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The Fight for the NHS/MMT economics

ks.234 said:
*In some ways especially the SNP. Sturgeon is unable to embrace MMT for electoral reasons, but if she doesn’t, if Scotland achieves political independence without it’s own Scottish Reserve Bank, it will not have economic independence. If it uses the English Pound or the Euro, it could find itself paying in much the same way as Greece.
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Agreed. As some may have noticed I’m somewhat pro-EU, but I am so as I believe in removing barriers, allowing freedom of movement, human/civil rights, PR, political accountability etc. All of which are far greater in the EU than in Little England. The € currency has however never worked fluidly across the EU and I’ve never understood why. I suspect MMT largely explains it. Until humans grow out of nationalism entirely and just function on a whole planet-level I suspect we are stuck with regional currency. This is the most interesting thing facing Scotland at present. I fully understand why they seek to cut themselves away from a so obviously declining Tory Brexitland, but they have many real hurdles ahead.
 

Another Stephanie Kelton talk here. Obviously much the same as the others, but in the questions (about 1:12 or so) she covers the Republican/right creating money and running deficit to immediately give it to the elite donor/oligarch classes, and how it is now only the progressives who are expected to “balance books”. She thinks this is changing as time goes on with more and more Democrats coming on board. I think as is so often the case we’ll only see it here in the UK after it has gained real traction in the US. So much hangs on the next US election; it really could be a pivot point between descending into Trump fascism vs. an economic rebirth. Meanwhile we are still stuck in Britain Trump’s first term…
 
Tony L said:
Agreed. As some may have noticed I’m somewhat pro-EU, but I am so as I believe in removing barriers, allowing freedom of movement, human/civil rights, PR, political accountability etc. All of which are far greater in the EU than in Little England. The € currency has however never worked fluidly across the EU and I’ve never understood why. I suspect MMT largely explains it. Until humans grow out of nationalism entirely and just function on a whole planet-level I suspect we are stuck with regional currency. This is the most interesting thing facing Scotland at present. I fully understand why they seek to cut themselves away from a so obviously declining Tory Brexitland, but they have many real hurdles ahead.
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The problem with the argument of pitting a modern and progressive EU against a right wing and nationalistic UK is that it presents the EU as an homogenous entity imbued with the nice characteristics you ascribe to them. The reality though is the governments of countries such as Hungry, Switzerland, Sweden and the Netherlands manage to be even worse than ours and I have witnessed terrible racist attitudes from the people of Italy and Spain in everyday settings. Finally, many folk from the countries of the EU whilst happy to be citizens of Europe they are not enamoured with the way it’s institutions and policy making works.
 
Spraggons Den said:
The problem with the argument of pitting a modern and progressive EU against a right wing and nationalistic UK is that it presents the EU as an homogenous entity imbued with the nice characteristics you ascribe to them. The reality though is the governments of countries such as Hungry, Switzerland, Sweden and the Netherlands manage to be even worse than ours and I have witnessed terrible racist attitudes from the people of Italy and Spain in everyday settings. Finally, many folk from the countries of the EU whilst happy to be citizens of Europe they are not enamoured with the way it’s institutions and policy making works.
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Switzerland isn't in the EU.

HTH.
 
Tony L said:
Maybe, though covid was a unprecedented event and our establishment are not daft, they fully grasp they are only a few square meals away from having their heads placed on spikes outside of Westminster! They have established we are happy enough to see the mentally ill freezing to death in shop doorways at night, but if middle England starts to go hungry they are done for.
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The furlough scheme benefitted employers just as much as the employed, it enabled them to keep going without digging into their own pockets. If the workforce had been laid off it would have been catastrophic for those businesses (costs of getting new staff, training). I'd suspect the scheme was more about helping friends and donors and the benefit to the great unwashed a happy accident.

This post really more addressed at Ponty, the quote above was Tony's reply to that
 
Enfield boy said:
The furlough scheme benefitted employers just as much as the employed, it enabled them to keep going without digging into their own pockets.
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True, and I’d also add that looking at things as ‘employers vs workers’ is spectacularly dumb and obsolete. It irritates the hell out of me that UK politics is framed in this way. It is like a child’s book.
 
Had there been no furlough, literally millions in the private sector would have been fired, bankruptcies everywhere and heaven forbid, lower house prices. I’d have thought people would be queuing up for their jobs once things reopened. Furlough was, on balance, probably the right thing but it’s got to be repaid (tax rises on individuals and companies on the way).
 
Ponty said:
Had there been no furlough, literally millions in the private sector would have been fired, bankruptcies everywhere and heaven forbid, lower house prices. I’d have thought people would be queuing up for their jobs once things reopened. Furlough was, on balance, probably the right thing but it’s got to be repaid (tax rises on individuals and companies on the way).
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No, it hasn’t. Government spending does not have to be repaid. That’s the whole point. The government has created the money out of nothing. It really does have a Magic Money Tree. The money is created into existence by a few stokes on a computer keyboard. The government has not gone to a vault of gold bricks and taken one or two out and needs to replace them.
 
ks.234 said:
No, it hasn’t. Government spending does not have to be repaid. That’s the whole point. The government has created the money out of nothing. It really does have a Magic Money Tree. The money is created into existence by a few stokes on a computer keyboard. The government has not gone to a vault of gold bricks and taken one or two out and needs to replace them.
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We are already living with one of the consequences of this remarkable magic tree, inflation. Hence tax rises coming on stream in an attempt to temper this.
 
Ponty said:
We are already living with one of the consequences of this remarkable magic tree, inflation. Hence tax rises coming on stream in an attempt to temper this.
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We are seeing inflation due to the Tory government blocking off essential import/export supply chains with their far-right Brexit idiocy. It has nothing to do with furlough.

Again, do try watching the content/researching the theory!
 
Tony L said:
We are seeing inflation due to the Tory government blocking off essential import/export supply chains with their far-right Brexit idiocy. It has nothing to do with furlough.

Again, do try watching the content/researching the theory!
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Might as well just keep everyone on furlough then if the additional money supply isn’t inflationy. Much easier than working for a living.
 
ks.234 said:
No, it hasn’t. Government spending does not have to be repaid. That’s the whole point. The government has created the money out of nothing. It really does have a Magic Money Tree. The money is created into existence by a few stokes on a computer keyboard. The government has not gone to a vault of gold bricks and taken one or two out and needs to replace them.
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Sorry that doesn't work, plenty of historical examples of failed empires and their associated currencies once war debts pile up and sovereigns are forced into debt monetisation.

Money is only useful as a resource allocator when it's scarce. To use Kelton's Monopoly analogy, you can't have the banker giving someone free money half way through the game, say for a station. Every other player will then demand some. So the bank has to share out all the property until it's gone (resource limit as opposed to capital limit). The outcome of the game will then depend solely on the political process by which the bank allocates the resources, and thus will become pointless.

This is far worse than the (deeply flawed) system we currently have.
 
Tony L said:
We are seeing inflation due to the Tory government blocking off essential import/export supply chains with their far-right Brexit idiocy. It has nothing to do with furlough.

Again, do try watching the content/researching the theory!
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As much as Brexit isn't helping, this is a global problem. US inflation is about to become a hot topic that will have a knock on effect worldwide. Years of mismanaging the economy means they've pretty much run out of road. They need to raise IRs to combat inflation but they can't because of all the zombie companies they've created with the years of easy money. They need to keep asset prices high too, so that people will keep spending. Americans are not well known for being willing to pay high taxes.
 
MUTTY1 said:
The professor herself said something has to be taken back,ie tax, to keep the system incentivised.
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But government spending is not dependant on tax that is the point. Tax is just money that is deleted out of existence, it is not used to fund spending
 
Ponty said:
Might as well just keep everyone on furlough then if the additional money supply isn’t inflationy. Much easier than working for a living.
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It was a necessary and affordable response. The alternative would have been businesses going bust and mass unemployment, which is exponentially more expensive. I’m sure it has been abused to some degree though and much was claimed by businesses merely delaying inevitable bankruptcy.

It makes sense to prioritise the parameters that actually matter, e.g. inflation, employment etc. Focusing on a right-wing myth is just bizarre.
 
Heckyman said:
Sorry that doesn't work, plenty of historical examples of failed empires and their associated currencies once war debts pile up and sovereigns are forced into debt monetisation.
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Sorry, not sure how that doesn’t work. How do historic examples of failed empires mean the the basic MMT observation of the fact that money is spent in existence doesn’t work?

Money is only useful as a resource allocator when it's scarce.
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No, the more scarce that money becomes, the more economic chaos you cause.
To use Kelton's Monopoly analogy, you can't have the banker giving someone free money half way through the game, say for a station. Every other player will then demand some. So the bank has to share out all the property until it's gone (resource limit as opposed to capital limit). The outcome of the game will then depend solely on the political process by which the bank allocates the resources, and thus will become pointless.
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If you imagine a monopoly game more like real life where there is a higher table with wine and nibbles and one or two well heeled gentlemen sitting on comfy chairs and a lot of lower tables and a few wobbly stools representing all the public service, then this what happens, the banker does bung extra money to the higher table at several points during the game. And what’s more the banker says he has to put extra tax on the lower tables to be able to do so.

This is far worse than the (deeply flawed) system we currently have.
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No. MMT is the cure for deeply flawed system we have.
 
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