Jeff L. Epstein 🦉🤝🌍 Profile picture
Mar 6, 2019 19 tweets 8 min read Read on X
1/ Where does money come from?

[#LearnMMT THREAD v.1]

Money: US: US Dollar
U.K.: British Pound
Australia: Austrailian Dollar
Canada: Canadian Dollar
China: Yuan
Japan: Yen
...
2/ In fiat currencies, there are two kinds of money:

1. High Powered Money (HPM), or "currency."
2. Bank loans, or "credit."

This current thread discusses only "currency." To learn about bank-created money (where banks are "franchised" by gov'ts):
3/ In the United States, before the first US dollar was created, no one could spend, save, invest, or pay their taxes in US dollars. This question, "Where does money come from?" must be broken into two parts:

1. Who created it? (And how?)
2. Who authorized its creation?
4/
1. Who creates the US dollar?

The central bank (CB), which in the US is called the Federal Reserve ("the Fed"), actually creates the US dollar.

But the Fed doesn't create money just because they want to.

They only do it when they are commanded to do so by the US Treasury.
5/ The Treasury only does it when they are commanded to do so

by a law that was signed by the president

(after the federal budget is passed).

The bill that was signed into law by the president was written by Congress

(under the influence of big money lobbyists and donors).
6/ So:

1. Under the influence of big money
2. a number is written into a bill by Congress (representing the amount of money they believe will be necessary to implement it).
3. The bill is passed by Congress and signed by the president.
4. The federal budget is passed.
7/
5. The Treasury is now commanded to
6. Command the Fed to create the money.

As far as how the Fed does it, it's called "reserve accounting," which is described in this thread:
8/ So the answers are:

1. Who creates the money?

The central bank, which in the US is the Fed.

2. Who authorizes its creation?

According to the Constitution of the United States: Congress.
9/ Article 1, section 8 of the United States Constitution defines the power of Congress. Two of these powers are:

- "to coin money" &
- "to provide for the punishment of counterfeiting"

(Article 1 sec 8 is still in effect today because no constitutional amendment overrides it.)
10/ ("To coin" does not refer to literal metallic coins. It is a verb phrase meaning "to create." As in, "To coin a phrase." It means that Congress can create US dollars of any kind: paper/cloth, metallic coins, electronic, etc. See: monetary.org/pdfs/home/Nate…)
11/ Congress is the "monopoly currency issuer" of the US dollar. It is the only entity in the world that is allowed to create it.

All the rest of us – as far as the US dollar is concerned – are "currency users":
12/ Currency users of the US dollar:

- me, you
- our households, businesses, cities, municipalities, and states
- other countries, such as China and Russia.

All currency users are in exactly the same position. The only difference is the amount they have.
13/ Currency users must get INCOME before they can spend. Currency issuers – especially the fed gov'ts of countries with an abundance of domestically available resources* – do not need any income. (*real resources: raw materials, labor, technology, & time)
14/ Here is an example of a number written into a bill by Congress: $1.7 billion in 2019, and again in the following years. When this bill becomes law (and the federal budget is passed), that is the amount money ultimately created by the Fed each year.
15/ That amount of money is created because they TYPED THAT NUMBER INTO A DOCUMENT.

Similar to a child drawing a bill onto a piece of construction paper.

Similar to ticking up the number on a scoreboard.

The money is created, because we ***want it to be created***.
16/ Finally, it is important to note the critical difference of funding in ambitious bills that benefit only the many, and those that benefit the few (i.e. military and war). Most big bills/laws that benefit the many are saddled with economically needless "pay fors."
17/ Although economically pointless, they are sinister poison pills that sabotage its passage and make it much easier to kill and dilute if passed. Hence, the nearly 90-year drum beat of, "Social Security is going broke/being stolen/borrowed from!"
18/18

#LearnMMT

To #LearnMMT, here is a good place to start👇. Check out my pinned tweet for more. When you’re ready, ask questions. Me and many others are here to help.

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More from @jefflepstein

Feb 21, 2020
1/ Up until now, Bernie & Warren refused super PACs in the primary. Warren, however, openly stated she'd take it in the general – but not Bernie. Today's she changed her mind. She WILL take it in the primary because all the other candidates are doing it.
2/ This is based on the false notion that grassroots organizations such as @OurRevolution and @sunrisemvmt are super PACs. They're nothing of the sort. readsludge.com/2020/02/10/fac…
3/ It turns out that Warren's "new super PAC" has in fact been in the works since at least October 2019.
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Sep 2, 2019
Here is economist @SandyDarity’s thread criticizing @AndrewYang’s Freedom Dividend. The original thread was disconnected at multiple points so I’m reproducing it here in whole.

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Aug 31, 2019
1/ Federal taxation is the destruction of money. This is not an option or a choice, there is no other way for it to be. @StephanieKelton (then Bell) in her 1998 paper, "Can Taxes and Bonds Finance Government Spending?” (levyinstitute.org/pubs/wp244.pdf)

[#LearnMMT THREAD v.1]
@StephanieKelton 2/ Federal taxation is the destruction of money. This is not an option or a choice, there is no other way for it to be. Eric Tymoigne (@tymoignee) in his 2014 paper, "Interrelations between the Treasury and the Central Bank” (levyinstitute.org/pubs/wp_788.pdf)
@StephanieKelton @tymoignee 3/ As far as *how* federal taxes are destroyed... It’s no different than how the 100 is destroyed (or disappears or dies) when you minus it on a calculator. To the federal government, money is not real (as it is to me and you), it’s a concept.
Read 8 tweets
Aug 5, 2019
1/ To me, this is the core of the FJG v UBI debate 👇. (I expect this will change, but these are my thoughts after two absolutely massive debates with UBIers that I've had in the past weeks.)

[#LearnMMT thread v.2]
2/ A major objection UBIers have to the FJG is that in the hands of our corrupt government and their for-profit bribers, the FJG would be outright slave labor. Here is a leading UBI advocate, evoking the Nazi holocaust.
3/ If not slave labor, then indentured servitude. Here’s 2020 candidate Andrew Yang (at 12min, 45sec).

Rubin: “As a small gov’t advocate, the FJG sounds like indentured servitude."
Yang: [laughs] "Yeah, why don’t we just give everyone grey jumpsuits?"

Read 28 tweets
Aug 4, 2019
1/ To me, this is the core of the FJG v UBI debate 👇. (I expect this will change, but here are my thoughts after two absolutely massive debates with UBIers that I've had in the past weeks.)

[#LearnMMT thread v.1]
2/ A check will undoubtedly help millions. My concern, a primary concerne of government and SOCIETY, is the collective. UBI will harm the collective, which in turn will harm citizens, starting of course with the most vulnerable.
3/ Most UBI supporters don't understand the fallacy of composition. They're so passionate abt the check being good for THEM, they don't look deeper to see that scaling that program up for the entire economy is extremely detrimental. en.wikipedia.org/wiki/Fallacy_o…
Read 19 tweets
Jul 16, 2019
1/ @DougHenwood's [COUGH] critique of #MMT, and three responses by MMT economists and scholars.

[#LearnMMT THREAD]

Henwood's piece: jacobinmag.com/2019/02/modern…
2/ #MMT Economist @ptcherneva: "Henwood is tethered to the wealthy by an imaginary umbilical cord. Time to cut the cord. MMT has a profound emancipatory power. jacobinmag.com/2019/02/mmt-mo…
3/ #MMT scholars @videotroph, @nathanTankus, @RohanGrey, and @RaulACarrillo: "For Henwood, the left’s role is merely to argue extra hard for corporations and the wealthy to pay their 'fair share' of taxes." mronline.org/2019/05/02/mod…
Read 7 tweets

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