- May 25, 2009
- Reaction score
- quantum paradox
- Political Leaning
No actually it hasn't been. Anything I or others mentioned was not refuted but ignored as John simply circled back and stated his original subjective opinion.Actually, all if it has been refuted.
But fundamental to your argument are two real flaws, the constraint on an economy is resources and the 101's of how banks create and destroy money through loans.
Next you again misrepresent because you can't understand so project different meanings as to what I said.
I responded to an absolute statement from John that said central backs have no limitations. central banks. You removed it from its actual context and change the reference from central bank to economy.
Then you replace the word limitation with restraint. May I suggest to you a limitation, restraint, constraint are not necessarily interchangeable as having the same meaning as you assume particularly in discussions as to fiscal policies or actual banking laws and regulations that may not be one and the same or even one carrying out the other.
I also never discussed banks destroying money through loans-that is your concept not mine.
I also never stated a bank created money you repeat that. I do not use the word creation and I explained why and it was never repudiated. I showed the money John described as being brand new in fact was not brand new but recycled, i.e., reinvested, i.e., recirculated and then interest on that money attached which brought in money but the money from interest was not brand new it too was recirculated from somewhere else.
Money accumulates in value. When it does its not brand new. Part of it is its pre-existing amount that was borrowed, part of it comes from interest payments charged on it that then attach to it causing it to grow.
All money goes from one source to another. What we see simply is transferring the amounts of money from one account to another. The account it leaves diminishes, the account its transferred increases. The transfer of money does not transfer money that magically appears from thin air and this is where your MMT theory fails miserably it ignores the fundamental principle of how debts and assets are created by the recirculation of existing money not the printing of money.
Any economy faces numerous limitations, constraints and restraints, one of them being resources available to make a product to then be able to sell that product. Next MMT does not provide any 101 of banking it denies it. You clearly do not read what you think you defend. MMT creates the concept of money appearing brand new out of thin air and not transactions that transfer the location of money from one source to another which is what Banking 101 if we must use that ridiculous term explains.
Next the person you advocate on behalf of denies now that Iceland and the European financial crisis was not driven by MMT policies since the debts in these countries were foreign dominated. That makes no sense. Each country that faced a crisis chose to spend more than it was taking in by tax. Each country thought it could print money and self finance as the debt grew and they were warned over and over to stop this and engage in fiscal restraint. They did not. Saying this was caused by foreigners is an out and out crock of shit. These decisions were based by the governments of these countries. When these countries decided to borrow money from other EU countries and through the EU or IMF it was their decision. No one forced them. They chose to do this rather than deal with domestic backlash at home by engaging in financial restraint which would have been unpopular.
To falsely state it was decided upon them by foreign countries is nonsense. They chose to borrow the money. No one forced the borrowing decision on them. As their debts rose so did the interest rates. In fact the European crisis proves empirically as you would say that MMT does NOT work and so of course I would expect John to trot out some nonsense that he can ignore this because it was caused by foreigners and not the countries who chose through their own democratic institutions to run up debts. He has no other way to admit MMT failed and all one has to do is look at Iceland, Spain, Portugal, Germany in 2022, Argentina, Chile, Brazil, Cyprus, Zimbabwe, Italy.
Your entire theory is a fantasy that people can spend more than they own without consequence, governments can spend more than they collect in taxes and that debts don't matter they can be ignored, and the interest rates from those debts which cause inflation, deflation, recessions, depressions, currency and bank collapses can be ignored and skipped over as you present your theories that have not ONE country that shows they have not caused as much damage as any good they claim to if not properly balanced with many other economic approaches.