MEcon (het) student. Econ teacher (orth/het). GNU/Linux user. Secular. #LetsGoBlueJays
The United States of Canada
Joined November 2007
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It can't be repeated enough:
Believing federal taxes are used to finance spending leads to fear-driven politics, misinformed policy, unnecessary austerity, rising inequality, economic stagnation, and poor inflation management.
All based on a false household budget analogy.
A brilliant human can't copy themselves, work at computer speed, or instantly coordinate thousands of copies. AI potentially can.
The Hugging Face incident already showed AI agents pooling information and compute to become far more capable together.
History is a poor analogy.
The "AI will kill us all" theory requires a belief that "intelligence" translates into power. Nerds might like to think that the smarter you are the more powerful you can become. The data of history suggest this theory of power is false.
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Can attest. After 15+ years immersed in neoclassical economics, it took a couple of years learning MMT for it to really sink in. Reworking deeply ingrained mental models can take time and persistence.
1/ As a respected heterodox economist, Richard Wolff has a lot of important and legitimate things to say. But here he fundamentally misunderstands the monetary system and bonds. A short thread on where his explanation goes wrong...
teapaw.org/democracynow/status/20…
@TYT & @cenkuygur still pushing the "US borrows from China and our grandkids must pay it back" myth.
The US issues the dollar. China holds dollar assets, mainly Treasuries. Future generations don't "repay" the national debt like a household loan. youtube.com/watch?v=vwTNfMf8…
1/ I often agree with much of @TYT’s political analysis, but @AnaKasparian's segment on Treasury yields contains serious economic errors.
The bond-market story is real; her explanation of federal spending, debt and Treasuries is not. Let me explain... youtube.com/watch?v=sykq5vut…
1/ Philly Fed WP 23-02 validates MMT / Post-Keynesian claims for decades: banks create deposits via lending, reserves don't cause lending, capital matters not deposits. Yet zero MMT or Post-Keynesian economists cited. Contrast this with the BoE…
doi.org/10.21799/frbp.wp.202…
2/ …who in 2014 at least used the term "endogenous" and cited Post-Keynesian work (Moore, Howells, Palley). Same conclusions nine years later, Philly Fed manages to attribute even less. Ideas get absorbed, credit doesn't.
bankofengland.co.uk/quarterl…
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This is true with every policy position often associated with MMT economists. The most prominent of those is the job guarantee. The lens allows us to see the JG as a viable option.
However, though uncommon, one can use the MMT lens while holding values that reject the JG.
No, there are various opinions on that. MMT describes bond operations (and more).
MMT does not "endorse", it's a lens.
However, that lens leads to more policy options compared to conventional thinking, where the government is incorrectly modeled as a currency user.
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Hockett applies a level of analytical rigor to economics that he doesn't seem to care to apply to claims about Israel and Gaza.
That's about as polite and generous as I can be.
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Student asks a brilliant question. Ross Gittins replies with pure slop: calls MMT "Modern Monetary Policy," says governments must borrow before spending, and never explains why debt and deficit targets beat inflation and resource constraints as guardrails. youtu.be/MwG5xY0TpzU?si=rtoR…
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"Imports/trade deficits are bad" isn't a mainstream starting point. It's just an ideological reflex.
A base-case starts with voluntary exchange, then asks what conditions make it harmful. This is MMT on trade.
Base-cases are analytically useful heuristics, not "useless".
Diverse and shifting circumstances that apply to each nation are the reality of the world. 'Cost' and 'benefit' are polysemic terms with meanings that vary according to these circumstances. Cheap imported goods can be destructive to whole ways of life in some nations - Ha-Joon Chang got that right. The 'base-case' is irrelevant because 'normality' doesn't exist. The other way round is stupid, too.
Nuance.
Susan Borden (@darbyshiretrust) on US dollar hegemony: susanborden.substack.com/p/s…
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Auctions aren't Kickstarter. Primary dealers must bid, and the BoJ is the backstop.
Exactly. If people don't want to buy your debt and the currency has collapsed because you capped yields in the past, your hands are tied and you can't just keep on capping yields indefinitely, because those no political consensus for this. That's where Japan is...
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