Warren Mosler (2024): Gobernuaren Defizita = Sektore Pribatuaren Aurrezkia

The Government Deficit = Private Sector Saving

Warren Mosler discussing the relationship between the government budget deficit and the private sector savings. They’re equal. Net financial assets in the non-government sector only increase when the government deficit spends. Central Bank operations (like quantitative easing) only shift assets from one form to another.

Transkripzioa:

Intro

0:01

everybody says you know you know what

0:03

you forgot you forgot about inflation

0:05

you forgot about what can happen if over

0:07

spent so I just want I don’t want

0:08

anybody to say that so I’m doing this

0:10

they’re gonna say it anyway I don’t

0:12

there’s some reporters in this room

0:13

they’re going to say that this but look

0:16

I just my conscience is clear I threw

0:18

the

0:21

slide okay now after the government

0:25

spends they don’t just throw it out the

0:26

window they could then it would be in

0:28

cash but what they normally do is put

0:29

put it in a checking account at the

0:31

Federal Reserve it’s called a reserve

0:33

account because it’s a Federal Reserve

0:35

Bank okay uh oh I I’m doing the second

0:38

one first Reserve accounts or checking

0:40

accounts at the Federal Reserve Bank

0:42

they call them Reserve accounts Federal

0:43

Reserve Bank they give it a fancy name

0:45

then when people say well you reserve

0:47

balances went up they sound professional

0:49

but all they’re just checking accounts

0:52

okay the national debt okay and there’s

0:55

another kind of account at the central

0:57

bank at the Federal Reserve Bank called

0:59

treasury security IES there’s savings

1:01

accounts it’s already been covered I’ll

1:03

just leave it at that you give them

1:05

money you get it back with interest it’s

1:06

called a savings account cash is the

1:09

exact same information as your checking

1:11

account but it’s written on a piece of

1:13

paper so instead of getting your balance

1:14

on a computer screen or bank statement

1:17

you get to carry it around with you it

1:18

is a bank statement the cash is just a

1:21

bank statement say $100 it’s the same

1:22

thing it’s the thing you can use to make

1:24

payments to the government with taxes

1:26

for

1:27

taxes once the government has spent that

1:31

money appears in those one of those

1:34

three

1:36

forms okay so if the government spends

1:39

without taxing just spends that’s called

1:41

deficit spending say on day one the

1:43

government just spends $100 it’s going

1:45

to be one of three places it’s going to

1:47

be cash in

1:48

circulation or in the checking account

1:50

or in your savings account somebody’s

1:52

savings account there’s no other choice

1:54

the dollar has no other existence other

1:57

than those three

1:58

places

2:00

and all of this equals the world’s net

2:02

Savings of dollar Financial

2:04

assets there are $1 13 trillion or so in

2:07

the savings accounts and checking

2:09

accounts and

2:10

cash equal to the

2:13

penny to the cumulative deficit spending

2:15

that’s how much the government has spent

2:17

and stuck into those accounts but hasn’t

2:19

yet taxed and taken out of those

2:21

accounts spending puts the money into

2:23

the accounts taxing takes it out if you

2:25

put it in and don’t take it out it’s a

2:27

deficit it’s our savings it’s held by

2:29

you me China whoever owns treasury

2:34

Securities little diagram to explain it

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here see how it work just to make a

2:40

graphic that I did a long time ago

2:42

appears in ry’s book understanding

2:44

modern

2:45

money uh up at the top you have I’ll do

2:48

it from here so I have the microphone I

2:49

guess uh in the middle non-government

2:52

sectors that’s all of us that’s

2:53

everybody except the

2:55

government okay let’s start at the

2:57

bottom the government imposes a tax we

2:59

have to to pay this tax so we can’t get

3:00

out of the room we’re going to lose our

3:02

house and our car when I say tax just

3:04

just think of a property tax because

3:06

that’s easy if you start thinking of

3:07

income tax and what if you work what if

3:08

you don’t work it it works but you’ll

3:11

lose track of the rest of what I’m

3:13

saying but just trust me it does work

3:16

but think of it as a head tax or

3:17

property tax just to keep it simple um

3:21

so the government levies a tax and now

3:23

we need the money to pay the

3:25

tax okay notice I have taxes going out

3:28

down into the D I don’t circulate them

3:31

back there is no such thing

3:33

okay we ship real goods and services to

3:36

the government the government’s doing

3:37

this because it wants to provision

3:38

itself and the government gives us the

3:40

money we need to pay the tax goods and

3:43

services the government money to pay the

3:45

tax some gets paid in taxes some gets

3:48

saved and where does it

3:50

go it goes to the Tin Shed in

3:53

canra the warehouse over on the right in

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Australia it’s it’s this Tin Shed over

3:59

here we’ve got a big concrete building

4:01

the uh and that and that’s how it’s held

4:03

it’s held in one of those three forms

4:05

cash reserves or treasury Securities all

4:08

that fed operations do is Shuffle around

4:11

the difference between cash reserves and

4:13

treasury Securities when the FED buy

4:16

Securities from the private sector their

4:18

Securities go down and their cash the

4:20

reserves go up when the public wants

4:23

more cash the reserves go down and the

4:25

cash goes up the total is always the

4:27

same it’s always equal to the deficit

4:29

the only place that net Financial assets

4:31

can come from is government deficit

4:33

spending this is all accounting no

4:35

Theory no philosophy ask anybody at the

4:38

CBO and they say yeah it has to add up

4:40

to the penny or we have to stay late and

4:43

find our arithmetic mistake so last year

4:46

the government spent a trillion and a

4:48

half dollars more than a tax that money

4:50

went into the warehouse it’s now held as

4:53

treasury Securities reserves or cash

4:55

otherwise known as savings and sure

4:56

enough last year savings went up by

4:58

exactly that amount to the penny when

5:01

you include all the non-government

5:04

sectors deficit spending adds to our

5:07

savings I think I just said that now

5:09

we’re going to walk through an

5:11

example that’s going to take intense

5:13

concentration here so you

5:15

ready okay we’re going to assume you’re

5:18

the only person in the economy we’re

5:20

going to personalize this and you happen

5:22

to have $100 in your checking

5:24

account and the government wants to

5:26

deficit spend $100 to hire you as a

5:29

consultant

5:30

Washington hires a lot of Consultants I

5:31

figure this is good as good a thing as

5:33

any of what deficit spending is what

5:35

money spent on first thing I do is they

5:38

offer for sale we can start in anywhere

5:39

but I’m going to start with them

5:40

offering a treasury security they offer

5:42

you a $100 worth of Treasury Securities

5:44

and you’d say okay I’ll buy it because

5:46

you buy it at auction you get to choose

5:48

your interest rate and the highest

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bidder gets or the lowest bidder gets it

5:52

highest lowest yield highest price and

5:54

so you say yeah I like that yield on

5:57

that treasury security I’m gonna buy it

5:58

so now you just took your $100 out of

6:00

your checking account goes into your

6:01

savings account called a treasury

6:04

security uh have you lost anything has

6:08

the government taken away your money no

6:11

I’ve never heard anybody say I wish the

6:13

government would pay off these treasury

6:14

Securities so I get my money back I

6:16

don’t think anybody else has EI they are

6:18

money in fact it’s better than money or

6:19

you went to bought it it’s voluntary

6:22

okay so now you still have your $100

6:24

it’s just in a savings account instead

6:25

of a checking account now the government

6:28

quote has the money in their mindset to

6:31

pay you your consulting fee so you go in

6:33

and you give them some

6:35

advice uh and they pay you $100 and they

6:40

put it in your checking account okay you

6:42

now have the new treasury security and

6:44

you got the $100 back in your checking

6:46

account and nothing is crowded

6:49

out it has nothing to do with loans

6:51

deposits banking anything this is just a

6:53

self-contained thing has no effect on

6:55

any other part of the private sector and

6:57

if you remember my previous example the

6:59

government spent more than a tax you

7:01

held it in a warehouse and you held it

7:03

in the form of a savings account you had

7:05

a checking account now you have a

7:06

checking account and a savings account

7:08

government deficits add to savings to

7:11

the

7:12

penny the deficit clock can be renamed

7:15

the savings clock this has already been

7:17

covered same

7:19

thing fiscal sustainability

7:22

review spending is not constrained by

7:26

revenues spending is changing numbers up

7:29

putting money numbers into our checking

7:31

accounts taxing is changing numbers down

7:34

taking numbers out of our checking

7:35

account borrowing is moving numbers from

7:38

our checking account to our savings

7:40

account there is no numerical limit to

7:42

any of this paying interest is changing

7:44

the number up in our savings account

7:47

government can always make any payment

7:49

of dollars it wants to make okay this is

7:53

all we’re talking about it’s a nominal

7:55

system we’re talking about there are no

7:57

nominal constraints the risk is is

7:59

inflation and not uh insolvency or not

8:02

solvency there no there’s no solvency

8:04

risk

Moneta-Teoria Modernoa (ingelesezko MMT, Modern Monetary Theory): zipriztin batzuk

Considering the core component of MMT is full employment… and the Job Guarantee… i think you haven’t paid enough attention to what #MMT is