DTM: gogoratzekoak

2 Ingelesez: “In a fiat monetary system where the national government issues its own currency and floats it on international markets:

• A sovereign government is not revenue-constrained which means that fiscal space cannot be defined in financial terms.

• The capacity of the sovereign government to mobilise resources depends only on the real resources available to the nation.

• A currency-issuing government can always meet the liabilities it issues in its own currency.

• Nations that have ceded their sovereignty by entering currency zones (such as the Eurozone); by dollarising their currencies; by running currency boards; and similar arrangements clearly are not sovereign and face the same constraints that a country suffered during the gold standard era.”

3 Ingelesez: “The only fiscal limits on growth at the moment are those that are voluntarily being imposed by governments trapped in this destructive neo-liberal Groupthink.”

4 Ingelesez: “The fiscal space for any currency-issuing government, is in the first instance, defined by the pool of mass unemployment within any particular nation.

Millions of people remain without jobs as a consequence of the deliberate policy restrictions that politicians have acceded to under pressure from the likes of the morons at the BIS.

There is massive fiscal space available to bring these idle labour resources back into productive use and earning incomes through large-scale public employment initiatives and significantly higher levels of public infrastructure spending.”

5 Ingelesez: “Even in the Eurozone, where the Member States surrendered their fiscal sovereignty, there is still massive fiscal space available if the ECB abandoned its neo-liberal approach and instead funded increased Member State deficits.

In my current book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – I show how that could be done even within the restrictive rules of the current treaties.

The ECB could simply announce that it will buy all public debt issued, the purchasers taking place in the secondary market to work around the so-called ‘no bailout clauses’ and the European Commission could simply agree that the rising deficits were to meet extraordinary circumstances, thus circumventing the mindless Excessive Deficits Mechanism rules and procedures.

Before long, the Eurozone nations would be increasing employment and enjoying higher real GDP growth and observing the individual fiscal deficits of the Member States declining as the increased tax revenue (by the automatic stabilisers) responded to higher employment and levels of economic activity.

The only thing preventing that fortuitous outcome is the Neo-liberal Groupthink that the European policymakers remain trapped within.”

6 Ingelesez: “I have written about the obsession that the Groupthinkers have with monetary policy, which is just a reflection of their obsession with inflation and their dislike for fiscal interventions that might expand the size of government.

For example, recently, I wrote the following blogs – We are being led by imbeciles and The ECB could stand on its head and not have much impact – which bear on the topic.

Despite all the manipulations of conventional and non-conventional monetary policy instruments, the impact on real GDP growth in most countries has been muted.

So it is no surprise that people are beginning to ask what the hell is going on with central banks purchasing massive volumes of financial assets from the non-government sector in return for the instant creation of bank reserves yet real GDP growth appears to be slowing.

Of course, it’s no surprise that the monetary policy changes have been largely ineffective in terms of counter-stabilisation objectives.

Any understanding of the way the monetary system and the banking system within it operate would lead one to make that conclusion in advance of any policy change.

Please read the following blogs – Building bank reserves will not expand credit and Building bank reserves is not inflationary – for further discussion.”

7 Ingelesez: “There is no differentiation between public and private debt. The GFC was a private debt problem and that problem remains. It will be made worse if governments try to reduce their fiscal deficits and squeeze growth, which, in turn, squeezes non-government incomes and the capacity to repay debt.

There is no differentiation between the public debt of sovereign nations and the debt held by Eurozone nations. The latter are highly exposed to credit risk because the debt is in a foreign currency – the euro.”

8 Ingelesez: “There is no recognition that the fiscal austerity has cruelled private sector capital formation (investment), which has, damaged productivity growth.

Further, so-called internal devaluation policies (aka wage attacks etc) have reduced the incentive for firms to invest in labour-saving (higher productivity) technologies.”

9 Ingelesez: “The financial markets are full of lemmings who run to the cliff at the slightest fright. In essence, falling sharemarket prices should have little impact on the real economy and, at any rate, the sovereign govenrment can always minimise any real effects spilling over anyway.

But, with governments poised to inflict further damage via fiscal cutbacks, and everyone seeing the impotence of monetary policy, the conclusion that things are out of control again is easy to make.”