Heckyman
pfm Member
What if the gov can’t afford to have folks retiring at 65? You might have to go work in an abattoir until you’re 70 thanks to all the missing imported labour…What if someone can’t afford to retire at 65?
What if the gov can’t afford to have folks retiring at 65? You might have to go work in an abattoir until you’re 70 thanks to all the missing imported labour…What if someone can’t afford to retire at 65?
Our Government can afford to buy whatever it wants GBP’s.What if the gov can’t afford to have folks retiring at 65? You might have to go work in an abattoir until you’re 70 thanks to all the missing imported labour…
OK, so why not let everyone over, say, 50 get the state pension from the magic money tree?Our Government can afford to buy whatever it wants GBP’s.
The only limit to government spending is inflation. The limit is not the availability of money, the limit is the consequences of where and how it is spent.OK, so why not let everyone over, say, 50 get the state pension from the magic money tree?
What if someone can’t afford to retire at 65?
Yes, except I wouldn’t say we should invest in things that can pay back, but things we need. Like climate change.Indeed. We should not forget that the government easily created £37bn, which over ten times the cost of a full-term NASA mars lander project, for Dido Harding’s test and trace failure. The money can be created, as it is when you take out a mortgage etc. It just needs to be invested in things that pay back long-term (i.e. not Dido Harding, Matt Hancock and the rest of those crooks).
Such effects could me mitigated however by introducing the policy in phases by making the age 75 to begin with and reducing it after say five years to 70 etc until the state pension age figure is attained. This would allow folks to plan accordingly
Yes, except I wouldn’t say we should invest in things that can pay back, but things we need. Like climate change.
I'm no expert but I think the underlying constraint is the real capacity in the economy - inflation is just the "temperature gauge", as it were. In this respect, MMT follows Keynes' line: if we have the resources to do it, then we can afford it. There must be a bit more to it than that because, as I understand it, MMT is not just reheated Keynesianism.The only limit to government spending is inflation. The limit is not the availability of money, the limit is the consequences of where and how it is spent.
There are exceptions, judges, HoL
By saying that forcing retirement on many aged rock stars might be a good move.
Yes. In the same manner, the NHS is a benefit, not a cost as our right wing friends would have us believeAverting climate change will have the biggest payback of any investment in history. Not averting it will burn all markets to the ground. Literally. Well any that aren’t already underwater by that point. There is no amount I wouldn’t create/borrow to address this one.
https://podcasts.apple.com/gb/podca...christian-reilly/id1375093518?i=1000455452151Why? And does this mean MMT is only an option for countries that issue currency widely used for international trade?
Nigeria for example issues it's own sovereign currency (naira).
Yes. In the same manner, the NHS is a benefit, not a cost as our right wing friends would have us believe
As already said, I have no credentials, but you don’t need credentials to see that he is making a conclusion based on a false understanding of what MMT actually is.Not personal at all but pointing out you were quick to dismiss Mr Summers. Just curious as to your credentials to be able to suggest that he doesn’t understand what he’s talking about. Ultimately I feel this comes down to political beliefs. The left want to spend into oblivion and the right want to balance the books. Which side of that debate you fall on will generally dictate how you view MMT and which way you vote.
As already said, I have no credentials, but you don’t need credentials to see that he is making a conclusion based on a false understanding of what MMT actually is.
The fact that there is opposition to MMT is unsurprising as the household economy myth is both very pervasive and makes intuitive sense because it chimes with our own experience.
Half a millennium ago we believed that the earth was at the centre of the solar system. We believed it because was preached from ever pulpit in the land and because it chimed with our everyday experience; if we jump up and down the earth doesn’t move, and you can see the sun moving in the sky, see, just look!
But the Copernican Revolution gained currency thanks to a scientific observation of the real order of things. What then followed on from that simple revolution of understanding, was not so simple. We needed a theory of gravity to explain why the earth didn’t move under our feet when we jumped up and down, a theory which only got more complicated and more counterintuitive as it was developed further and further. But even if we don’t have an Einstein like understanding of gravity, that does not threaten our understanding of the simple Copernican observation of the real order of things in the solar system.
Just as the sun does not go around the earth; it’s the opposite, so tax is not required to create government spending; it’s the opposite.
Government does not need an income in order to spend in the same way that a household does. When the government spends, that money is the money circulating in the economy. The Deficit is an accounting term to describe the difference between what the government spends and what it receives. In the real world outside a spreadsheet, the deficit is not a negative, it’s the money in our pockets.
MMT is not about spending into oblivion* it’s about spending up to the limit of available resources so as not to cause inflation. The very fact of unemployment means that we have resources that are not being deployed, and more than not being deployed, are a cost.
It is however true that right wing governments are obsessed with ‘balancing the books’. Balancing the books is necessary in our own households (and in business, and local governments etc) but where money is created, balancing the books is an accounting exercise leftover from the days when money was notionally based on real things.
Nowadays what the government spends is the money in the private sector. What is a government deficit, is a domestic and private sector surplus
Balancing the books, like Clinton was so proud to do, just turns a domestic and private sector surplus into a deficit and household debt. Clinton’s balanced budget was a cause of the 2008 crash.
We don’t need to balance the books, we need to balance the economy. We need an economy that is balanced between supplying our need up to available resources, and the dangers of inflation and dysfunction. We need to balance the economy between the need to produce growth and the need to save the planet.
*All modern examples of Hyperinflation are not the result of spending to oblivion. Oblivion was caused by the need to pay debts in a foreign currency https://podcasts.apple.com/gb/podca...christian-reilly/id1375093518?i=1000510397860
Thank you for your reply. You are absolutely correct in that you and I, and everyone else outside the issuing bank, cannot have something for nothing, there is indeed, no free lunch for us. But that government can and does issue money into existence is undeniable. To say that the government requires income from tax before it can spend is nonsense, it’s as if you sit down to a game of monopoly and the banker says to all the players that they have to hand over money before the game san start. It makes no sense.Appreciate your post. I have a fundamental belief that you can’t have something for nothing, there is no free lunch. You could argue that looking at yesterdays budget, the govt is well down the road of MMT. Sunak is spending plenty of money (he doesn’t have), with record borrowing and historically high taxation. This is lunacy from a conservative govt and I question whether I can continue to vote for this cavalier approach. Throw in rapidly rising inflation (which bizarrely, these MMT guys don’t seem to think exists) and inevitable interest rate rises on record govt and personal debt and if you think things are bad now, you ain’t seen nothing. Those who think the govt can continue to throw money at problems are in for one hell of a shock IMHO. It really is time to ensure you have resilience to external factors and resulting events which may unfold.
You mention the 2008 crash. If regulators had been on top of their game, the shenanigans which took place (in the UK, not just the US) would have been stamped on and the debacle could have been avoided IMHO.
Appreciate your post. I have a fundamental belief that you can’t have something for nothing, there is no free lunch.