MMT ( Modern Monetary Theory)

MrWonka · Jun 18, 2018

jaeger19 said:
Now me.. I am not that naïve. I realize that the banks and mortgage companies and a whole host of people in the government knew that this was happening and was going to happen.

So you believe the intentionally lost billions of dollars and destroyed the economy for millions of people based entirely on the hope that the government might give them a billion dollar loan that they would likely have to pay back? That's not naive that's delusional.

jaeger19 said:
Its a heck of a lot more effective than REWARDING people for bad behavior.

you still don't seem to grasp the difference between rewarding a mistake, and shielding someone from the consequences of that mistake.

When Superman catches you he is not rewarding you for jumping off a building.

jaeger19 said:
what do you think would happen if you murdered someone and instead of going to prison.. we gave murderers 200,000 dol

'We're not talking about giving the murderers $200,000 we're talking about giving them less jail time. You'd be surprised to find that if we gave murders less jail time it will have little or no impact on how much they want to kill in the future. Obviously jail time would keep them off the streets so they can't murder, but it won't change how much they want to murder.

jaeger19 said:
Nope.. it would encourage millions of people to take out bigger loans for schools, drive the price of schools even higher, in anticipation of the next bailout.

Really? That's weird because people are still taking out huge loans for schools despite not getting a bailout so it doesn't seem to have mattered.

jaeger19 said:
Hey.. why not... why would you want to punish all those future people by not forgiving their loans?

Think about it.

Well, actually we should re-structure the student loan program to make it much easier for people to pay them down, but it's not going to change how many people go to college or even where they go.

Sorry pal, but you are operating under a fundamentally flawed belief. Increased punishments don't prevent bad behavior because people always expect to get away with whatever they're doing anyway.

jaeger19 · Jun 18, 2018

MrWonka said:
No, it doesn't actually. And that was the problem with TARP. All those banks were supposed to take the money we gave them and start loaning it out again, but they were all once bitten twice shy. Regardless of the fact that we bailed them out, they were leery about starting up those practices right away
.

Pooh. The problem was that the banks didn;t have a secondary market to sell these loans at the pace they were before. The housing market had already crashed so it was riskier to loan money on refinancing homes, and quite frankly.. it was a much better deal for the banks to invest that money... or buy up other smaller banks and become larger. In fact.. by buying up more little banks.. they put themselves in a position to be even more "too big to fail".

You have your carts and horses mixed up there. They smoke because they're poor they're not poor because they smoke

Irrelevant. this is not a judgement.. its just a fact. If you smoke.. it costs a lot of money.. and smoking is a choice. Its hard to argue that you don't have money to pay a 120 dollar car repair bill.. when you are spending 180 a month on cigarettes. And another 120 on alcohol.
Oh I have heard it.

Furthermore, while there is some evidence to conclude that poorer people tend to do drugs a bit more than the middle class, it's only about a 1% increase. Which is statistically insignificant. You could argue that's based more on the poorer person's willingness to truthfully answer the survey

Again.. its not a judgment of poor versus middle class. Its simply math that taking drugs, cigarettes and booze all are choices that people make.. and they have a cost. and if you are poor.. those costs affect you a lot more than if you are wealthier.

As I have repeatedly said, if you would like to join me in calling for regulations restricting the number of debt people can obtain at certain interest rates I'm all for that

And I am against that. In all likelihood, it would needlessly restrict people who were making good decisions.. because of some government regulation. It would seem much better.. for lenders and borrowers to decide amongst themselves, what they can afford.. and for both to suffer the consequences if they are wrong. Rather than needlessly restricting other people and being their nanny.

You keep blaming the poor for bad decisions, but it is predatory lenders that are the bulk of the problem here.

Well first.. its about "blaming the poor for bad decisions"... lots of people make bad decisions.. including the wealthy and the middle class. However, at the end of the day.. no one is forcing people to take out loans that they cannot afford. No bank or mortgage lender was putting a gun to these folks heads and saying.. "take this loan or else". The bulk of the problem was NOT predatory loans.. but greedy people wanting more than they could afford.. being given a loan by greedy people who were willing to bend, and break the rules to get them qualified for that money and then sell that loan to unsuspecting investors.

MrWonka · Jun 18, 2018

jaeger19 said:
The housing market had already crashed so it was riskier to loan money on refinancing homes, and quite frankly.. it was a much better deal for the banks to invest that money...

That isn't the point. The point is that they didn't go back to doing the same thing they did before that got them in trouble. They learned their lesson and took a new approach regardless of whether or not they got bailed out. Even though their bad behavior didn't hurt them as bad as it could have, they still changed their thinking going forward to try and avoid another repeat of that situation. They learned a lesson without having to go completely bankrupt to do it. The bailout was not a reward, it was just a mitigation of punishment.

jaeger19 said:
It's hard to argue that you don't have money to pay a 120 dollar car repair bill.. when you are spending 180 a month on cigarettes. And another 120 on alcohol.

What world do you live in where a car repair costs $120? I just spent $350 on a repair, and I actually did the repair myself. The garage wanted to charge me a grand. Cigarettes aren't good, but they are not the reason why someone is struggling.

jaeger19 said:
And I am against that. In all likelihood, it would needlessly restrict people who were making good decisions.. because of some government regulation.

Then you're delusional. You can't go around claiming all these idiots are poor and having all these problems because they're racking up too much debt, and then not do anything to prevent it from happening.

jaeger19 said:
It would seem much better.. for lenders and borrowers to decide amongst themselves, what they can afford...

Delusional free-market libertarian nuttery that ignores the reality of the situation. These banks, credit card companies, car dealerships... They all have professional salespeople on their side who specialize in convincing people they can and should borrow money from them. We can't all be financial gurus who know every trick in the book. The pure and simple fact that Trump is president proves that half the country is made up of morons who can be easily sold on an obvious lie. But just like Trump, we're all paying for the fact that half the country is dumb as ****.hese mistakes

Interest rates are not all that different than rates of speed. If you got too many people on the road that are driving too fast you're going to have some serious accident. If we all know a financial decision is bad or insanely risky just block it altogether.

jaeger19 said:
and for both to suffer the consequences if they are wrong. Rather than needlessly restricting other people and being their nanny.

The 2007 collapse proves it isn't just them who suffer when they're wrong. You can't sit there and bitch about these so-called stupid decisions, and then not do more to keep people from making them.

You need to wake up and join us all in reality. The Free Market does not work the way you think it does. Not even close.

jaeger19 said:
However, at the end of the day.. no one is forcing people to take out loans that they cannot afford.

These people didn't know they couldn't afford them until it was too late. That's why your idiotic plan doesn't ever work. When people make bad decisions they do so under the assumption it's going to work out fine, and they're going to get away with it. So it doesn't matter how devastating you make the punishment after the fact, it's not going to change anything.

That's why the death penalty is so ****ing stupid. People who commit murder do so under the assumption they're not going to get caught. So it doesn't matter if you give them life in prison or the chair. It's not going to change a murderers mind because they're planning on getting away with it.

It's the same reason why marijuana is illegal really hasn't led to a reduction in people smoking pot. The war on drugs has been a complete failure because everyone who smokes plans on getting away with it. You can increase the fines and the prison sentences all you want to, it doesn't phase the users.

jaeger19 said:
No bank or mortgage lender was putting a gun to these folks heads and saying.. "take this loan or else".

Just because you don't have a gun to your head doesn't mean there aren't a lot of other tactics that can be used to make you something. People like you need to understand that there's a lot of other ways to restrict your freedom that do not include government force.

jaeger19 said:
but greedy people wanting more than they could afford..

Nope. The greed is all on the side of the predatory loan shark. The borrowers are almost all innocent people who made an easy mistake because they were convinced that it wasn't going to be a mistake.

jaeger19 · Jun 18, 2018

If there is some kind of economic disaster that ravages our economy and threatens millions of people's jobs then maybe, but nobody can predict that, and nobody can know what that might look like so the notion that someone is doing something reckless is ludicrous. I suppose you think that if Superman catches someone falling off a tall building that will make them more likely to jump again under the assumption superman will be there.

Depression and recessions caused by booms and overconfidence leading to busts is not a "new" phenomena.

Well if superman made it a habit to catch everyone who jumped off a building.. then yes.. I think people would be more likely to take such a risk. Particularly if they were rewarded for jumping off that building.

Let me ask you... If superman caught 98% of people dropping off a building. And you figured you could make 1 million dollars jumping off that building. Would you be willing to do it?

Would you be more or less willing to jump if 99% of people dropping off the building died.. and there was no reward at all for jumping?

Saftey nets don't make people more likely to fall, they make them more likely to climb.

They make you more willing to take risks that you wouldn;t normally.. and that makes you more likely to fall.

So you're arguing that if you offered to pay off people's student loan debt or credit card debt those people in debt would reject the help?

No.. how the heck can you get that from what I said? No.. it means that those people would 1. More likely to go out and do it again, and perhaps get into more debt expecting another bailout.. and 2. Other people that were leary of taking out those loans.. would see that it worked out well for the people that got bailed out.. so it would encourage them to go out and do it themselves.. making the situation worse on the next go around.

Again...if superman catches someone from falling off a building is he rewarding them or preventing them from feeling the full consequences of their actions?

Well.. first.. if when those people jump.. and are saved by superman.. it means that they home is paid off and they get to keep those fourwheelers and jet skis that they bought? Well then they are being rewarded for jumping.

Again.. if Superman catches someone from falling off a building he isn't the one who was punishing them. He just has the ability to save them, and that's not a reward it's saving them from punishment. two different things.

.

See above.

Oh and now add that when Superman saves those people.. they get their house paid for, and they get those 4 wheelers... BUT superman then goes and charges all the other people who did not jump.. a tax to pay those jumpers.. and now those folks that did not jump.. aren;t able to say afford college for their kids or homes, or pay that car bill.

Nope, you just aren't understanding the argument.

Oh I understand your posts just fine. You are trying to find nuanced ways to support your position. NOW you are asking us to consider that there is no reward.. when you can't make your house payment.. and then someone starts making your payments for you.. and you end up with a house for free.

jaeger19 · Jun 18, 2018

MrWonka said:
So you believe the intentionally lost billions of dollars and destroyed the economy for millions of people based entirely on the hope that the government might give them a billion dollar loan that they would likely have to pay back? That's not naive that's delusional.
y.

Actually I believe that they intentionally made billions upon billions of dollars (which they did).. and ran with it as much as they could.. in part because they knew that the end result would not be that bad for them.. because there would be some form of bailout. That's not delusional sir.. that's WHAT HAPPENED. How many of these executives went to jail for all these "predatory loans"? Not to dang many. How many of these executives pocketed millions.. and when it went bottoms up.. it wasn;t their bank accounts that took a hit.

you still don't seem to grasp the difference between rewarding a mistake, and shielding someone from the consequences of that mistake.

Yeah.. if I buy a house.. and I can't afford it.. and you give me the money to pay off that debt.. then guess what? I just got a house for free.. or partially for free.. that's a reward.

'We're not talking about giving the murderers $200,000 we're talking about giving them less jail time.

We are if you want to make your argument analogous to paying off someones 200,000 loan on a home. They get to keep the home!.

Really? That's weird because people are still taking out huge loans for schools despite not getting a bailout so it doesn't seem to have mattered.

not weird at all. Yep.. people have to take out loans.. large loans for school. Why? In part the cost of school has gone up as the availability of money for school has gone up (increased artificial demand). IF, the availability of money remains the same.. and the consequences of borrowing that money are perceived to go down ( because of prior bailouts).. the willingness of people to borrow will INCREASE.

Well, actually we should re-structure the student loan program to make it much easier for people to pay them down, but it's not going to change how many people go to college or even where they go

That's just a shell game. instead of making it easier for loans.. we should decrease the amount of loans and their availability and instead turn that money toward public universities and colleges and public trade schools.. thus reducing the price of school. Which will also drag down the cost of private colleges as well. The goal is cheaper education... not a better deal for banks that administer these loans.

Increased punishments don't prevent bad behavior because people always expect to get away with whatever they're doing anyway

Yeah...sir you keep talking out both side of your mouth. First you said it wasn;t punishment.. and then you now call it increased punishment. sorry.. but suffering the natural consequences does change people;s behavior.. and it also serves as a deterrent for others that might be willing to do the same risky behavior.

jaeger19 · Jun 18, 2018

MrWonka said:
That isn't the point. The point is that they didn't go back to doing the same thing they did before that got them in trouble. They learned their lesson and took a new approach regardless of whether or not they got bailed out. .

And that's wrong. The reason they did not go back doing the same thing is because the immediate conditions had changed. they did not have the entities willing to buy these loans up. they did not have the increasing home markets to allow refinancing etc. They didn't "learn their lesson".. they got away with it.. and when the conditions are right for them to go back to the same behavior.. they will again.. and I suspect that in another decade or so.. we will end up with another mortgage crisis.

What world do you live in where a car repair costs $120? I just spent $350 on a repair, and I actually did the repair myself. The garage wanted to charge me a grand. Cigarettes aren't good, but they are not the reason why someone is struggling.

Easy.. so lets say you don't smoke and you saved that 120 a month.. how much is that a year?.. over 1400. At 80 bucks a month its 960 a year saved. How many car repairs at 350?
Yes.. cigarettes are a good example of choices people make that increases their money troubles.

Then you're delusional. You can't go around claiming all these idiots are poor and having all these problems because they're racking up too much debt, and then not do anything to prevent it from happening.

why am I delusion again? You want to put forth a government regulation that might stop some people from getting loans that they shouldn;t get.. BUT it would also probably prevent others from getting loans that they SHOULD get. It makes much more sense to let a few people suffer the consequences of their actions.. rather than make EVERYONE suffer because of the actions of a few.

Delusional free-market libertarian nuttery that ignores the reality of the situation. These banks, credit card companies, car dealerships... They all have professional salespeople on their side who specialize in convincing people they can and should borrow money from them. We can't all be financial gurus who know every trick in the book.

And when it happens and they default.. the bank, credit card company take a hit.. UNLESS they get bailed out. The same with the people that take these loans.. they get a hit on their credit.

The pure and simple fact that Trump is president proves that half the country is made up of morons who can be easily sold on an obvious lie. But just like Trump, we're all paying for the fact that half the country is dumb as ****.hese mistakes

Interesting that you bring this up. SO.. if we followed your premise regarding regulating what people can borrow.. then if half the country are idiots.. then according to you.. we should institute restrictions for voting. A reading and writing test perhaps? Think about it.

The 2007 collapse proves it isn't just them who suffer when they're wrong. You can't sit there and bitch about these so-called stupid decisions, and then not do more to keep people from making them.

Well one of those things is to NOT bail these people out when things go tits up. Neither the banks that issue the loan nor the people who take them out. Secondly.. would be going back to bank regulations like we had prior to Gramm Leachy deregulation.. and more oversight of conflicts of interest between banks, investment arms, and insurance all under the wing of one bank. that was an issue right there. Not to mention better regulation of the GSE's. like Fannie and Freddie. The whole point is that if there is less of a way for lenders to hide the poor quality of their loans to the people that buy them.. there is less chance of the system taking on too much risk and causing a crash.

These people didn't know they couldn't afford them until it was too late. .

Sure they did... many of these folks knowingly gave false information to their banks.. claiming that they had "self employment income".. in order to boost their income to debt ratio. Then they planned on refinancing into a more conventional loan, before the balloon payments, increase in interest, or they had to pay principle (the three ways people got into homes they could not afford).

Of course.. the explosion of this, raised home prices for everyone else NOT doing this as well.

JohnfrmClevelan · Jun 18, 2018

To bring this discussion all the way back to the subject of the thread, isn't it interesting that the government is able to pay off private sector debt in the first place? It nicely illustrates the difference between government-created money and bank-created credit. Governments can, but do not, use private sector assets (and debt) to fund their operations.

Carry on.

jaeger19 · Jun 18, 2018

So it doesn't matter how devastating you make the punishment after the fact, it's not going to change anything.

And for some people you are right. Of course.. when other people see what happens.. then they are more inclined not to do the same behavior.

That's why the death penalty is so ****ing stupid. People who commit murder do so under the assumption they're not going to get caught. So it doesn't matter if you give them life in prison or the chair

In the situation of murder? its moot anyway since either way they cannot go out and commit another crime.

Tell me.. What if we said.. look you murder someone and we feel sorry for you... so we will give you 100,000 dollars... do you think murders would increase?

Well.. what if someone takes out a loan.. can't pay it.. and we say.. "we feel sorry for you.. so here is 100,000 dollars to pay off your loan and keep your house"? Do you think the number of loans would increase?

Just because you don't have a gun to your head doesn't mean there aren't a lot of other tactics that can be used to make you something

Well.. "make" you do something..not a lot can be done unless the threat of injury to you or others or loss of total income.

People like you need to understand that there's a lot of other ways to restrict your freedom that do not include government force.

I do.. one of those is the consequences of a free market..while you are calling for the use of government force to regulate how much people can borrow.

Nope. The greed is all on the side of the predatory loan shark. The borrowers are almost all innocent people who made an easy mistake because they were convinced that it wasn't going to be a mistake.

Bull its greed. Heck.. my CPA was getting requests from people daily to get a statement from him that "MR.. x has self employment income"... because with such a letter, banks and mortgage companies were accepting people writing in any amounts they wanted to boost their income to debt ratio's. Sorry.. but the borrowers hold most of the responsibility here.

jaeger19 · Jun 18, 2018

JohnfrmClevelan said:
To bring this discussion all the way back to the subject of the thread, isn't it interesting that the government is able to pay off private sector debt in the first place? It nicely illustrates the difference between government-created money and bank-created credit. Governments can, but do not, use private sector assets (and debt) to fund their operations.

Carry on.

not really. I mean isn't it interesting that all these people were able to get these loans in the first place? Wait.. then the economy crashed.

Big difference in what one CAN do.. and what one SHOULD do.

Moderate Right · Jun 19, 2018

JohnfrmClevelan said:
Did the amount that you earn rise as well? If so, who cares about the number of dollars? The question that matters is, does your hour of labor buy as much as it used to?

As for real estate, how many people were living in San Diego in 1965? And how many are living there now, in what is essentially the same amount of space?

Why don't you explain to us how money is created, then? I'm betting that the MMT story is far more accurate.

My response to the rest of your post will hinge largely upon your answer.

There are many more people in the world these days. It's called population growth. You're betting the MMT story is far more accurate? That's the best you've got, you're betting because you don't really know? At least you called it a story so we're making progress with you on that. I see you are still being arrogant in thinking that you know more than everyone else. I'm going to be waiting on pins and needles for your response - not. After all, you admitted that MMT is a story and the best you can do is bet on it.

JohnfrmClevelan · Jun 19, 2018

Moderate Right said:
There are many more people in the world these days. It's called population growth. You're betting the MMT story is far more accurate? That's the best you've got, you're betting because you don't really know? At least you called it a story so we're making progress with you on that. I see you are still being arrogant in thinking that you know more than everyone else. I'm going to be waiting on pins and needles for your response - not. After all, you admitted that MMT is a story and the best you can do is bet on it.

I study the subject. You just sit here and call actual debate participants partisan. Once again, you add nothing to the debate. Go away, and stay away.

Moderate Right · Jun 20, 2018

JohnfrmClevelan said:
I study the subject. You just sit here and call actual debate participants partisan. Once again, you add nothing to the debate. Go away, and stay away.

You study your liberal ass. You study everything that fits into your preconceived prejudices and dismiss anything and everything outside of those preconceived prejudices. You admit you don't even have one hour of formal education on the subject and yet you arrogantly try to convince others that you are an expert economist who has all the answers. Hint: there isn't a real economist on the planet who knows all the answers. You admit that MMT is a "story" and you admit that you are "betting" on it. I just went to the horse race track on Father's Day. It was filled with people betting on losers. Even your subliminal mind knows that the best way to describe MMT is that you are betting on it. That's the best you've got. You're just betting on it because you like the name of that horse more than any other horse in the race. It never even occurs to you that not one country on the planet uses MMT as it's philosophy and that there is actually a reason for that. I'm not going away. I am here to expose both you and MMT for the frauds that you are.

JohnfrmClevelan · Jun 20, 2018

Moderate Right said:
I just went to the horse race track on Father's Day. It was filled with people betting on losers.

You went to the track on Father's Day? How sad. Did you sit in the bar and drink alone, too?

I spent Father's Day with my children and family.

Moderate Right · Jun 20, 2018

JohnfrmClevelan said:
You went to the track on Father's Day? How sad. Did you sit in the bar and drink alone, too?

I spent Father's Day with my children and family.

LOL. Actually, I went to the track with my children and family. It was their Father's Day present to me. And, we won. We bet on the winners. None of them had the name MMT though. That's the loser you are betting on.