Why does everyone hate mmt?

JohnfrmClevelan said:

If you are truly interested in finding better answers, then you can't dismiss anything out of hand.

Wray is one of the very top MMT academics. And I would explain whatever he said here that you are questioning, but I'm not going to sit through an hour-long lecture just to find the section of interest. If you can point me to the spot, great, I'll watch some of it.

That said, I really doubt he was talking about a centralized economy stepping all over the private sector. My guess is that it's more along the lines of who should have access to limited resources when the (rare) problem arises, a business, or the government? So when we are in a war, is it more important that the government is able to draft soldiers, or should the private sector be able to keep that labor, no matter how unimportant their job?

Think about your position here. If you are on the side of business over government, you are admitting that business is more important than governing our nation as the voters see fit. Business, in effect, would be making the rules (even more than they do already). "You can't have that steel for an aircraft carrier, we need that steel for some very profitable minivans."

But I'm just guessing here. Point me to the spot in the lecture, and I'll watch it.

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That's the trouble with you guys. First, you want others to be open minded to MMT but you refuse to be open minded to the fact that almost all leading economists call MMT bunk. And, if we are open minded about MMT and check it out and then dismiss it for the bunk that it is, then it is because we don't understand it. YOU refuse to be open minded to the fact that, as this thread title so accurately puts it, everyone hates MMT. It never even occurs to you why everyone hates MMT. Must because they don't understand it because if they understood it, surely they would see the light and be converts. YOU dismiss out of hand that MMT is bunk.

Vadinho said:

BTW, I almost finished with Web of Debt, the single greatest book on money and finance I have ever read. Have you read this book? If not, get it.

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You see, Vad, John is the utmost authority on economics and knows more than anyone else (even though he never took even one economics course), including all of the leading expert economists. We need to all bow down to John as the know it all of economics. There is nothing than anyone anywhere can teach him because he is self taught and can learn nothing from no one. You are now beginning to understand why no one takes him seriously.

JohnfrmClevelan said:

No, thanks. There were already errors in the short description on Amazon.

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A book of this scope is bound to have errors that attract people who will nit and pick. The general concepts of it are sound. Money is debt and interest depends upon new debt to be created in order to pay the interest accrued. Unless new money is created, those who charge interest end up with all the money or they force borrowers into debt peonage. This is exactly why most of our income is serviced debt and interest. It was set up that way. The only way to pay more for money then you earn is to have someone borrow the extra dough. It's a cycle that the ancients knew well which is why so many forbid interest.

There is a wonderful example of this deep in the book. It talks about two different examples. One is a group of people stranded on an island that find a chest filled with gold coins. They use those coins, a fixed amount, to begin an economy. Before you know it, one person has all the coins. The other example is the same thing but an accountant is among the group. The accountant uses the tally system to run the economy. A tally system is ancient. It is not run on money but units of work. When you have 20 sheep to exchange, you go to the tally man (think of the lyrics to Dayo) and he gives you 20 tallies. You then use those to buy goods and services without interest. There is no fixed amount of money as in the gold coin scenario. There is no interest, only tallies. If you produce more sheep then the people need, you still get a tally for each sheep but then the tally man or government can take those extra sheep and sell it to other communities. Don't get side tracked with particular errors, the gist of the book is extraordinary and it was written before the 2008 financial crash.

Moderate Right said:

You see, Vad, John is the utmost authority on economics and knows more than anyone else (even though he never took even one economics course), including all of the leading expert economists. We need to all bow down to John as the know it all of economics. There is nothing than anyone anywhere can teach him because he is self taught and can learn nothing from no one. You are now beginning to understand why no one takes him seriously.

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Using the tactic of proof by authority might be a prudent approach with science but not with economics. If you think economics is a science then you do not understand economics. I am not claiming that MMT is right or provable, I am merely claiming that it represents reality. As someone who has followed econ for decades, it sure seems to be that if one wants to find an economist that agrees with you, it can easily be done. If you are open to new ideas, then MMT is one of the more lucid and honest approaches out there today. I say this as a person who has wavered between all the various forms of economic theory for decades. All of them have good points and bad points. But none of them has explained fiat money as well as MMT. As many have said before in this thread, MMT is not a dogmatic theory, it is merely descriptive of our current financial system. In order to understand it, you must rid yourself of ideas steeped in the era of gold backed money systems. There is no limit to the number of subway tokens any subway can issue, it is merely bound by the capacity of the trains, how many people ride them and how crowded they can become if fully loaded. If you have more train capacity then there are people, there is no way you can issue too many tokens. If you issue ten times as many tokens as there is capacity, you have problems. This is why aggregate demand and excess capacity are keys to understanding a macro economy. MMT understands this and addresses it.

Fenton said:

Excess Reserves, Oceans of Cash
Excess Reserves - Oceans of Cash

" The fact that banks are holding excess reserves in response to the risks and interest rates that they face suggests that the reserves are not likely to cause large, unexpected increases in their loan portfolios.

However, it is not clear what banks are likely to do in the future when the perceived conditions change or which conditions are likely to bring about a massive change in their use of excess reserves. Recent history is not much help in determining the answer to this question because no balances this big have been seen in recent times.

Does this mean that the Federal Reserve should consider a major policy change that would remove some of the excess reserves as a safety measure? Such a measure might include raising the reserve requirement, charging interest on excess reserves, and removing liquidity from the system. "


Should We Worry About Excess Reserves?
Should We Worry About Excess Reserves? | Federal Reserve Bank of Minneapolis

" Banks in the United States have the potential to increase liquidity suddenly and significantly—from $12 trillion to $36 trillion in currency and easily accessed deposits—and could thereby cause sudden inflation.

This is possible because the nation’s fractional banking system allows banks to convert excess reserves held at the Federal Reserve into bank loans at about a 10-to-1 ratio. Banks might engage in such conversion if they believe other banks are about to do so, in a manner similar to a bank run that generates a self-fulfilling prophecy.

Policymakers could guard against this inflationary possibility by the Fed selling financial assets it acquired during quantitative easing or by Congress significantly raising reserve requirements. "


Paying Interest on Excess Reserves
Paying interest on excess reserves | FRED Blog
" By altering the incentives for commercial banks to extend loans or hold excess reserves, the Fed is able to use the IOER as an additional monetary policy tool."

"When banks have excess liquidity or reserves, they can choose whether to lend those reserves to other banks (at the federal funds rate) or deposit them at the Fed (and earn the IOER). Banks aren’t willing to lend to each other if the federal funds rate is substantially lower than the IOER, and so the two rates move closely together."

You're doing a great job sounding incoherent Kush

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Parroting a hypothetical (and extremely unlikely) argument as a means of saving face hasn't helped your cause.

We want banks to make more loans. You've added nothing to this discussion.

Moderate Right said:

LOL. Now we've moved from we can charge up the debt as high as we want to: we can pay off our entire 22 trillion dollar debt tomorrow. Let me ask you two questions:

1. What would happen if we printed up 22 trillion dollars tomorrow?

2. What would happen if we printed up 222 trillion dollars tomorrow?

Bottom line, you guys are so arrogant that you think you know more than the 42 top economists in my link. You can debate from now until the cows come home and you can't change the fact that 42 of the top economists think MMT is bunk. The score is 42-0. No matter how good of a debater you think you are that will not change.

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Bottom line, you can't answer his question, because you don't know the first thing about economics.

Find a thread about Trump, where you belong.

Vadinho said:

Using the tactic of proof by authority might be a prudent approach with science but not with economics. If you think economics is a science then you do not understand economics. I am not claiming that MMT is right or provable, I am merely claiming that it represents reality. As someone who has followed econ for decades, it sure seems to be that if one wants to find an economist that agrees with you, it can easily be done. If you are open to new ideas, then MMT is one of the more lucid and honest approaches out there today. I say this as a person who has wavered between all the various forms of economic theory for decades. All of them have good points and bad points. But none of them has explained fiat money as well as MMT. As many have said before in this thread, MMT is not a dogmatic theory, it is merely descriptive of our current financial system. In order to understand it, you must rid yourself of ideas steeped in the era of gold backed money systems. There is no limit to the number of subway tokens any subway can issue, it is merely bound by the capacity of the trains, how many people ride them and how crowded they can become if fully loaded. If you have more train capacity then there are people, there is no way you can issue too many tokens. If you issue ten times as many tokens as there is capacity, you have problems. This is why aggregate demand and excess capacity are keys to understanding a macro economy. MMT understands this and addresses it.

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Funny how you guys refuse to accept the word of 42 top economists who all say MMT is bull.

JohnfrmClevelan said:

Bottom line, you can't answer his question, because you don't know the first thing about economics.

Find a thread about Trump, where you belong.

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Couldn't answer my questions, could you? Bottom line, your total and complete arrogance refuses to be open minded to anything debunking MMT, even if it's from 42 top economists, but then you expect others to have an open mind about MMT. Find a thread about AOC, where you belong.

P.S. I know my questions were hard so I don't expect a self taught hobbyist with no education in economics whatsoever to be able to answer them. According to you, the US would be just fine with a 222 trillion dollar debt.

Moderate Right said:

Couldn't answer my questions, could you? Bottom line, your total and complete arrogance refuses to be open minded to anything debunking MMT, even if it's from 42 top economists, but then you expect others to have an open mind about MMT. Find a thread about AOC, where you belong.

P.S. I know my questions were hard so I don't expect a self taught hobbyist with no education in economics whatsoever to be able to answer them. According to you, the US would be just fine with a 222 trillion dollar debt.

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Your questions are idiotic. And you wouldn't know how to interpret the answers anyway. You have NEVER contributed one speck of useful information to this forum, and you never will.

Fenton said:

QE was unprecedented. The Fed purchased large amounts of Govt bonds to drive up Bond prices and conversely to drive down yields and short term interest rates.

If the FED planned on making QE permanent, then yes, they're essentially monetizing the debt. All interest earned on Fed liabilities is remitted back to the Treasury in perpetuity, which means it cost nothing for the Fed Govt to borrow and spend

The Fed isn't making QE permanent. They're unwinding their balance sheet at a rate of 6 billion dollars in Govt bonds. Those bonds are being returned to the private sector.
They're allowing 4 billion in MBSs to run out each month.

There are multiple examples of the dangers of monetizing a Nation's debt so its hard to believe people are open minded to doing this in the US.

Zimbabwe, Weimer Germany, Hungary and Venezuela for example

MMTs mechanism for heading off inflation is one of the most ridiculous things I've ever heard.

MMTers want to raise taxes on individuals and companies who's purchasing power has already been diminished by foolish and incompetent Govt intervention into the private sector economy.

It's almost like MMTers don't have a firm grasp on how market economies function. Occasio Cortez supports MMT, so I guess they do not.

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Given the persistently low inflation we've had over the past decade, MMT doesn't argue for higher taxes currently. So what exactly are you talking about?

JohnfrmClevelan said:

Your questions are idiotic. And you wouldn't know how to interpret the answers anyway. You have NEVER contributed one speck of useful information to this forum, and you never will.

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You can't answer my questions. That's why you call them idiotic. They are too difficult for you. You have NEVER contributed one speck of useful information to this forum, and you never will. You are so arrogant you think you know more than 42 of the top economists who all say MMT is bunk. It's just a slick sales pitch to get people to think that increasing our national debt to 222 trillion dollars in order to further socialist policies is perfectly fine. A jobs guarantee, one of the focal points of MMT, is Socialism with a capital "S".

Top economists are polled on economic policy espoused by AOC — here's how many say it doesn't work - TheBlaze

Rep. Ocasio-Cortez backed modern monetary theory, no economists agree - Business Insider

"An economic policy espoused by Rep. Alexandria Ocasio-Cortez (D-N.Y.) was found to have exactly zero support from top economists in a recent poll.

Ocasio-Cortez referred to the policy of modern monetary theory (MMT) to explain how she would fund her far-left proposals that would cost tens of trillions of dollars.

But in a poll from the University of Chicago Booth School of Business of 42 top economists, not one supported the basic tenets of the policy."

Moderate Right said:

Funny how you guys refuse to accept the word of 42 top economists who all say MMT is bull.

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They reacted to a poll, phrased in a way that misrepresents MMT.

OrphanSlug said:

They reacted to a poll, phrased in a way that misrepresents MMT.

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Doesn't misrepresent MMT at all. Just because you far lefties say it does, does not mean it does. So, you're saying that 42 of the top economists don't understand MMT? How hilarious!

Appealing to authority (blindly) without even knowing it is weak sauce.

Vadinho said:

Let me ask you a simple question about this debt. Why don't we just pay it off and destroy the bonds when they are exchanged for dollars? If you say inflation, no new money has been created by paying off these bonds, the money that originally purchased them are simply returned. Now you might say that this would destroy the dollar or the petro-dollar as it is really defined internationally. But given our trade deficits where we trade dollars for goods, our suppliers are still holding billions of dollars which they currently park in Tbills. We could simply start another round of tbill auctions and start all over again. Folks, the total debt can be paid off anytime we want, its just a matter of legislation and the Fed.

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That wouldn't end well. After printing enough currency to pay off all our debt, there would be no point in auctioning off a new round of T-bills. No one, including our Global trading partner's like China would purchase them

MMT says the US cannot default on its debt because the US has a printing press ? Technically that's correct, but a de-facto default would be just as bad.

Paying off our creditors with printed money is just that, a de-facto default as our creditors would receive debased dollars that were worth far below the value of their initial investment.

After we royally pissed off our creditors, investor's would immediately start dumping USD under the correct assumption that it's value would continue to fall until the exchange rate between the dollar and other currencies around the world reached exactly zero.

There would be no incentive for Banks or merchant's to continue transactions in USD, importers wouldn't accept dollars anymore and the dollar would lose its status as a reserve currency.

The thing is we wouldn't even have to print currency for this to happen. We would just need to convince everyone else we were seriously considering it.

Even a hint that the US was seriously considering paying off all it's debt with printed currency would cause the value of the dollar to drop like a rock

JohnfrmClevelan said:

Crazy because it's totally untrue. Where do you even dig garbage like that up?

MMT isn't driven by ideology, it's driven by wanting to find correct answers. How long do you think we should stick with mainstream neoclassical theory when they have been wrong so often?

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yet it isn't wrong it is highly consistent in it's behavior. the only time when it gets out of control crazy is when and outside force pushes it in a direction that it isn't supposed to go in
or allow for corrections. This entity is usually the government picking winner and losers and creating bubble markets.

MMTers often end up supporting liberal policies because we understand that it's no more expensive to help people out when they need help than it is to kick them. Today's policy (NAIRU) of keeping people unemployed so that businesses can enjoy lower labor costs is primarily supported by Big Business. That's where the Koch Bros. spend a ton of their money, pushing the idea that changing policies will lead to ruinous inflation. And you suckers have fallen for it, even though it hurts all of us in the bottom 9x%.

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[/QUOTE]

there will always be a segment of people unemployed. either by some medical reason or they simply don't want to work.
sure we could be like cuba who sticks 20 people in a room to say they have a job but there is only work for 5 people.

nothing is hurting you at the bottom 50%. except the lack of skills or motivation to do something more.

Kushinator said:

Appealing to authority (blindly) without even knowing it is weak sauce.

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yet that is all MMTer's do appeal to their own authority.

Moderate Right said:

You see, Vad, John is the utmost authority on economics and knows more than anyone else (even though he never took even one economics course), including all of the leading expert economists. We need to all bow down to John as the know it all of economics. There is nothing than anyone anywhere can teach him because he is self taught and can learn nothing from no one. You are now beginning to understand why no one takes him seriously.

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i don't think i could have said it any better myself.

Moderate Right said:

Funny how you guys refuse to accept the word of 42 top economists who all say MMT is bull.

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Funny how you fail to grasp the essence of MMT.

Fenton said:

That wouldn't end well. After printing enough currency to pay off all our debt, there would be no point in auctioning off a new round of T-bills. No one, including our Global trading partner's like China would purchase them

MMT says the US cannot default on its debt because the US has a printing press ? Technically that's correct, but a de-facto default would be just as bad.

Paying off our creditors with printed money is just that, a de-facto default as our creditors would receive debased dollars that were worth far below the value of their initial investment.

After we royally pissed off our creditors, investor's would immediately start dumping USD under the correct assumption that it's value would continue to fall until the exchange rate between the dollar and other currencies around the world reached exactly zero.

There would be no incentive for Banks or merchant's to continue transactions in USD, importers wouldn't accept dollars anymore and the dollar would lose its status as a reserve currency.

The thing is we wouldn't even have to print currency for this to happen. We would just need to convince everyone else we were seriously considering it.

Even a hint that the US was seriously considering paying off all it's debt with printed currency would cause the value of the dollar to drop like a rock

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So paying off all debtors is wrong? I thought that the deal was simple. I give you a million bucks, you pay me interest. If I decide to pay you early plus interest, you think this is bad? Do you not grasp the fallacy here?

ludin said:

yet that is all MMTer's do appeal to their own authority.

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A baseless claim.

Kushinator said:

A baseless claim.

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cool then well us what authority john as in the matter to talk about MMT like he does?
please list his qualifications that allows him to tell pretty much every site out there that he is right and
they are wrong.

ludin said:

cool then well us what authority john as in the matter to talk about MMT like he does?
please list his qualifications that allows him to tell pretty much every site out there that he is right and
they are wrong.

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You, MR, and Fenton are not speaking on behalf of the people or organizations with respect to this particular discussion. Besides, you guys aren't even attacking the main problem for MMT, which concerns economic growth (i've already addressed it earlier in the thread). Watching you fellas flail aimlessly with partisan motivated google search-fests has been nothing short of a pleasure!

John at least had a fundamental understanding of our monetary system prior to going into this discussion. Fenton has learned quite a bit these past few days. You can too.

Kushinator said:

You, MR, and Fenton are not speaking on behalf of the people or organizations with respect to this particular discussion. Besides, you guys aren't even attacking the main problem for MMT, which concerns economic growth (i've already addressed it earlier in the thread). Watching you fellas flail aimlessly with partisan motivated google search-fests has been nothing short of a pleasure!

John at least had a fundamental understanding of our monetary system prior to going into this discussion. Fenton has learned quite a bit these past few days. You can too.

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avoided the question.
I asked on what authority does john have to declare every source out that says he is wrong as incorrect like he does.
what degree does he have? what submitted works to any type of peer reviewed economic journals does he have?
If he cannot produce any such documents then he is doing what we call an appeal to authority fallacy.


please list them and be specific.

Actually we are.

We have destroy the based logic of MMT time and time again that it is like beating a dead horse.
There is a reason that no country in the world uses MMT.

The ones that have tried ran their currency and their countries into the ground.
So unless you would like to end up like VZ or Zimbabwe you should probably drop the MMT nonsense.

You cannot print unlimited amounts of cash and carry unlimited debt as MMT suggests.

Moderate Right said:

Doesn't misrepresent MMT at all. Just because you far lefties say it does, does not mean it does. So, you're saying that 42 of the top economists don't understand MMT? How hilarious!

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Of course it does, and I illustrated why. It is not my fault you do not grasp modern economics, which is just the study of economic behavior.

The poll you guys constantly refer to has 2 statements to agree or disagree with.

"Countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt" and "Countries that borrow in their own currency can finance as much real government spending as they want by creating money."

Here is the problem, and it speaks to what MMT really says, neither statement addressed the reason for government deficits or spending.

The goals for MMT are very clear. As much as possible help stabilize aggregate demand, promote full employment, and handle economic excesses. MMT principles are based on fiat money systems and the reality that a government that has a monopoly over its own money and *can* print at will presuming economic reason to do so, not that it *should* print at will for no reason. We know that in mixed economic models, such as ours, that fiscal and monetary policy should be about dealing with economic cycle turbulence, excess collectivism causing bubble and pop economics, and destruction of too many in the labor force by unchecked economic extremes be it leaning too much to market economics or planned economics. Strict capitalism and strict socialism are awful ideas, and that illustrates with perfection why most go with a mixed model.

Neither statement they asked economists to agree or disagree with offer what the condition of the economy is, where we are in terms of employment, what the government is spending on or why, or really any context to the statement other than pulling parts of MMT principles devoid of the reasons for them. Neither statement is really wrong but even someone like me who subscribes to MMT would not go along with either one as stated without context.

Let me offer an analogy. "The US is largely prepared to go to war at anytime, so they should not worry about the resources needed to do so." Technically that is true as well because the US spends more on its military than the next 6-8 nations combined (sources vary) so we can go to war anytime, but that does not mean we should go to war at anytime as without context on the why part we cannot agree to the statement as is.

Economists were reacting the same way, as they should, because without context there is no reason to agree with either statement. MMT even says not to agree with those statements as the goals of MMT were intentionally left out (probably for political argument reasons.) I offer the polling was handled for a specific reason, and given how often this subject comes up in terms of right leaning economics vs. left leaning economics (which is also devoid of real economic principles) I am not surprised to see you reference the poll just as most right leaning political outlets are doing.