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: 2) by buswolley on Saturday March 01 2014, @08:06PM
You are, I think, essentially describing the differences between Modern Monetary Theory and Modern Monetary Realism perspectives. Under current law congress has given power to create money to the Fed and banks. The Fed does it through the bonds procedure, which the government agrees to pay interest for borrowing back the same money it created. However, this does not mean that Congress no longer has its Constitutional authority to mint money as it sees fit. Therefore, no matter how much the government has agreed to pay interest on the money it borrowed from itself via the bond process, Congress can always pay back that debt through the minting of money...Indeed they are constitutionally required to honor U.S. debts in full. Therefore, no real fiscal constraint can be applied to the government. The effect of that spending is a different matter. If the government spends supplying a net savings to the private sector, there should be an increase in demand. If there is too much demand relative to supply, and the capacity to ramp up production, then there is inflation. So the real point of all this is to say, how much can we inject into the economy before we have too much inflation?
subicular junctures