Modern Monetary Theory

Discussion in 'Markets & Economies' started by mmm....shiney!, Sep 14, 2019.

  1. Davros10

    Davros10 Well-Known Member Silver Stacker

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    Does corruption cause impoverishment, or is impoverishment an opportunity for corruption to flourish?
     
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  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Corruption definitely leads to impoverishment. Anglo-Saxon nations have a long history of protecting property rights. That legacy is absent in many other cultures.
     
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  3. leo25

    leo25 Well-Known Member Silver Stacker

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    Just after reading this i saw this video appear on a YouTube channel i follow. :) Ill give it a watch tomorrow.

     
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  4. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    They still don't get it:

    https://www.news.com.au/finance/eco...n/news-story/0eb57e21b4cefb0d35dab4cb099e0bd3

    Sorry Ben, no it's not.
     
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  5. leo25

    leo25 Well-Known Member Silver Stacker

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    Surely all these people can't be morons, i think it's more about toeing the party line. There are some narratives that can't be challenged if you want a job.
     
    Last edited: Sep 22, 2020
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  6. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Bernie Fraser = well-known ALP/The Greens sympathiser.

    Really just a case of deliberate deception for political gain.
     
  7. precious roar

    precious roar Active Member

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    You may disagree with it's effectiveness or on principal, but taxation can be viewed as an investment in our society. You pay tax that builds a road, railway, hospital or a school, which are investments in society.
     
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  8. willrocks

    willrocks Well-Known Member Silver Stacker

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    I don't know what type of mental gymnastics you've been doing. But, no, it can't be viewed that way.

    People make investments voluntarily with the goal of generating income or for appreciating asset prices.

    A right or an interest in property "vests" when it is secured. This means that the beneficiary of the right or property interest is certain to receive a specific amount, either now or in the future.
     
  9. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    They could be viewed that way, and they most certainly have been viewed that way. But that is a view that is only accurate under a monetary system where a government's revenue is constrained ie where it can't create money out of thin air eg Nauru.

    Under our modern system governments are not revenue constrained. If they want to fund hospitals or roads all they simply have to do is print a bond and someone will buy it on the primary bond market.

    The function of taxation nowadays is simply to adjust the amount of credit provided to the real economy. Giving tax cuts in no way undermines the capacity for governments to provide services. In fact if they eliminated taxes entirely governments could still fund public services. So they can cut taxes unilaterally, increase funding to the health system, buy advanced weapon defence systems, sponsor another 100 floating whale tits and build a super fast transport system without the need for any public school P+C's to have a lamington drive every week.
     
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  10. willrocks

    willrocks Well-Known Member Silver Stacker

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    Is there any point in the MMT paradigm where unrestrained spending becomes an issue, or is it encouraged?
     
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  11. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Yep. Ardent MM theorists maintain that it works up until the point that government spending brings about a rise in the cost of resources utilised by the private sector, in particular they refer to labour. If the government's fiscal policies result in labour costs rising for private firms because there is a labour drain into public activity then it's gone too far. For example in the mining boom of 2014, machinery operators were being paid by mining contractors over $100 000 in order to attract staff. This had a knock-on effect for non-mining earthmoving businesses etc but that wouldn't be seen as a problem because it wasn't created by governments.

    The function of government spending is to utilise idle resources in the private sector when there is demand for a good or service that the private sector can't or is unwilling to meet. With the ultimate goal being to get those utilised resources back into the private sphere, where it is acknowledge the greatest efficiencies are to be found.
     
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  12. willrocks

    willrocks Well-Known Member Silver Stacker

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    Does MMT have any mechanisms that recognise and prevent over stimulating the economy? How would the government recognise the point where all idle resources are utilised? Or would it rely on lagging indicators like inflation?
     
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  13. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Nothing unique to their monetary theory as far as I know. They'd probably be relying on the leading indicators that other economists rely on when they throw darts at the dartboard. Say declining jobless claims, increasing consumer confidence, PMI indexes etc. Your line of questioning is getting to the point where it'll be beyond my knowledge and I'll have to google the answers. :p

    To save time you could just look up the bloke I google here: blog. :D

    Keep an eye out here too: http://www.mmted.org
     
  14. leo25

    leo25 Well-Known Member Silver Stacker

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    I would imagine it would use the same clunky tools that the market uses today. The inflation number today is as pointless as saying the weather in Australia will be 28 degrees. One person might experience 12 degrees while another 42. I think in this day in age we can do better.
     
    Last edited: Sep 23, 2020
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  15. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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  16. leo25

    leo25 Well-Known Member Silver Stacker

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  17. willrocks

    willrocks Well-Known Member Silver Stacker

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    Does MMT take away the banks’ ability to create new money?
     
  18. leo25

    leo25 Well-Known Member Silver Stacker

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    No. It doesn't really change anything, it just describes how the system work atm without all the BS.

    The thing that is throwing everyone off is the idea that MMT is something new, its literature was well documented in the early 1900s. The only issue is atm only a few are taking advantage of it.

    Governments like having the option to always have money to spend on things they want, but like having the option to tell the people they don't have money to spend on thing the people want/need. So they create a BS story about having to balance the budget, borrowing etc etc...

    When the FED was established in 1913, it did so in partnership with the US government. (that's why primary dealer banks must clear all government "debt" auctions) It's one system that works together, it's only an illusion that it's not. Every other CB functions the same way.

     
    Last edited: Sep 24, 2020
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  19. precious roar

    precious roar Active Member

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    I never argued that is was a good thing, just that it can be viewed that way.
     
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  20. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    Mmt is great for the stack. That's all you need to understand haha.
    Just ask Argentina, Venezuela or Zimbabwe!
     

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