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Just J @consbyname
, 7 tweets, 2 min read Read on Twitter
For me the biggest insight regarding #MMT isn't that taxes aren't needed prior to spending but that bonds are for monetary policy not fiscal. The big scary borrowing everyone hammers on about so much is nothing more than savings opportunities with an interest rate set by the BoE.
This realisation opens up important discussions about whether these savings opportunities are being provided on a fair and equitable basis, or indeed, whether they should exist at all in this format given the misinterpretation of their function.
Whilst eliminating interest on government "debt" may well be desirable, it would also eliminate safe savings opportunities for those in the private sector. For me personally, if a ZIRP were to be implemented then an offer should be made for individual savers. This may be in the
Form of a regular pensions savings account for each citizen, criteria based savings for the financial sector and fund managers, and perhaps a baby bond program to alleviate at least some elements of inequality and social mobility.

By restructuring private savings and
Reframing them as the obvious savings opportunities they are we accomplish two important things.

1. Remove the political tool of fearmongering the national debt and interest payments.
2. Create a counter conditioning narrative so that people can start to view the debt positively
Point 2 is incredibly important in order to shift public consciousness and vaccinate future generations against committing grave errors in the name of "reducing the debt burden". It would also allow a positive emotional attachment to be made to the national savings figures.
This would be akin to the emotional attachment some of us in the UK feel towards NI and taxes for services such as the NHS as we feel we have a stake in the game because of them, incidentally this is one of the reasons many deem the NHS "ours" more than say public land/services.
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More from @consbyname see all

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I saw it sir I saw it, the homeless level rise.

I saw it sir, I saw it, the light go from his eyes.

I saw it sir, I saw it, when Saudi missiles flew.

I saw it sir, I saw it, but what's a Con to do?

I saw it sir, I saw it, when winter took my Nan.

1/n
I saw it sir, I saw it, but preferred to kick the can.

I saw it sir, I saw it, the patients' cries of woe.

I saw it sir, I saw it, but people over dough?

I saw it sir, I saw it, the acid in his face.

I saw it sir, I saw it, no police to give chase.

2/n
I saw it sir, I saw it, the tower, how it burned.

I saw it sir, I saw it, their warnings they were spurned.

I saw it sir, I saw it, a school child looking thin.

I saw it sir, I saw it, they're eating from the bin.

I saw it sir, I saw it, the Teachers oh so blue.

3/n
Read 5 tweets
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Much is made of the fiscal multiplier, the concept that spending by government, or reductions in taxes (ideally of those who will spend that extra money rather than hoard it) will multiply spending, incomes and investment in the economy. 1/5
What is less discussed is that the opposite is also true. If you reduce spending or excessively tax those that would have spent that income, you create a negative multiplier effect where each £ of reduced gov spending results in lower spending, incomes and investment. 2/5
If we take the NHS as an example, estimates for the fiscal multiplier lie between 2.5 and 6.1 depending on where the money is spent. In other words, every £1 spent by gov on the NHS creates between £2.50 and £6.10 worth of economic activity, the expenditure has multiplied. 3/5
Read 5 tweets
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When discussing the #NHS in terms of privatisation I always think it's useful to equate what neoliberals and the private sector are doing to it as akin to a parasite infecting its host. The goal of a parasite isn't to kill its host but to extract energy to allow it to grow. 1/11
Ultimately the parasite seeks to reproduce and spread, much the same as private providers offering and supplying public services has spread and increased over the years. So what is the "energy" these parasites are extracting, and how do they know they won't kill their host? 2/11
The energy source in the case of the NHS is the Treasury, the "energy" itself is the national currency. These parasites know that the currency issuer (government) has an unlimited ability to create the currency, and provided the public doesn't learn this fact, they can 3/11
Read 11 tweets

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Everyone knows that money makes the world go round but few know that it spins in completely opposite directions to how our monetary system is usually described. The UK money system explained in 2 minutes (plus links for further reading) thread follows:
Money 1 - Your Bank Deposit is a record of how much YOU have loaned to your bank (to use as it wishes) - a positive balance in your bank account is just a record of what your bank owes you.
As a depositor, you are a low ranking creditor to the bank. Therefore the Government provides assurance that up to £85000 per individual is safe. fscs.org.uk/globalassets/d…
Read 25 tweets
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Thread: This is what I would like @billy_blog’s feedback on.
I *thought* MMT was 100% descriptive, 0% prescriptive. Here are two slides from my MMT-101 lesson (video: ):
In other words, it was my understanding that MMT was explicitly non-political. That people can take the *knowledge* of MMT and use it to implement policies that are progressive, neoliberal, Republican, Libertarian, etc. – or not use the knowledge at all.
Read 38 tweets
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I had never heard of Modern Monetary Theory #MMT until this @planetmoney podcast. It piqued my interest and I started reading more about it. It has completely transformed the way I view govt. spending and what govt. should be doing.
npr.org/sections/money…
1/4
I'm still trying to understand a lot of this, but my big takeaways are:
1) Taxes do not fund federal govt. spending; the govt. creates money and then removes it through taxes. So, it is impossible for the federal govt. to run out of money; it cannot default.
2) A federal deficit means a private sector surplus, and a federal surplus means a private sector deficit (ignoring foreign trade). In order for you and me and all other private individuals and companies to have savings, there must be a govt. debt!
2/4
Read 5 tweets
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“Then why does the military budget keep going up as social programs keep getting cut?"

Now that’s a good question.

#LearnMMT

[thread – version 2]

You and I require income (a paycheck) before we can spend. We must choose and prioritize what each dollar is spent on. Food or medicine? Can’t afford both this week. Or... gotta chop that pill in half so we can buy food for our kids. Hard choices. One or the other. Either/or.
Before Nixon took the US dollar off the gold standard in 1971, the federal gov't was the same way: they needed income (i.e. taxes) before they could spend. Now that the US dollar is a "fiat" currency, "a budget" to me and you is

**NOTHING**

like "a budget" to the federal gov't.
Read 34 tweets
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I hear a few ppl say that #MMT applies only to the USA & not the U.K. I don’t know where this comes from, but they’ve made up so much stuff about MMT that I’m not surprised about this. so lets clarify some things:

>
1) MMT applies to all nations that have a fiat currency & r monetarily sovereign.

2) the UK has a Fiat currency. So does the US, Australia, Japan, and many others. This means their currencies r not pegged to gold or any other currency or commodity.

>
3) these countries are also monetarily sovereign. That means that their national govts are the monopoly issuer of the currency.

4) in all these nations, commercial banks also create money through credit. But this is not the same as “currency”, which is a net asset to us.

>
Read 13 tweets
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So as @AndrewWilson has laid down the floor for healthy debate, I wish to do a thread on why an independent Scotland should have its own currency. I do not believe that having monetary policy controlled by the BoE that doesn't suit our needs is the correct approach.
First, I will take head on the key tests that are laid out in the @sgcommission's report. Many of the points I will raise have already been touched upon by the likes of @RichardJMurphy, @billy_blog and @Common_Weal. I highly recommend you read up on their views. The six key tests laid out by the Growth Commission are 1) Fiscal sustainability 2) Central Bank credibility and stability of debt issuance 3) Financial requirements of Scottish residents and businesses 4) Sufficiency of foreign exchange and financial reserves 5) Fit to trade and investment patterns 6) Correlation of economic and trade cycle
1) Fiscal sustainability

One fact that #MMT teaches us is that monetary sovereign nations cannot go bankrupt in regards to their own currency. How can they when they are the monopoly supplier and own most of their debt? You can see my thread on Japan.

Read 29 tweets

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