Defizit mitoak (2008ko eskutitza)

Warren B. Mosler‏ @wbmosler 1

My 2008 letter to the FT that’s still relevant:

Deficit myths are delaying obvious solutions to the current crisis

2017 api. 29

(i) Mosler-en eskutitza FTra2

(ii) Wolf-en jarrera defizit fiskalak direla eta3

(iii) Mosler-ek dioena: defizit fiskalak mugarik gabe erabil daitezke4

(iv) Kausalitatea: maileguek gordailuak ‘sortzen dituzte’. Barneko zorrek atzerritar aurrezkiak funts gisa hornitzen dituzte5

(v) Atzerritar aurrezkiek ez zuten ‘hornitzen’ funts gisa subprime-ko hedapena6

(Subprime: a loan made to a borrower with a poor credit rating)

(vi) Esportazio netoak, dolarreko aktibo finantzarioak eta Mr Wolf7

(vii) Mosler eta Mr Wolf esportazioz eta politika fiskalez8

(viii) Mosler eta krisi finantzarioaren irtenbidea: krisiaren aurka, politika fiskala9

(ix) Politikariek eta defizit mitoak10

Warren Mosler,
Senior Associate Fellow,
Cambridge Centre for Economic and Public Policy,
University of Cambridge, UK


Defizitak askatuko zaitu

2 Ingelesez: “October 16, 2008

Deficit myths are delaying obvious solutions to the current crisis

From Mr Warren Mosler.

Sir, Martin Wolf (“Asia’s revenge”, October 9) offers an interesting comparison of the current global financial crisis with previous emerging market difficulties. I would, however, like to suggest some clarifications.”

3 Ingelesez: “Mr Wolf correctly identifies a critical difference between the current crisis and the typical emerging market turmoil, namely operating in one’s own currency rather than borrowing in an external currency. As he states, this allows the US to “slash interest rates and increase fiscal deficits”. However, he then states: “Yet the huge fiscal boosts … are only temporary solutions.”

4 Ingelesez: “From an operational perspective this is not so. Fiscal deficits in one’s currency, large enough to support domestic demand (and thereby the banking system), can be sustained indefinitely.

5 Ingelesez: “Furthermore, and in light of Mr Wolf’s correct observation that the US financial issues involve only US dollars, the causation is from US domestic credit expansion to foreign savings (loans “create” deposits). Domestic debt is what funds foreign savings (net US dollar financial assets), and not vice versa. In fact, it was an annual $700bn plus of US credit expansion that funded net US imports and foreign saving of the same amount.

6 Ingelesez: “Foreign savings were not “funding” the subprime expansion. Like all other loans, subprime loans created their own liabilities. “Loanable funds” theory applies only to convertible currencies and external currency finance. Therefore, the notion of a “savings glut” is inapplicable as a point of logic.”

7 Ingelesez: “Any nation that nets exports and accumulates US dollar financial assets presumably does so voluntarily. While what Mr Wolf calls the “financial balances” are true by identity, the art is in identifying causation. Mr Wolf urges that savings surpluses be “recycled” and rightly supports local currency “finance” in the “poor” countries to facilitate current account deficits. However, his statement that it is essential in any case for countries in a position to do so to expand domestic demand vigorously”, implies that there are countries not in a position to do so. Again, operationally, this is not the case. And, while his heart may be in the right place: “It is, above all, neither desirable nor sustainable for global macroeconomic balance to be achieved by recycling huge savings surpluses into the excess consumption of the world’s richest consumers“, the operational reality is that consumption by the world’s richest consumers is not only sustainable but perhaps inevitable as well.”

8 Ingelesez: “I do, however, enthusiastically applaud Mr Wolf for asserting that “exports are a real cost and imports a real benefit” as the basis of his analysis. The rest of the media continuously gets that part wrong. I also applaud Mr Wolf for recognising the role of fiscal policy, and...”

9 Ingelesez: “… I would like to further add that there is no financial crisis however large that cannot be overcome by an appropriately large fiscal response, which can be sustained as long as politically desired to support output and employment. (The lone exception is the eurozone, because of its current institutional structure.)

10 Ingelesez: “Unfortunately, policymakers are beset by “deficit myths” that are delaying obvious solutions to the current difficulties, such as an immediate “payroll tax holiday” in the US.”

Erantzun bat “Defizit mitoak (2008ko eskutitza)” bidalketan

  1. Nork: Warren Mosler
    Bidaltze-data: asteartea, 2017(e)ko maiatzaren 2a 12:48
    Nori: .
    Gaia: Re: Your 2008 letter
    thanks very much!!!!!!!!!!

    On Tue, May 2, 2017 at 3:34 AM, . wrote:
    Hi Warren,

    Wonderful letter: Defizit mitoak (2008ko eskutitza)Best.


    Warren Mosler
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    “The Conservative belief that there is some law of nature which prevents men from being employed, that it is ‘rash’ to employ men, and that it is financially ‘sound’ to maintain a tenth of the population in idleness for an indefinite period, is crazily improbable – the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years. The objections which are raised are mostly not the objections of experience or of practical men. They are based on highly abstract theories – venerable, academic inventions, half misunderstood by those who are applying them today, and based on assumptions which are contrary to the facts… Our main task, therefore, will be to confirm the reader’s instinct that what seems sensible is sensible, and what seems nonsense is nonsense.” – J.M. Keynes in a pamphlet to support Lloyd George in the 1929 election.

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