MeisterEckhart wrote on Mar 13^th, 2024 at 2:46pm:


Well...it is; surely I have to right to describe the way and the context in which I am using the phrase (ie "ex nihilo")

What is your objection to the bank manager presenting a bank cheque for $100k created out of thin air?   

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Ah....yes; actually I am demanding that a sovereign currency-issuing government has the same money creation privileges as that granted to private banks.

Then the difference  between public (government) money cf.  private sector 'bank' money, is the latter is interest-bearing and must be repaid, not so in the case of the  former.

MeisterEckhart wrote on Mar 13^th, 2024 at 3:30pm:


Not the topic.....


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No,  Xi has reiterated common prosperity as the nation's goal, including an acknowledgement  "houses are for living in, not investment vehicles" (after the Evergrande disaster; in contrast Oz is learning nothing from its own housing ponzi - we are heading toward a generation locked out of home ownership). 

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In the same way private banks can ONLY (wisely) issue interest bearing 'bank money' created out of thin air when lending to (hopefully) credit-worthy customers, so the currency-issuing government can ONLY issue money created out of thin air to purchase the resouces sought by the government, when those resources are available.

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Apparently it still hasn't clicked with you: the value is in the real resources, not in the money which is merely a convenient measurement of the value of real resources.

Imagine if humans were instinctively cooperative and loving toward our own species, instead of instinctively competitive and ready to go to war...

In that case, we would all be contributing to the developmnet of the nation's economy according to our different abilties,  and enjoy sharing  the rewards of the resulting economic development - without recource to money at all.

Now you should be able to understand the difference between the 'value' of money (the 'lubricant' that massages self-interest and competition), real resources, and "real verifiable value" which is nothing to do with money, eveything to do with the capacity to support and advance the quality of life. 

MeisterEckhart wrote on Mar 13^th, 2024 at 5:48pm:


Well.. wrong on all counts, but you are edging toward an understanding....

1. The term 'creating money out of thin air' is simply a description of the operation; someone in a bank (or the central bank) types some numbers into a person's bank account.

In the case of the currency-issuing government, it means the government doesn't need to tax or borrow in order to spend money into the economy, just as a private bank doesn't need customers' deposits before the bank can write loans (lend money). Hence: "money created out of thin air.

Note: taxes do the reverse, ie they destroy money (take it out of circulation), a tool the govt. might need if inflation is a problem (see below) .

So Kelton's statement could read:

"The currency-issuing government can fund government spending without taxing or borrowing from the private sector (usually done by selling govt. bonds), provided the resources the government seeks are available for purchase by the government, to avoid inflation."

That means Chalmers who is bleating today about needing to achieve a 'balanced budget' is talking  nonsense; he needs to make sure the teachers and the builders etc the government wants are available - by spending first.   


2. I covered "value" in my previous post.

3. Re "'too much' or 'not enough' is largely indefinable":

What is definable is a continuous  full-employment economy which maximises the nation's productivity, in the absence of inflation.

So MMT envisages a JG (Job Guarantee), with the minimum above poverty wage in the economy; with a  ZIRP (zero interest rate policy). 

All defined.

Rather than using the blunt instrument of raising  interest rates, the government ( having reclaimed it's rightful authority from the so-called 'independent' central bank) can introduce taxes or price controls if inflation appears in the economy (for whatever reason; eg good resource management will avoid demand inflation, while supply problems will require other fixes).

The resource constraint must of course be accounted for at all times, to avoid inflation. 






   

Frank wrote on Mar 14^th, 2024 at 7:46am:

And while the Soviet Union projected the image of full employment, the reality was that it didn't matter if that employment was not necessarily productive.

Frank wrote on Mar 14^th, 2024 at 7:46am:


They were/are entirely command economies.

MMT relates to government spending in mixed economies, via intelligent planning alongside blind (self-interest-driven) 'invisible hand' markets.

thegreatdivide wrote on Mar 14^th, 2024 at 9:13am:

Well, it did collapse as an unintended consequence of glasnost and perestroika, so...

MeisterEckhart wrote on Mar 14^th, 2024 at 9:23am:


As a result of losing an arms race with an economy twice it's size, but having  launched the first satellite and first man into space.

Frank wrote on Mar 14^th, 2024 at 9:27am:


There's no power like self-interest.....

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Better than command economies? Because the latter fail to harness the power of self-interest.

BUT:

"free markets are good servants, but bad masters".

eg does the community need another hospital, or another casino?.....