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@GowerInitiative @PhilArmstrong58 "For 3 years, the economy expanded until the US central bank intervened in 1937, repeating its mistake of only a few years before to increase interest rates and trigger another recession."
Remember the Nazis were popular because they ditched austerity..
@GowerInitiative @PhilArmstrong58 💡👇🏻

Some reality at last.. "Tlaib proposes to pay for the cost of the program by calling on the Treasury to use its authority under federal law to issue two trillion dollar platinum coins. The move would not add to the debt." Indeed it would not..
@GowerInitiative @PhilArmstrong58 "For government and voters alike, this crisis is a rushed tutorial in the case for the active and well-resourced state."
via @andrewrawnsley

However don't underestimate the capacity of those who should know better to go back later to business as usual
@GowerInitiative @PhilArmstrong58 @andrewrawnsley The neoliberal abandonment of a properly resourced state, in denial of a post-Keynesian world reality, has led to dependence on financialisation, trapping private households in private debt..
@GowerInitiative @PhilArmstrong58 @andrewrawnsley Although it would be helpful if the rich could use their considerable political and media influence to communicate this fact..
@GowerInitiative @PhilArmstrong58 @andrewrawnsley "There has never been a better time for an epochal paradigm shift and the lessons it would teach us will do the economy, and our people, well for all time to come."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley ".. this is not just that deficits don't matter. In fact, they matter very much. And sometimes they need to be very substantial. Because a government deficit means that money is being put into the economy, while taxes and government surplus mean that money is being removed"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley It's not just a US truth problem. The UK govt has been spinning 'low unemployment' successfully for years, while food banks have exploded all over the country, and working terms and conditions familiar to Dickensian England are now core to 'gig' economy..
@GowerInitiative @PhilArmstrong58 @andrewrawnsley "If health has stopped improving, it is a sign that society has stopped improving."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley This is a decided improvement in journalistic reporting of MMT. The article avoids all the usual misrepresentations as far as I can tell. A good step forward.

@GowerInitiative @PhilArmstrong58 @andrewrawnsley Great analogy! Taking it further, current orthodoxy about the mechanics of govt spending is a bit like imagining we never really stopped the habit of reliance on 'leeching' in medicine..

@GowerInitiative @PhilArmstrong58 @andrewrawnsley For a UK audience this is by far the clearest and most accurate description of our financial system I have come across.
via @RichardJMurphy

@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy ".. There is good reason for that: you cannot, in effect, owe yourself money, which is what happens when a government borrows from its own central bank. And in that case when you repay is a matter of inconsequence: in truth it changes nothing."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy "The Bank of Canada's money creation for the Government of Canada is an internal government process. This means that external factors, such as financial markets dysfunction, cannot cause the federal government to run out of money."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy "And in its infinite wisdom, the market had decided that the 1 per cent – the millionaires and billionaires who had tanked the economy in that 2008 crash – would get even filthier rich than they were already"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy "Meanwhile, the rest of us would see the siphoning off of our wages and prospects so that the 1 per cent could hoard yet more wealth on offshore islands where we and the government could never get our hands on it."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy For over a hundred years there have been those all too ready to predict imminent disaster over the growing National Debt! Never happens. Stephanie illustrates why, and their (seemingly incorrigible) ignorance, succinctly..
#MMTlens #mmt
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy Finally, some honesty!
"The truth is that most of the state debt we owe to each other, and we have the capability to meet obligations denominated in pound sterling. Policymakers have long been concerned that if the public understood this.. "
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy "So-called" borrowing. Indeed, not really borrowing at all in the normal sense of the word
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy "The commercial banking system’s “endogenous” money creation takes the form of credit at interest.....interest-bearing debt grows exponentially, absorbing and extracting more and more income from industry and labor.... debt deflation."
via @MMTScotland

@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland .."It may be epitomized as:
*Give a man a fish, and you feed him for a day;
*Teach him how to fish, and you lose a customer.
*But give him a loan to buy a boat and net to fish, and he will end up paying you all the fishes he catches. You have a debt servant."

Private sector debt
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland 👇🏻
"Running a budget surplus, or even a balanced budget, absorbed income from the economy..shrinking demand for goods and services and leading to unemployment. Without government deficits, the economy would be obliged to rely on private-sector banks for the credit needed to grow"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland "Sovereign governments do face real resource constraints.. [as opposed to financial ones]
Of course, the eurozone doesn’t have this feature. The member nation states in the eurozone are “non-sovereign” because they are currency users, not issuers."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland "They see the budget deficit but they’re missing the matching surplus on the other side. And since many Americans are missing it too, they end up applauding efforts to balance the budget, even though it would mean erasing the surplus in the private sector"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland QE (RBA = Australian central bank)
"RBA is owned by the government. When the RBA owns government bonds, it means the government is lending to itself. The RBA may as well have just typed funds into the government’s balance and saved the AOFM the trouble /1
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland "of auctioning bonds and saved itself the trouble of buying them back. Interest payments on these bonds, incidentally, go from the government to the RBA, and are then paid back to the government again in dividends."
NB AOFM part of their Treasury Dept. Same for UK, USA etc
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland "Of course, it doesn’t have to be this complicated. That it is complicated is partly because it is a hang-over from the time when our monetary system was very different and partly because the current system suits some people very nicely." /3
👇🏻 Image
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland 👇🏻🔥🔥
"run away inflation, whatever that might mean, isn’t something hiding around every corner....In fact, it takes a lot of work to get there.. not just what we’d call high levels of deficit spending, but ultra high levels of deficit spending"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler "we affirm #MintTheCoin’s political significance as a gimmick—whether as a critical parody of sound finance trickery or as a meaningful pedagogical ritual that makes public money creation visible"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler 👇🏻🔥🔥🔥
“I keep saying we don’t have a debt problem, we don’t have a deficit problem,” she continues. “We have a language problem.”
via @StephanieKelton
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton "The history of money matters..if you see money as inherently a credit, one that states have always created at will, you have licence to think about what a state might do with the money it creates now. When a government spends without taxing, it doesn’t have to be committing sin"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton "The Covid-19 crisis has clearly demonstrated what should have been obvious already: provisioning society – whether with food, disinfecting wipes, toilet paper or medical supplies – is not a financial issue."
Not a 'financial' issue. The Real Economy..
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton "This is not a prescription, but merely a description of what actually happens. In the United States, Congress passes the budget, while the Treasury, in cooperation with its fiscal agent, the Federal Reserve, makes the necessary payments. This happens through..the business cycle"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton "Once this crisis passes, the deficit scolds will be back at it again, trying to put roadblocks in front of progressive policies. We will be told we can’t afford Medicare for All, Jobs for All, College for All or halting climate change. The centrists will try to get us back to.."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton "Harvard professor Carmen Reinhart and Ken Rogoff purported to show that when a country’s debt-to-GDP ratio crossed 90%, it led to sharply slower growth....used to justify austerity in countries around the world...result was driven by.. spreadsheet error"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton There seems to be a debt cult, with devotees predicting imminent doom for over a hundred years and counting..
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton Although article doesn't raise the question of why govts feel they have to go through the rigmarole of issuing govt 'debt' (unless they feel the need to defer private sector current spending as an inflation control) it is definitely worth reading
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org For the peddlers of nonsense that our children will have to 'pay for' the fiscal response. If our children have to pay for anything it will be the consequences of underfunded healthcare, education, homelessness, pollution and inequality.. Real problems
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org "Mrs Lagarde also pointed out the fundamental injustice and economic dangers of what is happening. The strong states are spending up to 14pc of GDP directly to keep their economies whole and ensure a rapid rebound: the weak dare not match this."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org "By selling bonds, they maintain the illusion of being financially constrained."
@StephanieKelton vs Edward Chancellor
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org "2) Hyperinflation is always a political (or war-related) and/or foreign-currency-denominated-debt phenomenon. Relatedly: There are no cases where government spending has induced high- or hyper- inflation in modern peacetime politically-stable countries"

@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org "1) Modern currency-issuers cannot suffer from illiquidity or insolvency."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org "Government money is an organizing tool created by the public for the public, and can only be judged on its effectiveness at achieving public goals; the liability side of the tokens themselves are completely meaningless to a currency issuer."
Very well said..
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon "There is a growing feeling, among those who have the responsibility of managing large economies, that the discipline of economics is no longer fit for purpose. It is beginning to look like a science designed to solve problems that no longer exist."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon Stephanie Kelton points out inflation is the sign of govt overspending and not a deficit. Also that there has never been a single instance of hyperinflation ever that resulted from a govt deficit spending in pursuit of the goal of full employment.
3 mins
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon "Article 23 of the Universal Declaration of Human Rights reminds us that everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon After successive private sector financial crises everyone was saving, including emerging asia determined to avoid foreign currency debt (bondage). But Govts stuck in a neoliberal monetarist time-warp also cut back fiscal policy. Surpluses are good, right?
jonturek.blogspot.com/2020/05/the-gl… Image
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon An excellent introduction from @patternholding that would be very accessible to a journalist who has managed to retain his or her youthful inquisitiveness despite the pressures.
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon @patternholding "Money is a social technology and not an inherently scarce resource as the public has been led to believe..
When Roosevelt launched his sweeping New Deal programmes, he did not wait to find the money"
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon @patternholding Nor did US have to 'pay later' through austerity. In fact they unleashed trillions after Pearl Harbour and managed inflation risk perfectly by selling Savings Bonds and adjusting taxation (WW2 wages were suddenly much higher).
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon @patternholding "Mitchell presents a coherent analysis of how money is created, how it functions in global exchange rate regimes, and how the mystification of the nature of money has constrained governments, and prevented states from acting in the public interest."
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon @patternholding Bretton Woods collapsed in 1971. We now live in an era of Modern Money. Mainstream economics hasn't really kept up.
"Economic policy ideas that prevailed in the previous monetary systems (based on convertibility) are no longer applicable."
via @billy_blog
@GowerInitiative @PhilArmstrong58 @andrewrawnsley @RichardJMurphy @MMTScotland @wbmosler @StephanieKelton @cepr_org @rethinkecon @patternholding @billy_blog FDR had to fight 'fiscal conservatives' all the way, preventing full recovery from Depression until WW2 silenced them. The US Treasury focused on bond sales and higher taxes purely as a way of controlling inflation risk. As revealed in this research paper

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