Krugman on MMT

Paul Krugman comments today on Modern Monetary Theory (MMT).  Unfortunately, he gets it wrong.  For example, he says: Right now, deficits don’t matter — a point borne out by all the evidence. But there’s a school of thought — the modern monetary theory people — who say that deficits never matter, as long as you have … Continue reading Krugman on MMT

Rhetoric Is A Powerful Tool To Advance Moneyed Interests

Money is essential to a successful economy.  But it’s money in circulation that’s useful.  Money that’s locked up in storage in vaults and savings doesn’t help.  The early economists understood this well and often used the analogy of money-is-to-economy as blood-is-to-human-body.  Circulating money, money that is used to buy things is as important to the … Continue reading Rhetoric Is A Powerful Tool To Advance Moneyed Interests

The Fed’s New “Twist” – Not Likely To Help

Late Wednesday The Federal Reserve announced a new program to try to stimulate  the economy so that maybe somebody, somewhere could get a new job, or maybe it’s so that critics would shut-up about employment.  It’s always hard to tell what The Fed’s real objectives are.  I don’t have time to explain now why it’s … Continue reading The Fed’s New “Twist” – Not Likely To Help

Government Bonds are Just Like Government Money

Government debt is not like private debt.  Government debt, government bonds, are really just another form of the government-issued fiat money obligations – just like paper money.  There really is little difference between government bonds and that paper money in your pocket – except that the bonds pay interest and are harder to cash at … Continue reading Government Bonds are Just Like Government Money

But What About National Debt-to-GDP Ratio? Not a Problem, Really

In the comments to my post on the extraordinarily weak 2nd qtr 2011 GDP numbers a reader asks for my thoughts about debt-to-GDP ratio and “how can we afford more stimulus”?  Since my response will be a little long and others might be interested, I’ll post it here. Reader AZLeader asks: Here are some other GDP … Continue reading But What About National Debt-to-GDP Ratio? Not a Problem, Really

Debt Ceiling: Kabuki Theater of the Absurd

Tuesday evening the House of Representatives voted on whether to raise the so-called “debt ceiling”.  It was pure charade.  No, it’s worse. It’s kabuki theater of the absurd.  First off, the House Republican leadership knows it’s only for show.  The reality is that Congress will vote to raise the limit later this summer.  They have … Continue reading Debt Ceiling: Kabuki Theater of the Absurd