correct.

The core message from MMTers I see here isn't "we'll fix all your problems", it is more "stop worrying about the debt as a big number so we can concentrate better on the real problems". The size of the debt by itself is meaningless. The size of the "debt" relative to the economy is a little more meaningful but only in the long term.

Does MMT fix all of our problems? Of course not. But it doesn't take much to understand that big policy changes are much easier under the monetary principles of MMT than they are under gold standard thinking and austerity.

 

[joG]

And here I'd like to point out what happens in a significant number of debates. In the absence of any real logic, the counterpoint starts to appeal to emotion with statements like the above.

DA doesn't really describe any actual mechanical failures in the theory, but instead relies on hopeless certainty.

Here's the thing, other than the general idea of maximizing productivity, MMT itself declares little fiscal policy guidance. Ideas such as those above might actually be true IF nothing else changes. Of course, the exact same could be said though for current policy.

Other variations on this is "the debt can't grow forever". The reality it can IF the economy grows at least as fast as the debt does. This is what has happened throughout the history of our debt. Our country isn't a person that has a fixed period of productivity. Our country could "live" forever, and so could its "debt". And no - those chain letters about the maximum lifespan of a democracy is 200 years are also meaningless.

So it appears that because MMT does not address all of our problems in a nice little package with minimal change to all other variables it cannot be correct.

The core message from MMTers I see here isn't "we'll fix all your problems", it is more "stop worrying about the debt as a big number so we can concentrate better on the real problems". The size of the debt by itself is meaningless. The size of the "debt" relative to the economy is a little more meaningful but only in the long term.

Does MMT fix all of our problems? Of course not. But it doesn't take much to understand that big policy changes are much easier under the monetary principles of MMT than they are under gold standard thinking and austerity.

MMT, you are right, does not solve all our problems.
On the other hand, it makes them worse.

 

[OrphanSlug]

I would agree that it is inaccurate to say MMT by design forces people to "lose respect" for "a major currency." It would be unfortunate to dismiss all of what MMT suggests because of a potential problem with one or more aspects of the entire set of theories and explanations.

*But,* I would argue that any policy suggestion, from really any economic theory or observance (or both,) should at least be considerate of that nation's fiscal and monetary policy credibility to that point as well as that nation's currency relation to other nations.

It makes sense to engage in as much evaluation as possible as even Keynes himself suggested doing too much in any short time-frame will inherently create a problem of not knowing what action gave the outcome observed. I would agree that it is not about "we'll fix all your problems," but it can be problematic if the theory does not match the observed practice to date.

 

[OrphanSlug]

MMT, you are right, does not solve all our problems.
On the other hand, it makes them worse.

Not necessarily, there is plenty of MMT explanation that is accurate.

 

[DA60]

And here I'd like to point out what happens in a significant number of debates. In the absence of any real logic, the counterpoint starts to appeal to emotion with statements like the above.

DA doesn't really describe any actual mechanical failures in the theory, but instead relies on hopeless certainty.

Here's the thing, other than the general idea of maximizing productivity, MMT itself declares little fiscal policy guidance. Ideas such as those above might actually be true IF nothing else changes. Of course, the exact same could be said though for current policy.

Other variations on this is "the debt can't grow forever". The reality it can IF the economy grows at least as fast as the debt does. This is what has happened throughout the history of our debt. Our country isn't a person that has a fixed period of productivity. Our country could "live" forever, and so could its "debt". And no - those chain letters about the maximum lifespan of a democracy is 200 years are also meaningless.

So it appears that because MMT does not address all of our problems in a nice little package with minimal change to all other variables it cannot be correct.

The core message from MMTers I see here isn't "we'll fix all your problems", it is more "stop worrying about the debt as a big number so we can concentrate better on the real problems". The size of the debt by itself is meaningless. The size of the "debt" relative to the economy is a little more meaningful but only in the long term.

Does MMT fix all of our problems? Of course not. But it doesn't take much to understand that big policy changes are much easier under the monetary principles of MMT than they are under gold standard thinking and austerity.

Are you serious?

All you post is theories and ideas, which mean nothing. You have offered ZERO factual, historical proof that MMT has worked.

Japan is the best example of MMT and Japan is a disaster. It gave them the lost decade and now the lost generation. With negative GDP in many times more quarters then U.S./EU, gigantic debt (almost half of their taxes just go to debt servicing), a stock market that is still less then half what it was in Dec, 1989 despite GINORMOUS government intervention, a huge trade deficit to a country that used to post one trade surplus after another and one negative data point after another.

So where is your historical, factual proof that MMT works?

Not theories....FACTS.

 

[Fenton]

And here I'd like to point out what happens in a significant number of debates. In the absence of any real logic, the counterpoint starts to appeal to emotion with statements like the above.

DA doesn't really describe any actual mechanical failures in the theory, but instead relies on hopeless certainty.

Here's the thing, other than the general idea of maximizing productivity, MMT itself declares little fiscal policy guidance. Ideas such as those above might actually be true IF nothing else changes. Of course, the exact same could be said though for current policy.

Other variations on this is "the debt can't grow forever". The reality it can IF the economy grows at least as fast as the debt does. This is what has happened throughout the history of our debt. Our country isn't a person that has a fixed period of productivity. Our country could "live" forever, and so could its "debt". And no - those chain letters about the maximum lifespan of a democracy is 200 years are also meaningless.

So it appears that because MMT does not address all of our problems in a nice little package with minimal change to all other variables it cannot be correct.

The core message from MMTers I see here isn't "we'll fix all your problems", it is more "stop worrying about the debt as a big number so we can concentrate better on the real problems". The size of the debt by itself is meaningless. The size of the "debt" relative to the economy is a little more meaningful but only in the long term.

Does MMT fix all of our problems? Of course not. But it doesn't take much to understand that big policy changes are much easier under the monetary principles of MMT than they are under gold standard thinking and austerity.

Lol......

MMTers claiming that they're ideas are being misrepresented really takes the cake.

A misreprestantion is trying to pass off the same old failed Keynesian fiscal solution as something " radical and new " by wrapping it up in monetary theory

MMT not only declares fiscal policy guidance its objective is fiscal policy guidance.

Its objective is to advocate for massive " stimulus to increase aggregate demand " and it tempers that objective by attempting to minimize the consequence of soveriegn debt

Direct Govt action, debt and or printing to directly influence demand ( cart before the horse ) isnt a strategy pushed by people who put much faith in free market principles and or faith in strategies that through incentives tax or otherwise lead to new private sector investment

 

[Gimmesometruth]

Are you serious?

All you post is theories and ideas, which mean nothing. You have offered ZERO factual, historical proof that MMT has worked.

Japan is the best example of MMT and Japan is a disaster. It gave them the lost decade and now the lost generation. With negative GDP in many times more quarters then U.S./EU,.

 

[Thrilla]

MMT, you are right, does not solve all our problems.
On the other hand, it makes them worse.

we've been operating under MMT since the 1930's.... has the sky fallen yet?

 

[DA60]

:roll:

Your source is the Japanese Government...I asked for an unbiased source, not a staggeringly biased one.

Try again...

Japan GDP per capita | 1960-2016 | Data | Chart | Calendar | Forecast

United States GDP per capita | 1960-2016 | Data | Chart | Calendar


Since 1991, Japanese GDP per capita has gone up roughly 15%.

Since 1991, the U.S. GDP per capita has gone up almost 50%.


Additionally:

Japan NIKKEI 225 Stock Market Index | 1950-2016 | Data | Chart | Calendar

https://www.google.ca/search?source...aqs=chrome.1.69i57j0j69i61j69i60l2j0.3128j0j8


Since December 1989, the Nikkei 225 has lost over 50%.

Since December 1989, the DOW has gained well over 600%.

 

[jaeger19]

And here I'd like to point out what happens in a significant number of debates. In the absence of any real logic, the counterpoint starts to appeal to emotion with statements like the above.

DA doesn't really describe any actual mechanical failures in the theory, but instead relies on hopeless certainty.

Here's the thing, other than the general idea of maximizing productivity, MMT itself declares little fiscal policy guidance. Ideas such as those above might actually be true IF nothing else changes. Of course, the exact same could be said though for current policy.

Other variations on this is "the debt can't grow forever". The reality it can IF the economy grows at least as fast as the debt does. This is what has happened throughout the history of our debt. Our country isn't a person that has a fixed period of productivity. Our country could "live" forever, and so could its "debt". And no - those chain letters about the maximum lifespan of a democracy is 200 years are also meaningless.

So it appears that because MMT does not address all of our problems in a nice little package with minimal change to all other variables it cannot be correct.

The core message from MMTers I see here isn't "we'll fix all your problems", it is more "stop worrying about the debt as a big number so we can concentrate better on the real problems". The size of the debt by itself is meaningless. The size of the "debt" relative to the economy is a little more meaningful but only in the long term.

Does MMT fix all of our problems? Of course not. But it doesn't take much to understand that big policy changes are much easier under the monetary principles of MMT than they are under gold standard thinking and austerity.

Well a few problems with that.

Orphan Slug said it perfectly with his post regarding

*But,* I would argue that any policy suggestion, from really any economic theory or observance (or both,) should at least be considerate of that nation's fiscal and monetary policy credibility to that point as well as that nation's currency relation to other nations.

However, another consideration:

The reality it can IF the economy grows at least as fast as the debt does. This is what has happened throughout the history of our debt. Our country isn't a person that has a fixed period of productivity. Our country could "live" forever, and so could its "debt

That assumptions is based on the assumption that the US economy will always grow. And historically that's a very poor assumption. We are already starting to go into a period where we have a massive aging population whose productivity will be much lower. And the likely hood is that as that population dies off, we are going to see large demographic changes that could easily cause our economy to contract.
In addition.. today's economies are global economies and thus subject to the effects of other nations. Our continued growth has been because of huge discoveries of natural resources.. and then in the last 50 years to our growth into a world power and now the preeminent world power.
Its a fallacy to think that will always be the cause. History has proven too many times with the rise and fall of civilizations.

 

[Critter7r]

:roll:

Your source is the Japanese Government...I asked for an unbiased source, not a staggeringly biased one.

Try again...

Japan GDP per capita | 1960-2016 | Data | Chart | Calendar | Forecast

United States GDP per capita | 1960-2016 | Data | Chart | Calendar


Since 1991, Japanese GDP per capita has gone up roughly 15%.

Since 1991, the U.S. GDP per capita has gone up almost 50%.


Additionally:

Japan NIKKEI 225 Stock Market Index | 1950-2016 | Data | Chart | Calendar

https://www.google.ca/search?source...aqs=chrome.1.69i57j0j69i61j69i60l2j0.3128j0j8


Since December 1989, the Nikkei 225 has lost over 50%.

Since December 1989, the DOW has gained well over 600%.

lol ....

Your charts show japan going from 7,000 to 37,000 and the US going from 16,000 to 46,000. Let's see, add the 7 .... carry the 1 ... oh. 30,000 increases for both.

Also, Japan increased more than 100% from 1970 to 1991, while the US only increased about 50%.

 

[DA60]

lol ....

Your charts show japan going from 7,000 to 37,000 and the US going from 16,000 to 46,000. Let's see, add the 7 .... carry the 1 ... oh. 30,000 increases for both.

Also, Japan increased more than 100% from 1970 to 1991, while the US only increased about 50%.

:roll:

The subject is MMT. The Lost Decade started in 1991. And Japan started going government/central bank stimulus nuts around 1991...not 1970.

Before then their debt to GDP ratio and interest rates were relatively 'normal'.

Japan Government Debt to GDP | 1980-2016 | Data | Chart | Calendar

Japan Interest Rate | 1972-2016 | Data | Chart | Calendar | Forecast | News

 

[Gimmesometruth]

:roll:

Your source is the Japanese Government...I asked for an unbiased source, not a staggeringly biased one.

Try again...

FFS, where do you think the World Bank gets its Japan data from?
Zero hedge?

You try again.

Since 1991, Japanese GDP per capita has gone up roughly 15%.

Since 1991, the U.S. GDP per capita has gone up almost 50%.

This is a non-sequitur, you were not defending the level of gains, you were supposed to support:

It gave them the lost decade and now the lost generation. With negative GDP in many times more quarters then U.S./EU​

The only significant difference was a 4 year period, 96-00.

Oh, and that is World Bank data too, so don't get yer panties in a twist.

 

[DA60]

FFS, where do you think the World Bank gets its Japan data from?
Zero hedge?

You try again.

This is a non-sequitur, you were not defending the level of gains, you were supposed to support:

It gave them the lost decade and now the lost generation. With negative GDP in many times more quarters then U.S./EU​

View attachment 67200455

The only significant difference was a 4 year period, 96-00.

Oh, and that is World Bank data too, so don't get yer panties in a twist.

:roll:

I said quarters, not annually.

Your chart is annual growth rate. I am talking about quarterly growth rate.

Again... :roll:

Japan GDP Growth Rate | 1980-2016 | Data | Chart | Calendar | Forecast

United States GDP Growth Rate | 1947-2016 | Data | Chart | Calendar

Since 1991, America dropped into the negative (QUARTERLY) only 7 times. Japan over 21 times.

That is three times as many.


The evidence is clear, Japan's MMT experiment is a huge failure.

If you need more proof...just go here http://www.debatepolitics.com/economics/161846-abenomics-good-japans-economy.html

You want to ignore the facts and believe otherwise (and it is obvious you do)...go ahead.


We are done here.

Good day.


And once again, I have no political bias in this matter.

 

[Gimmesometruth]

:roll:

I said quarters, not annually.

Your chart is annual growth rate. I am talking about quarterly growth rate.

This is too stupid, what difference is quarterly making? Do humans live only 3 months? This is noise, annual describes more meaningful rates when you are describing "decades".

The point is, they did not lose "decades" any more than we did. That is the reality of the situation.

 

[joG]

Not necessarily, there is plenty of MMT explanation that is accurate.

As long as it is not used as an excuse to expand monetary aggregates beyond the optimal limits.

 

[joG]

we've been operating under MMT since the 1930's.... has the sky fallen yet?

It has a number of times. That question does not lead us anywhere. What would be interesting is, what the economy and society would now be like, had we not increased the monetary aggregates so much and borrowed large quantities on the back of this.

 

[OrphanSlug]

As long as it is not used as an excuse to expand monetary aggregates beyond the optimal limits.

That just means relation to the economy on a trend line, but with some consideration of resource.

 

[joG]

That just means relation to the economy on a trend line, but with some consideration of resource.

Whatever you mean by that.

 

[OrphanSlug]

Whatever you mean by that.

Exactly what I said, and you are the one that said "expand monetary aggregates beyond the optimal limits."

Any one number showing our money supply or reserves is meaningless without some context to know what optimal limits is. You associate money supply and/or reserves to the size of the economy on a trend line and you might have a better picture of monetary policy credibility. Similar story when considering other relevant economic indicators to see what policy is doing for the dynamic of "monetary aggregates."

 

[pdog]

*But,* I would argue that any policy suggestion, from really any economic theory or observance (or both,) should at least be considerate of that nation's fiscal and monetary policy credibility to that point as well as that nation's currency relation to other nations.

I don't disagree. But "credibility" comes from HOW we spend deficit dollars, not the quantity itself. Frankly I expect those that rely on the hyperbole of "moochers paradise" are at least correct in their hyperbole - if we do nothing other than pay citizens to consume, then yes I suppose "credibility" might be lost with other nations. But again that is hyperbole. But what if we instead put that money into not only tangible things like infrastructure, but also spent on science and education? Doesn't that increase our currency's credibility by giving the hint that our future productivity will be more invested into solving the worlds complex problems? Isn't there real value in that?

Further, we're in this in between state right now and have a temporary advantage. We are the worlds reserve currency. While some love to point out that printing more money hurts that standing, they are purposefully ignoring the other half of the Triffin dilemma - other nations won't let the dollar stay as the reserve currency if it is suddenly in short supply. One of the reasons our currency is the reserve currency is BECAUSE we deficit spend, not just in spite of it.

It makes sense to engage in as much evaluation as possible as even Keynes himself suggested doing too much in any short time-frame will inherently create a problem of not knowing what action gave the outcome observed. I would agree that it is not about "we'll fix all your problems," but it can be problematic if the theory does not match the observed practice to date.

I'm not sure what you're saying here. Are you saying we need to maintain the status quo? Is that what Nixon did in when we "officially" started our rejection of the gold standard?

 

[joG]

Exactly what I said, and you are the one that said "expand monetary aggregates beyond the optimal limits."

Any one number showing our money supply or reserves is meaningless without some context to know what optimal limits is. You associate money supply and/or reserves to the size of the economy on a trend line and you might have a better picture of monetary policy credibility. Similar story when considering other relevant economic indicators to see what policy is doing for the dynamic of "monetary aggregates."

Admittedly I was implying the ceteris paribus clause.

 

[pdog]

Are you serious?

All you post is theories and ideas, which mean nothing. You have offered ZERO factual, historical proof that MMT has worked.

I can't imagine what kind of stone age we would be in if human kind said "well I've never seen it done, so I'm not trying it". Further you seem to have difficulty in understanding the principle of a "theory." Gravity, relativity, expansion of the universe, evolution are all laws or theories, that while we accept them, nobody pretends that we might discover something to the contrary later. Finally we HAVE historical proof. We're doing this RIGHT NOW. We've been deficit spending for a very long time and evidence is there:

http://www.debatepolitics.com/gover...ig-deficits-cause-recessions-think-again.html

Besides, what evidence have you presented that austerity and the magic of the private sector will fix everything. The evidence continues to mount in the form of corporate profits against the idea of "incentivizing" private enterprise. Private enterprise can sell all they want....as long as the demand exists. Yet you like to always like to refer to this circular magic. Seriously, who is really suspending disbelief here. MMT makes sense, your ONLY counter point is always "well someday....".

Japan is the best example of MMT and Japan is a disaster. It gave them the lost decade and now the lost generation. With negative GDP in many times more quarters then U.S./EU, gigantic debt (almost half of their taxes just go to debt servicing), a stock market that is still less then half what it was in Dec, 1989 despite GINORMOUS government intervention, a huge trade deficit to a country that used to post one trade surplus after another and one negative data point after another.

Sigh...Japan....again. We've been over the differences DA, countless times.

So where is your historical, factual proof that MMT works?

Not theories....FACTS.

Again I refer to JPs other thread.

 

[OrphanSlug]

I don't disagree. But "credibility" comes from HOW we spend deficit dollars, not the quantity itself. Frankly I expect those that rely on the hyperbole of "moochers paradise" are at least correct in their hyperbole - if we do nothing other than pay citizens to consume, then yes I suppose "credibility" might be lost with other nations. But again that is hyperbole. But what if we instead put that money into not only tangible things like infrastructure, but also spent on science and education? Doesn't that increase our currency's credibility by giving the hint that our future productivity will be more invested into solving the worlds complex problems? Isn't there real value in that?

Further, we're in this in between state right now and have a temporary advantage. We are the worlds reserve currency. While some love to point out that printing more money hurts that standing, they are purposefully ignoring the other half of the Triffin dilemma - other nations won't let the dollar stay as the reserve currency if it is suddenly in short supply. One of the reasons our currency is the reserve currency is BECAUSE we deficit spend, not just in spite of it.

I'm not sure what you're saying here. Are you saying we need to maintain the status quo? Is that what Nixon did in when we "officially" started our rejection of the gold standard?

"Credibility" comes from the decisions made in both fiscal and monetary policy, as both by most theories of economics should have association to the status of the economy and be working in concert with one another.

It is not about any one number, I have been saying that time and time again. It is about the relationship of government spending to overall GDP, the relationship of deficits to GDP, the relationship of Total Debt to GDP, etc... all on a trend line.

Looking at any one year with no other context is meaningless, so is saying "moocher's paradise." To prove something, like becoming a system dependent society, means looking at the direction we are going over the longer term. *If* we are adding more system dependent recipients than we are producers then there is merit to the "moocher's paradise" mantra.*If* we are trending upwards in Total Debt to GDP and Deficit to GDP but our economy is stalling there is a problem that has not been addressed, and we can claim fiscal and monetary policy irresponsibility. However, *if* deficit to GDP is trending flat but GDP is growing then we can conclude that policy is at a minimum holding us on a growth course.

Again, all about trends. So the "status quo" means making rational decisions with our fiscal and monetary policy as to ensure sustainable reasonable economic growth *while also* not discarding our credibility.

 

[pdog]

"Credibility" comes from the decisions made in both fiscal and monetary policy, as both by most theories of economics should have association to the status of the economy and be working in concert with one another.

It is not about any one number, I have been saying that time and time again. It is about the relationship of government spending to overall GDP, the relationship of deficits to GDP, the relationship of Total Debt to GDP, etc... all on a trend line.

I don't necessarily disagree. But there is also no way to know what those lines are and how much buffer there is. I realize that knife slices both ways but still.

To prove something, like becoming a system dependent society, means looking at the direction we are going over the longer term. *If* we are adding more system dependent recipients than we are producers then there is merit to the "moocher's paradise" mantra.

What is "system dependent". The system is the whole including the capitalistic parts. Further, what exactly is the system giving these moochers? If you're giving them a job, how are they a "moocher"?

*If* we are trending upwards in Total Debt to GDP and Deficit to GDP but our economy is stalling there is a problem that has not been addressed, and we can claim fiscal and monetary policy irresponsibility. However, *if* deficit to GDP is trending flat but GDP is growing then we can conclude that policy is at a minimum holding us on a growth course.

Not sure if this is a black and white or correlation/causation fallacy. But it's one of them. The trend rate, long term outlook, and what we spend the deficit dollars on are all factors.

Again, all about trends. So the "status quo" means making rational decisions with our fiscal and monetary policy as to ensure sustainable reasonable economic growth *while also* not discarding our credibility.

Yes, but over what time period? 10 years? 50 years?