Thread by @CantillonCH

Pumping her new book - -with a lot of help from the various House Organs of Davos @FT @nytimes, etc, is Madame #MMT herself - @StephanieKelton 1/x

"That means that the government’s -$X is always matched by +$X in some other part of the economy. Balance sheets must balance, after all. The government’s deficit is always mirrored by an equivalent surplus in another part of the economy," here passes for wisdom. 2/x
#MMT

Anyone who tries to argue about how a dynamic system works by taking intermittent snapshots - i.e, by compiling periodic, tautological accounting balances and stopping there - is a simpleton or a charlatan or both.
3/x #MMT

Not sure which Madame #MMT falls into, but there seem to be no other categories into which she and her crew can rightly be put.
4/x

Suppose the State issues a T-bill to a bank which credits its account with $100. The cashed-up welfare recipient of that comes to me to buy something I have up for sale. Not knowing how he -or the State- got the money, I unthinkingly give him my real goods in exchange for it.
5/x

Now, yes, if we freeze everything there, I have a $100 claim on the bank and it still has the original T-bill as its corresponding asset, so - HOOORAY! - government debt (minus) = my asset (plus). #MMT Rules!
6/x

Here's the rub: once those real goods are consumed, unless they have been put to (re)productive use, my $100 claim is empty. There is nothing now in existence which I -or any poor unfortunate whose goods I exchange for that money, in my turn- can buy to replace them.
7/x

We have been gulled into playing pass-the-empty-parcel -or, as #Kelton's beloved #Keynes snidely remarked, passing 'the bad, or depreciating, half-crown to the other fellow.'

And we're supposed to build an earthly Paradise on that one, well-worn & very cheap old trick??
#MMT
8/x

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