SoylentNews is people
SoylentNews
buswolley writes:
"Is the United States or the EU really too poor to afford to build the things each needs to maintain prosperous nations? Modern Monetary Theory (MMT) posits that America is not too poor in real resources to do the things it needs to do, and now proponents of the theory have adapted the rules of the classic board game Monopoly to demonstrate their case. For those that do not know what modern monetary theory is about, a suitable primer on the topic might be Warren Mosler's Seven Deadly Innocent Frauds of Economy Policy or Diagrams and Dollars, either as a book on Amazon or on-line for free at NewEconomicsPerspectives.org.
While the Modern Monetary Theory perspective tends to elicit disbelief and even rage, I think it is important for any scientist and geek to weigh the evidence carefully, and by doing so understand better about how and why money is created and destroyed."
(Score: 5, Interesting) by gallondr00nk on Saturday March 01 2014, @03:30PM
Sorry, couldn't think of a better subject.
This'd be a good time to point to Bill Mitchell's [economicoutlook.net] blog. He writes some very illuminating stuff.
For me, financial austerity is possibly one of the most damaging ideologies in recent times. Not only is it not true, it is causing immense harm, mainly to the poorest in society.
If you follow the logic of MMT, you can see why. Take welfare payments for example. Welfare payments aren't just a safety net, but a direct economic stimulus, in the same way a large public works project would be. The money is spent on rent, food and clothing. This helps the private sector out and increases economic activity.
It doesn't go far enough for me. I'd say the solution in an age of reduced labour demand is simply to grant everyone a generous enough stipend to participate fully in the economy. I don't just say that as a liberal minded person, but also one who would like to see genuine prosperity for me and my descendents.
Sdaly I live in the UK, where our brain damaged politicians follow austerity to the letter. Guess what one of the first targets of the austerity program was? Welfare.
So not only were we throwing the poorest in society under the bus during a recession, we are still causing direct economic harm by doing so. It's like sabotaging your own economy.
The longer people fail to understand how fiat currency works, to longer we subject our fellow beings to completely unnecessary misery, and the longer we cripple our own economy.
One quick note: There's actually one place where the theory of MMT doesn't work in practice, the Eurozone. This is because the member nations *don't* have the ability to produce their own currency. This leads to the sort of tragedy we've witnessed in Greece and some of the poorer member states recently. If you're a betting person, bet on the Euro failing in the next twenty years.
(Score: 5, Interesting) by buswolley on Saturday March 01 2014, @04:46PM
EU is a very sad story. EU is pursuing the worst of policies: Austerity AND high taxes.
The perfect way to kill an economy! Unfortunately, those with ideological blinders will tend to point to the lack of stimulus, or to the high tax rate, but not to both the lack of stimulus and the high taxes, and thus learn nothing.
If we accept the stereotypical liberal and conservative fiscal platforms in America (i.e. tax and spend liberal, low tax low spend conservative), we can see that both ideologies get the policies only half right. At least until the point of low unemployment and a healthy inflation rate, a growing economy needs low taxes AND high government spending (i.e. increases in net private savings).
subicular junctures