MMT False Counterpoint #1 - Inflation/Hyperinflation

pdog · Apr 26, 2016

Moderate Right said:
Well, I guess we have it in black and white now. You're perfectly fine with extending the national debt from 20 trillion dollars up to 250 trillion dollars. Then (or sooner) when inflation rears it's ugly head, our economy will tank and we will still owe 250 trillion dollars. The national debt doesn't just go away when inflation hits, it's still there and I wouldn't want to be around when the economy tanks and then we still owe 250 trillion dollars at the worst possible time. Oh, wait a minute, I forgot you guys say that national debt isn't real debt anyway because we drive fiat cars or something like that. Oh no, it wasn't fiat cars, it was those fiat money trees planted in back of the treasury. Ever hear of a drought or bug problems killing trees? What happens when the money trees die?

Maybe it's time for another refresher course:

https://www.youtube.com/watch?v=IYRwpgrUcpw

This is all hyperbole and purposefully ignoring my statement. If our GDP is 250 Trillion then we will have the same "debt" to GDP ratio that we do now. When is inflation going to hit and why? What time line are you talking about? You're committing the very same mistake that this tread identified since #1.

Moderate Right · Apr 26, 2016

pdog said:
This is all hyperbole and purposefully ignoring my statement. If our GDP is 250 Trillion then we will have the same "debt" to GDP ratio that we do now. When is inflation going to hit and why? What time line are you talking about? You're committing the very same mistake that this tread identified since #1.

What makes you think the GDP will be 250 trillion? You're just assuming. The fact is that the debt to GDP ratio is around 100% now but you MMT'rs say that the debt can go much higher with the current GDP. So you're argument isn't even valid. Once again, there are no limits from you guys.

Moderate Right · Apr 26, 2016

pdog said:
In order with what? A balanced budget?

Are you saying that you don't ever want our financial house in order? Of course you are. To you it is in order no matter how much we spend, no matter how much the national debt is, and no matter how much money we print. In fact, that is what you call having our house in order, constant deficit spending to grow the economy. Let it never stop.

pdog · Apr 26, 2016

Moderate Right said:
Are you saying that you don't ever want our financial house in order? Of course you are. To you it is in order no matter how much we spend, no matter how much the national debt is, and no matter how much money we print. In fact, that is what you call having our house in order, constant deficit spending to grow the economy. Let it never stop.

All that "no matter" is all a bunch of hyperbole. We've given you plenty of actual bounds (title of this thread again).

So you want to pay back the "debt" right.

1. Imagine you're a company in China or anybody else that owns our bonds.
2. Somebody in the U.S. just bought your goods.
3. You now have USD
4. You don't want to spend the USD on so you save it by buying a bond.

Here's where you're going to have to fill in your way of thinking for me.
5. So the U.S. government cuts spending
6. This hurts your business since there is new less money coming into the u.s. economy and therefore less money to buy your goods
7. To boot, the u.s. government uses this new surplus (assuming that there is a surplus considering the chance of a recession is now very high with the reduced economic activity), to force you out of your bond (if it were possible to break the terms of the bond) and give you back the USD you didn't want to spend in the first place and now you can't even earn a return.

Please help me understand how you believe this senario is good for our economy.

pdog · Apr 26, 2016

Moderate Right said:
What makes you think the GDP will be 250 trillion? You're just assuming. The fact is that the debt to GDP ratio is around 100% now but you MMT'rs say that the debt can go much higher with the current GDP. So you're argument isn't even valid. Once again, there are no limits from you guys.

I have no idea what it will be. All I know is that a 250Trillion dollar debt is meaningless without knowing the context.

Moderate Right · Apr 26, 2016

pdog said:
All that "no matter" is all a bunch of hyperbole. We've given you plenty of actual bounds (title of this thread again).

So you want to pay back the "debt" right.

1. Imagine you're a company in China or anybody else that owns our bonds.
2. Somebody in the U.S. just bought your goods.
3. You now have USD
4. You don't want to spend the USD on so you save it by buying a bond.

Here's where you're going to have to fill in your way of thinking for me.
5. So the U.S. government cuts spending
6. This hurts your business since there is new less money coming into the u.s. economy and therefore less money to buy your goods
7. To boot, the u.s. government uses this new surplus (assuming that there is a surplus considering the chance of a recession is now very high with the reduced economic activity), to force you out of your bond (if it were possible to break the terms of the bond) and give you back the USD you didn't want to spend in the first place and now you can't even earn a return.

Please help me understand how you believe this senario is good for our economy.

There's that new word I've been waiting for. First it's irrelevant, lately it's been a bandwagon fallacy, now it's hyperbole. What's the next phrase to distract from the conversation?

Moderate Right · Apr 26, 2016

pdog said:
I have no idea what it will be. All I know is that a 250Trillion dollar debt is meaningless without knowing the context.

Another vote for no limit as you say you have no idea what it will be. Why don't you guys just go with there are no limits to spending and printing money, and stick with it? Why the constant charade? You know, it sounds pretty darn good just to say that as long as we continue spending more and more and printing more and more money every single year the economy grows and the more the economy grows the more we can spend and the more we can print, into "infinity and beyond". Oh wait, a minute, I'm sorry, I'm letting someone else do my talking for me again. (plagiarized slogan)

Absentglare · Apr 26, 2016

Moderate Right said:
There's that new word I've been waiting for. First it's irrelevant, lately it's been a bandwagon fallacy, now it's hyperbole. What's the next phrase to distract from the conversation?

I don't know- which fallacy are you going to commit ?

Notice you didn't actually commit any fallacies here because you didn't even try to make an argument, you just painted yourself the victim. Ironically, this serves as a cowardly deflection from the argument carefully prepared for your benefit.

Moderate Right · Apr 27, 2016

Absentglare said:
I don't know- which fallacy are you going to commit ?

Notice you didn't actually commit any fallacies here because you didn't even try to make an argument, you just painted yourself the victim. Ironically, this serves as a cowardly deflection from the argument carefully prepared for your benefit.

Me not making an argument? You're the one implying the great dodge every post, not making an argument at all. Critter was the only one man enough to try answering my questions, even though all he did was mention the same old talking points that didn't really answer the questions.

pdog · Apr 27, 2016

Moderate Right said:
There's that new word I've been waiting for. First it's irrelevant, lately it's been a bandwagon fallacy, now it's hyperbole. What's the next phrase to distract from the conversation?

are you going to answer my question or are you going to cower out because I used a big word to ACCURATELY describe your post?

pdog · Apr 27, 2016

Moderate Right said:
Another vote for no limit as you say you have no idea what it will be. Why don't you guys just go with there are no limits to spending and printing money, and stick with it? Why the constant charade? You know, it sounds pretty darn good just to say that as long as we continue spending more and more and printing more and more money every single year the economy grows and the more the economy grows the more we can spend and the more we can print, into "infinity and beyond". Oh wait, a minute, I'm sorry, I'm letting someone else do my talking for me again. (plagiarized slogan)

that's a lot of words for my simple declaration that your random debt limit has no context.

You randomly picked around 10x our current debt and implied the world would implode at that level. Yet this has happened a number of times. Why should I take you any more seriously now than I would have in the 70s?

Ntharotep · Apr 27, 2016

Absentglare said:
Yeah, i tried to avoid the erosion of savings by saying that the government would hand out the new dollars based on worth.

I was basically trying to say that if every dollar amount was multiplied by 10 courtesy of Uncle Sam, the only thing that would change are the numbers. Nobody would actually be any less poor. While i can understand why drastic instability could be perceived as eroding our dollars credibility, i am skeptical to how that would translate into being bad for us.

And i think a small amount of inflation is a good thing, it can help to apply some pressure to spend or ensure that savings is invested.

That is fine if your economic classes are keeping up with the inflation, otherwise you begin to have less of a middle gap between poor and wealthy which is not a good thing, from a prosperity sense.

Now I'm holding out for the #2 push back, devaluing the USD. Supposedly there is a trend that when the Government introduces a significant amount of money into the system, the USD is devalued. However, no economist seems certain if this is the only cause, if the devalue is a lot, or how much of a devalue will actually hurt the U.S. economy at home and on the world stage.
The only figures I find, are generally when the USD has devalued with very few trends associated with it so I would be skeptical at best if it ties directly to the Government introducing "significant amounts of money" into the flow as some claim. But I am beyond a layman on the topic. I just find it very interesting.
But that's another topic.

Critter7r · Apr 27, 2016

Moderate Right said:
The great part is, austerity isn't even really necessary if we keep our financial house in order in the first place.

pdog said:
In order with what? A balanced budget?

Moderate Right said:
Are you saying that you don't ever want our financial house in order? .....

Answering an apparently honest question with an apparently rhetorical question isn't furthering the debate in any meaningful way.

If we can't just have an honest discussion where when someone asks a question then what are we doing? I realize it's just the internet and nothing we do here will change anything, but people take these adversarial skills that they learn to get away with on the internet where there are no consequences to go and be assholes in the real world. There they become pains in the asses for people actually trying to work towards the betterment of actual people IRL with their inane, insinuating, condescending, excessively-confrontational, contemptuous arguments that are full of rhetoric and do nothing to help anyone.

mmi · Apr 29, 2016

DA60 said:
MMT is yet another theory championed by macroeconomic ignoramuses who do not understand how the real world works

This from someone who:

continually rebarfs garbage he reads on ZipHedge, cherry-picking some monthly statistic to indicate that the labor market is doing poorly when in fact it's been steadily improving for nearly six-and-a-half years
challenges others to "prove" that BLS isn't "lying" to defend the administration through methods like seasonal adjustment — an incredibly stupid assertion
doesn't understand that money velocity has dropped below the normal range, not because the economy is weak, but because the money stock has increased substantially due to Fed actions in response to the economic collapse in 2008
describes Janet Yellen as a "macroeconomic ignoramus"

>>propose theory after theory that makes the world a happy place without having to deal with all that 'free market' awfulness.

Just another worthless load of crap. What are the other "theories" in this list of "theory after theory"?

>>It's Moocher's Paradise. And it will never work in the long run.

What won't work out in the long run is yer dream of a dramatic increase in the price of Precious.

>>fiat money is only worth what people think it is worth. And if people think it is worthless, it IS worthless.

And yer efforts to convince people that the US dollar is "worthless" are laughably pathetic.

>>The only reason fiat currencies have lasted so long is …

they work very well if the full faith and credit of the nation issuing them is defended and preserved. The American people, through their hard work, high productivity, and remarkable innovative skills, will grind these naysayers into dust. What does NOT work effectively is a currency tied to a gold standard, with its inherent restrictions and instability.

>>MMT is what happens when people who do not understand real world macroeconomics...think they do.

Running around yelling that the sky is falling is what gold bugs do.

>>You cannot learn about macroeconomics from a textbook or a professor...you HAVE to learn about it in the real world.

You should try reading some respected academic analyses and stop making a fool of yerself.

>>Because economics is not just about numbers...it's mostly about people and emotions.

And efforts to frighten people into panicking about the inevitable hyperinflation that's always just around the corner will fail miserably.

DA60 said:
the worst thing that happens with 'austerity' is things don't boom as much as maybe they could have and we end up with less debt. Hardly oomsday.

I'd say the worst thing that can happen with austerity is … something like the GOP SSE Great Depression, which of course led to the rise of Nazism in Germany and a world war that was doomsday for more than fifty million human beings.

Objective Voice · Apr 29, 2016

David_N said:
Because when there is plenty of supply and not enough demand..
Also, when it comes to QE, reserves don't enter into people's hands.

That last part isn't necessarily true.

Where QE is concerned, money is cheap (to borrow). As such, businesses will sometimes borrow money to meet payroll. When they do that borrowed money does find its way into a limited number of people's hands.

You could also argue that hedge fund managers will borrow money on the cheap to make bets (Code for "buy options") on margin (Code for "borrowing money to invest in stocks"). Since stocks are another way businesses make money, it could be argued that QE indirectly puts money in people's hands. It just depends on how you think of it.

MMT makes sense because it's a common sense, practical, more realistic way of how money works. In many ways, it's an old school way of economics, i.e., for every dollar earned, a dollar is spent and that dollar is never really taken out of circulation because it's constantly changing hands being spent, invested, saved...spent, invested, saved...repeat.

Moderate Right · May 2, 2016

mmi said:
This from someone who:

continually rebarfs garbage he reads on ZipHedge, cherry-picking some monthly statistic to indicate that the labor market is doing poorly when in fact it's been steadily improving for nearly six-and-a-half years

challenges others to "prove" that BLS isn't "lying" to defend the administration through methods like seasonal adjustment — an incredibly stupid assertion

doesn't understand that money velocity has dropped below the normal range, not because the economy is weak, but because the money stock has increased substantially due to Fed actions in response to the economic collapse in 2008

describes Janet Yellen as a "macroeconomic ignoramus"

>>propose theory after theory that makes the world a happy place without having to deal with all that 'free market' awfulness.

Just another worthless load of crap. What are the other "theories" in this list of "theory after theory"?

>>It's Moocher's Paradise. And it will never work in the long run.

What won't work out in the long run is yer dream of a dramatic increase in the price of Precious.

>>fiat money is only worth what people think it is worth. And if people think it is worthless, it IS worthless.

And yer efforts to convince people that the US dollar is "worthless" are laughably pathetic.

>>The only reason fiat currencies have lasted so long is …

they work very well if the full faith and credit of the nation issuing them is defended and preserved. The American people, through their hard work, high productivity, and remarkable innovative skills, will grind these naysayers into dust. What does NOT work effectively is a currency tied to a gold standard, with its inherent restrictions and instability.

>>MMT is what happens when people who do not understand real world macroeconomics...think they do.

Running around yelling that the sky is falling is what gold bugs do.

>>You cannot learn about macroeconomics from a textbook or a professor...you HAVE to learn about it in the real world.

You should try reading some respected academic analyses and stop making a fool of yerself.

>>Because economics is not just about numbers...it's mostly about people and emotions.

And efforts to frighten people into panicking about the inevitable hyperinflation that's always just around the corner will fail miserably.

I'd say the worst thing that can happen with austerity is … something like the GOP SSE Great Depression, which of course led to the rise of Nazism in Germany and a world war that was doomsday for more than fifty million human beings.

I thought WWI was several years before the Great Depression. I must have read the wrong history book. I guess I should have read the liberal history book.

Absentglare · May 2, 2016

Moderate Right said:
I thought WWI was several years before the Great Depression. I must have read the wrong history book. I guess I should have read the liberal history book.

Oh ? In my history books, the Nazis rose to power in WW2.

MMT False Counterpoint #1 - Inflation/Hyperinflation

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