MMT has the money creation process nailed, that is, double entry bookkeeping. Full stop. Unfortunately it has not discovered the current anomalous monetary concept/paradigm or, more importantly, the new paradigm concept and how to most efficaciously apply it. Historically new paradigms are in complete conceptual opposition to the current paradigm. The current monetary paradigm which has been in effect for the entire length of human civilization is Debt ONLY. The private banks create upwards of 97% of all new money every year ONLY as debt. The word only designates the current monetary paradigm as a monopoly paradigm. The last monopoly paradigm we dealt with was Salvation Via Roman Catholic Sacraments ONLY, and the result of that dominating fact was The Reformation. We require a monetary refrormation and as the concept in complete opposition to Debt as in indebtedness/burden to repay ONLY...is Strategic Monetary Gifting most efficaciously via a 50% Discount/Rebate policy at retail sale. For the entire policy program for the new monetary paradigm go here: https://www.amazon.com/Wisdomics-Gracenomics-New-Monetary-Paradigm-Policies-ebook/dp/B0C49B9PX7/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1552358772&sr=1-1-catcorr
Most MMT'ers know these other paradigms. You can say popular MMT does not, I'd agree.
You cannot escape "debt as the need to repay." You might in some twisted legal sense, but morally people like to repay favours, in their heads. They hold private money as "IOU" records of account in their heads! At least I do. I presume I am not atypical. It is not a bad thing for heavens sake. It is a good thing, the best goodness in economic relations. "Debt" is not a dirty word. As per Mitchell-Innes: one person's debt is another's credit. The only bad thing is if it was imposed unfairly, not in reciprocity. Our governments are imposing debt upon the poorest unfairly, it is not reciprocity.
Yes, commercial banks create higher circulation via bank credit/debt records. Which can be a good thing too.
But *(a)* this is only with license from the government, so "private" is not the appropriate adjective. Privately owned, yes, not privately monied. The bank deposits are still government scorepoints (administered by a private firm by state charter), no matter what Randy Wray may say otherwise. You can check the Acts of Parliament. No one but government insures the bank deposits.
*(b)* this 97% odd add to circulation (flow) is not NET new currency (stock). It is NET negative currency stock owing to the need to repay with interest, if you sum up *all* records of credit and debit. If not, some banker made an accounting mistake. Thus bank credit serves a dual purpose, it is also a pro-inflationary bias, and after savings desires being met (circulation leakage) drives *additional* demand for the currency over and above tax liabilities.
I prefer the natural system of credit and debt relations, it is decent reciprocity, natural, good, anthropological, even mammalian, even deeper in biology I think, fundamental, even quantum mechanical! But in the political realm for guaranteeing justice it depends on people running the system making policy who understand the system. Unfortunately that is not a banal tautology. It also entails those people willing to tolerate a heap of democracy. Hence the constant grief I get from people accusing MMT'ers of being naïve ("No, you're the naïve one." "No... you are." "No, it is you." "Oh this is not an argument." "Yes it is." ...).
But if achieved then the policy focus can be on moral and real outcomes, and the currency system (records of credit and debit) is pure background, pure accounting records of little life & death consequence, because we get the moral economics right. MMT offers this. But we must overlay spiritual economics on top, which we presently do not have in the offices of government. It is not a flaw of MMT.
I myself far prefer a Gesell currency system, plus a Salaire áʼ Vie. But you cannot force a new paradigm on a population without painfully slow education, unless one is willing to become an authoritarian dictator, which one is not. (I am not even willing to become a democratically elected dictator, it is far too much work🤣).
I didn't say debt was bad per se. I said the concept of Debt ONLY was a monopoly concept for the creation and distribution of new money. All monopolies are dominating and hence unethical exactly like the Roman Catholic monopoly paradigm I referenced.
What we need is to strategically integrate the new paradigm of Gifting into the Debt Only system, and a 50% Discount/Rebate at retail sale is the first and best policy to accomplish this because:
1) Everyone participates in and/or is economically effected by the the price at retail sale which makes it by definition the single aggregative as in macro-economic point in the entire economic process (thank you non-Nobel prize committe in economics).
2) Hence it is the perfect place to implement monetary policy as per above because
a) its use of the accounting operations of equal debits and credits that sum to zero IOW a 50% credit of retail price to the individual and a reciprocal debiting of that discount back to the merchant granting it implements BENEFICIAL deflation for the individual by increasing the money supply (the heads of the orthodox explode) and b) there is no moral hazard because with the rebate the commercial agents receive their entire price and also receive the benefit of the demand for every one of their goods and services being potentially doubled (the heads of the orthodox explode again).
3) It amazes me that MMTers who correctly point at the fact that our money is created by accounting/equal debits and credits that sum to zero, don't stand up and cheer when those same operations at retail sale resolve inflation, chronic individual monetary austerity and create a potential doubling of demand for commercial agents' goods and services which is the very definition of good economic times.
If I may be so bold I would put my 50% Discount/Rebate policy at retail sale in the same category as Kepler's discovery that orbits were not perfect circles but ellipses which is what made Copernicus' helio-centrism actually be more accurate in predicting planetary movements than Ptolemaic cosmology.
In other words it takes Mosler, Keen and Hudson's insights that accounting is how money is created and finds the most efficacious point in the entire economic process to both resolve the anamolies of the current paradigm of Debt Only and tremendously benefit EVERYONE at the same time.
Yes. It is also all the more incredible since humans created the laws of accounting, not physical laws. It's like collective professions forgot their own laws, and spread a fake-religion of economic austerity.
"If you can think of a more creative way to get these same points across to people, do let me know."
I think just focus on the younger people. Once you get to a certain age, or status, it's often too hard to admit your wrong (not including the rare older people that listen). I based this off life experience, and the experience of people like Bill Mitchell, Steph Kelton and Randy Wray.
Thanks for the welcome, but I’m in Canada and hopeful that Carney, even though I’m sure he doesn’t use an MMT lens to manage the monetary system, will follow through with the “investment” (spending) commitments he made during the election. At least he never mentioned anything about balancing the budget or spending cuts. I’m hopeful. Now…if only he would make education/training a job guarantee instead of a way to acquire soul-crushing debt.
You are probably right. But there is a faint Mark Carney memory in my brain from a talk Warren had with Christian and Patricia. Could be wishful thinking.
Thanks for the follow up. I’m optimistic now that the ignoramos con candidate was voted out in his own riding (that he held for 20-years). He was always going on about “balancing the budget” and other 3-word slogans.
I still wish Carney had a majority. It would make his work easier.
Thanks for taking an interest and investigating. Cheers.
The Chief Secretary and Chief Economist of the NZ Treasury are indeed a two-man Neoliberal deep-state. Since all other policy is concomitant on government's willingness to pay, these two indeed "rule them all".
MMT has the money creation process nailed, that is, double entry bookkeeping. Full stop. Unfortunately it has not discovered the current anomalous monetary concept/paradigm or, more importantly, the new paradigm concept and how to most efficaciously apply it. Historically new paradigms are in complete conceptual opposition to the current paradigm. The current monetary paradigm which has been in effect for the entire length of human civilization is Debt ONLY. The private banks create upwards of 97% of all new money every year ONLY as debt. The word only designates the current monetary paradigm as a monopoly paradigm. The last monopoly paradigm we dealt with was Salvation Via Roman Catholic Sacraments ONLY, and the result of that dominating fact was The Reformation. We require a monetary refrormation and as the concept in complete opposition to Debt as in indebtedness/burden to repay ONLY...is Strategic Monetary Gifting most efficaciously via a 50% Discount/Rebate policy at retail sale. For the entire policy program for the new monetary paradigm go here: https://www.amazon.com/Wisdomics-Gracenomics-New-Monetary-Paradigm-Policies-ebook/dp/B0C49B9PX7/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1552358772&sr=1-1-catcorr
Most MMT'ers know these other paradigms. You can say popular MMT does not, I'd agree.
You cannot escape "debt as the need to repay." You might in some twisted legal sense, but morally people like to repay favours, in their heads. They hold private money as "IOU" records of account in their heads! At least I do. I presume I am not atypical. It is not a bad thing for heavens sake. It is a good thing, the best goodness in economic relations. "Debt" is not a dirty word. As per Mitchell-Innes: one person's debt is another's credit. The only bad thing is if it was imposed unfairly, not in reciprocity. Our governments are imposing debt upon the poorest unfairly, it is not reciprocity.
Yes, commercial banks create higher circulation via bank credit/debt records. Which can be a good thing too.
But *(a)* this is only with license from the government, so "private" is not the appropriate adjective. Privately owned, yes, not privately monied. The bank deposits are still government scorepoints (administered by a private firm by state charter), no matter what Randy Wray may say otherwise. You can check the Acts of Parliament. No one but government insures the bank deposits.
*(b)* this 97% odd add to circulation (flow) is not NET new currency (stock). It is NET negative currency stock owing to the need to repay with interest, if you sum up *all* records of credit and debit. If not, some banker made an accounting mistake. Thus bank credit serves a dual purpose, it is also a pro-inflationary bias, and after savings desires being met (circulation leakage) drives *additional* demand for the currency over and above tax liabilities.
I prefer the natural system of credit and debt relations, it is decent reciprocity, natural, good, anthropological, even mammalian, even deeper in biology I think, fundamental, even quantum mechanical! But in the political realm for guaranteeing justice it depends on people running the system making policy who understand the system. Unfortunately that is not a banal tautology. It also entails those people willing to tolerate a heap of democracy. Hence the constant grief I get from people accusing MMT'ers of being naïve ("No, you're the naïve one." "No... you are." "No, it is you." "Oh this is not an argument." "Yes it is." ...).
But if achieved then the policy focus can be on moral and real outcomes, and the currency system (records of credit and debit) is pure background, pure accounting records of little life & death consequence, because we get the moral economics right. MMT offers this. But we must overlay spiritual economics on top, which we presently do not have in the offices of government. It is not a flaw of MMT.
I myself far prefer a Gesell currency system, plus a Salaire áʼ Vie. But you cannot force a new paradigm on a population without painfully slow education, unless one is willing to become an authoritarian dictator, which one is not. (I am not even willing to become a democratically elected dictator, it is far too much work🤣).
I didn't say debt was bad per se. I said the concept of Debt ONLY was a monopoly concept for the creation and distribution of new money. All monopolies are dominating and hence unethical exactly like the Roman Catholic monopoly paradigm I referenced.
What we need is to strategically integrate the new paradigm of Gifting into the Debt Only system, and a 50% Discount/Rebate at retail sale is the first and best policy to accomplish this because:
1) Everyone participates in and/or is economically effected by the the price at retail sale which makes it by definition the single aggregative as in macro-economic point in the entire economic process (thank you non-Nobel prize committe in economics).
2) Hence it is the perfect place to implement monetary policy as per above because
a) its use of the accounting operations of equal debits and credits that sum to zero IOW a 50% credit of retail price to the individual and a reciprocal debiting of that discount back to the merchant granting it implements BENEFICIAL deflation for the individual by increasing the money supply (the heads of the orthodox explode) and b) there is no moral hazard because with the rebate the commercial agents receive their entire price and also receive the benefit of the demand for every one of their goods and services being potentially doubled (the heads of the orthodox explode again).
3) It amazes me that MMTers who correctly point at the fact that our money is created by accounting/equal debits and credits that sum to zero, don't stand up and cheer when those same operations at retail sale resolve inflation, chronic individual monetary austerity and create a potential doubling of demand for commercial agents' goods and services which is the very definition of good economic times.
If I may be so bold I would put my 50% Discount/Rebate policy at retail sale in the same category as Kepler's discovery that orbits were not perfect circles but ellipses which is what made Copernicus' helio-centrism actually be more accurate in predicting planetary movements than Ptolemaic cosmology.
In other words it takes Mosler, Keen and Hudson's insights that accounting is how money is created and finds the most efficacious point in the entire economic process to both resolve the anamolies of the current paradigm of Debt Only and tremendously benefit EVERYONE at the same time.
Yes. It is also all the more incredible since humans created the laws of accounting, not physical laws. It's like collective professions forgot their own laws, and spread a fake-religion of economic austerity.
"If you can think of a more creative way to get these same points across to people, do let me know."
I think just focus on the younger people. Once you get to a certain age, or status, it's often too hard to admit your wrong (not including the rare older people that listen). I based this off life experience, and the experience of people like Bill Mitchell, Steph Kelton and Randy Wray.
The ignorance by everyone in power is grinding me down with frustration. It is like every airline pilot believing they are piloting gliders.
I hear you Nick. Hang in there. It is a long game we have to play.
Also, you are welcome in New Zealand!
Thanks for the welcome, but I’m in Canada and hopeful that Carney, even though I’m sure he doesn’t use an MMT lens to manage the monetary system, will follow through with the “investment” (spending) commitments he made during the election. At least he never mentioned anything about balancing the budget or spending cuts. I’m hopeful. Now…if only he would make education/training a job guarantee instead of a way to acquire soul-crushing debt.
Have to share with you this (delicious, hope he bites): https://moslereconomics.com/to-mark-carney-prime-minister-of-canada/
That would be delicious!
Good to know! I do believe Warren had indoctrinated Carney in The Way of The Moslerians.
But he might be the type not to say the fiscal three letter spell in public?
(Or I might be thinking of another ex central banker or lower official?)
You might be thinking of John Carney... https://moslereconomics.com/2011/12/27/john-carney-on-mmt-and-austrian-economics/
You are probably right. But there is a faint Mark Carney memory in my brain from a talk Warren had with Christian and Patricia. Could be wishful thinking.
I hope you are right. And I hope Mark is allowed to spend (he has a minority).
Thanks for the follow up. I’m optimistic now that the ignoramos con candidate was voted out in his own riding (that he held for 20-years). He was always going on about “balancing the budget” and other 3-word slogans.
I still wish Carney had a majority. It would make his work easier.
Thanks for taking an interest and investigating. Cheers.
The Chief Secretary and Chief Economist of the NZ Treasury are indeed a two-man Neoliberal deep-state. Since all other policy is concomitant on government's willingness to pay, these two indeed "rule them all".