Zorrari buruzko twitter batzuk: zor publikoa eta pribatua, bonoak, Txina, Errusia, euroa, DTM, libra esterlina eta Britainia Handia

SharonSisterUpstairs@mmccdenierCanada1

@DeficitOwls @Cinnamon305 There’s another crash coming. I predicted the last one. This one will be worse b/c we didn’t allow the correction

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 Oh, I agree with you there.

oooooo

L. Randall Wray: Another Crash Is Coming2

Professor L. Randall Wray expresing the opinion that we are primed for another major economic crisis (as spoken in 2015). The reason is that we made no fundamental changes after 2008, mostly just patched things over and kept going. (They are discussing this in the context of a film Wray was interviewed for called “Boom Bust Boom.”)

See the whole video here: https://www.youtube.com/watch?v=KnjE4.

Oooooo

SharonSisterUpstairs@mmccdenier

@DeficitOwls @Cinnamon305 We can’t continue pushing the debt thru the roof

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 The problem is private debt, not public debt. The private debt is crushing firms + households.

SharonSisterUpstairs@mmccdenier

@DeficitOwls @Cinnamon305 You’re right Cnds owe $1.67 per $1 of income. But how can you think the American’s massive growing debt is good?

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 Private debt is bad. Public debt (from the currency issuer) is neutral or good.

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 The currency issuer can NEVER be unable to meet its obligations. Its bonds are functionally identitcal to

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 savings accounts. When you buy a bond from the currency issuer, you’re not “loaning it money,” you’re putting your

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 money in a savings account. It doesn’t need its own currency back from you in order to spend.

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 Ask yourself why the gov sells bonds at all. It doesn’t need to.

SharonSisterUpstairs@mmccdenier Canada

@DeficitOwls @Cinnamon305 my question was: do you think massive gov debt is good?

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 I think the debt is irrelevant for the currency issuer. Big, small, doesn’t matter much

SharonSisterUpstairs@mmccdenierCanada

@DeficitOwls @Cinnamon305 No, that’s crazy. So if the US’s debt goes to 100 trillion, you’re ok with that

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 Yes. Absolutely. We have a floating exch rate, and only have debt in the currency we issue. That’s 100% sustainable

SharonSisterUpstairs@mmccdenierCanada

@DeficitOwls @Cinnamon305 well I hate to tell you this but china and russia have been stock piling gold b/c they think you’re wrong

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 I know that. And, that’s nice for them, but it just shows they don’t understand how modern money works.

SharonSisterUpstairs@mmccdenierCanada

@DeficitOwls @Cinnamon305 Peter Schiff, Mike maloney they don;t get it either?

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 No, neither of them. What they say applies to fixed exchange rates. The US hasn’t had that since 1971!

SharonSisterUpstairs@mmccdenierCanada

@DeficitOwls @Cinnamon305 Whay your take on what’s going on in Europe with debt crises

Deficit Owls@DeficitOwls

@mmccdenier @Cinnamon305 The Euro was doomed to fail from the start. MMTers were saying that from the beginning.

SharonSisterUpstairs@mmccdenier

@DeficitOwls @Cinnamon305 I thought so and I think the EU is a joke. The brits were smart to keep the pound

2016 aza. 17


Iruzkinak (2)

  • joseba

    You Can’t Have A Debt Crisis If You Issue The Currency

    https://www.youtube.com/watch?v=70xIM45kFK8

    Professor L. Randall Wray explaining why government debt is not a problem for a government that issues its own floating-exchange rate currency. Because the government issues the currency, it is always capable of making its payments on time, no matter how large they are. It never has to default.

    Furthermore, because it is the monopoly issuer of the currency, it chooses the interest rate it pays. If it wants to raise the interest rate, it can borrow more money (sell more bonds) to raise the rate. If it wants to lower the rate, it can borrow less money, or even lend money, in order to lower the interest rate. (If it did nothing, and just deficit spends money into existence without selling bonds, then this would drive interest rates to zero, because the private sector would have more cash then it wanted and no way to get rid of it without the government taxing or borrowing it back.)

    What’s more, paying off the debt is not likely to be inflationary, even if it is “printing money.” This is because when the government buys back a bond, it has not actually given any income to anybody or made anybody richer. It just changes the form of their savings: their portfolio had bonds, now it has cash instead, but the same dollar amount. It’s like swapping red dollars for blue dollars. It’s not likely to cause anybody to go out and spend any money they weren’t already spending, and therefore it can’t lead to rising prices.

    Now, the story is a little different if you have a fixed exchange rate. In order to fix the exchange rate, a government buys and sells foreign currency in order to move the market price. This means they must have the foreign currency, and so much operate their economy in such a way that the foreign currency flows in, otherwise they won’t be able to maintain the peg. So, anything the government can do to reduce the amount of excess cash in circulation will reduce the amount of individuals trying to buy the foreign currency from the government, which means the government will be less likely to run out. So the government’s treasury MUST offer whatever interest rate is necessary for the private sector to buy all of the government’s bonds, and hold them. Not so on a floating currency: the government can sell the bonds to the central bank, or just stop issuing bonds and just spend the money into existence directly.

    But even on a fixed exchange rate, the government always has the ABILITY to pay any amount of debt. It just might not want to because of the adverse effects on its ability to maintain the fixed exchange rate.

    Watch the whole video here: https://www.youtube.com/watch?v=0zEbo

  • joseba

    Taxes Do Not Fund Social Security, Investment Does (very slow, with Spanish translation)

    https://www.youtube.com/watch?

    v=QA7DF17fquE&list=PLZJAgo9FgHWajc5BdOP8e75eddFmWhtzh&index=23&utm_content=buffer27f6c&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

    Professor L. Randall Wray discussing the distribution of resources involved with Social Security. Although individuals can save some of their income in order to have money later, the economy as a whole cannot do this. Because the total income over the whole economy is equal to the total spending, if we try to “save” by spending less, this only reduces income, and doesn’t actually result in savings. Money is not a finite, scarce resource in the same way that clothes and houses are. Any amount of money necessary can be created and given to people if that’s necessary to fulfill a financial promise. What’s less clear is how those dollars will exchange for real goods and services. If we have promised many dollars to an aging population, but have not also invested in the factories, training, and increases to productive capacity that’s necessary to make the stuff that those people are going to buy, then there will be shortages, which will only lead to rising prices (inflation).

    So, the way to prepare for an aging generation is NOT to raise taxes now. It is actually to spend MORE to build up our productive capacity so that we can supply the goods and services necessary to meet the needs of the elderly.

    Another way to think about it is like this: if we have an aging population, then we have more people who are consuming without producing. This means that the remaining workers will have to produce MORE in order to produce both for themselves and for the additional retirees. So the necessary step to prepare for that is to bolster up those workers, make sure they have the skills and technology to be as productive as they can in order to meet the increased demand. There is no financial constraint, the federal government can always make any and all payments on-time, since the US government is the issuer of the US dollar, and it can’t run out.

    Watch the whole video here: https://www.youtube.com/watch?v=YxGGR

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