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27 Nov 20, 11 tweets, 5 min read
“Even the most simple understandings are lost in the public debate about budget deficits and public debt. The Flat Earth Theorists who whip up deficit hysteria each day like to stun people with large numbers.”
“We would then learn that budget deficits are just the mirror image of non-government savings. Saving is usually considered to be something we should aim for. Increased wealth is also something we usually aspire to.”
#SpendingReview
bilbo.economicoutlook.net/blog/?p=10384&…
“As a matter of accounting between the sectors, a government budget deficit adds net financial assets (adding to non government savings) available to the private sector and a budget surplus has the opposite effect. “

bilbo.economicoutlook.net/blog/?p=332
“It is actually rather obvious but all government spending involves money creation.”

bilbo.economicoutlook.net/blog/?p=352
“In short, we should reject any notion that the emerging federal deficits are damaging and will indebt the future generations.”
#SpendingReview
bilbo.economicoutlook.net/blog/?p=381
“People think QE, as used in the US and UK since the financial crisis, and still in use in the EU and Japan, is free money for the banks and will lead to rampant inflation. It really isn’t and it really doesn’t.”
@_ClaireConnelly via @Renegade_Inc

renegadeinc.com/what-is-quanti…
QE is a tool used by the Bank of England to buy things like government gilts and other bonds in the open market.

QE does not print money and does not cause inflation. Image
For the economy, it is an exchange of assets: gilts for bank deposits. Since bank deposits generally pay less interest than gilts, the economy receives less interest income.

gimms.org.uk/fact-sheets/qu…
Neoliberalism has narrowed government security to government bonds. MMT wants to reverse it to its original wider remit - with greater use of National Savings and the Ways and Means Account. 
The Bank of England leverages the largess of HM Treasury, the source of Sterling.
MMT says you don't need tradeable fixed rate bonds. It can all be done with daily cash management and National Savings deposit accounts that pension funds can access - which then clears out a whole raft of inefficient financial engineering.
#CorporateWelfare
#Banking #MMT
“the myth of Bank of England “independence”, and illustrate the central, driving role of HM Treasury in the UK financial system and the primacy of Parliament in determining spending and resourcing in the UK.”
#MMT

gimms.org.uk/category/mmt-l…

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More from @GowerInitiative

Gower Initiative for Modern Money Studies Profile picture
14 Nov 20
The hyperinflation in Weimar Germany in 1922-23 has become the poster child of mainstream economists – and especially the monetarists – when presenting the benefits of constraining governments by the rules of ‘sound finance’.
Their narrative presumes that governments are naturally inclined to spend beyond their means and that, if left to their profligate ways, inflation ‘gets out of hand’, leads to hyperinflation in a continuous, accelerating, unstoppable catastrophic collapse of the value of money.
In contrast to this ubiquitous mainstream analysis, we recognize a fundamentally different origin of inflation, and argue that inflation requires sustained, proactive policy support. And, in the absence of such policies, inflation will rapidly subside.
Read 6 tweets
Gower Initiative for Modern Money Studies Profile picture
24 Oct 20
The U.K. a government is NOT a household OR business, it has the power of the public purse. #MMT exposes the myths and reveals the policy space available for public purpose if we can win the votes to achieve our goals.
Pushing our politicians and policy makers to accept the reality of monetary operations isn’t easy, @StephanieKelton has made it a whole lot easier with her best selling book ‘The Deficit Myth’.
Buy and share a copy and let’s get the U.K. building a better economy.
#LearnMMT Image
The purpose of taxation is for the government provision itself by creating unemployment, driving demand for its currency.
Tax destroys currency returned to the issuer, making space for further spending, it doesn’t pay for anything.
Income & sales taxes are highly regressive.
Read 4 tweets
Gower Initiative for Modern Money Studies Profile picture
16 Oct 19
Slightly belatedly, this week GIMMS celebrate our 1st Anniversary 🥂🍾
A big thank you to all our followers and supporters who have contributed to our efforts over the last year to push for a broader awareness of #MMT From our London launch event last October.....
Where we announced the launch of our website, featuring our own #MMT factsheets with links and videos to the work of core academics, plus our searchable Zotero database of published papers.
We continue to enrich our site with our weekly #MMTLens blog.

gimms.org.uk/about/
Many thanks to our Advisory Board; Warren Mosler, Bill Mitchell, Randall Wray, Mathew Forstater, Stephanie Kelton, Pavlina Tcherneva, Fadhel Kaboub,Rohan Grey, Stephen Hail, Deborah Harrington & Jessica Ormerod for their advice, support and faith in our project.
Read 15 tweets
Gower Initiative for Modern Money Studies Profile picture
6 Oct 19
Please read & act on this long but incredibly important #NHS thread...

Gimms founding member and longtime dedicated public service campaigner at @ThePublicMatter Deborah Harrington, who when asked 'How much of the NHS has already been privatised?'

Answered -
Pretty much all of it.

While all eyes are on companies like Virgin thinking they are the threat the NHS itself has been broken up into over 500 ‘provider bodies’ which are a mix of the arms’ length public interest companies, private and voluntary sectors. 1/
The ‘NHS’ Foundation Trusts are companies which run subsidiary companies and compete with one another for contracts and sub-contract to the private sector for ‘extra capacity’. 2/
Read 19 tweets
Gower Initiative for Modern Money Studies Profile picture
27 Feb 19
“With floating exchange rate policies, central banks target policy interest rates - prices - rather than any money aggregate. The narrative favoured by central banks and academics is that of the central bank adjusting the quantity of reserves supplied in order ....”
“to keep market rates in line with their target rate.
This implies that, in the US case for example, the Fed varies the quantity of reserves in order to achieve its interest rate target.
However, we argue in favour of a reverse causality vis-a-vis orthodox analysis...”
“and contend that rather than adjusting the supply of reserves to meet its policy rate, as the monopoly issuer of reserves in a floating exchange rate regime, the central bank, in practice, acts as the price-setter for the level reserves demanded by the banking system”
Read 4 tweets
Gower Initiative for Modern Money Studies Profile picture
6 Jan 19
“The monetary system is a tool to move resources to the government: the government imposes a tax on its citizens, payable only by a token which only comes from the government.”
“In order to get the token (money) to pay the tax, the citizens must work for the government, or must work for someone else who already has the tokens.
A government deficit is when the government spends (gives out tokens) more than it taxes (takes tokens back)”
“The extra tokens that the government gives out but does not take back ends up as savings in private hands.
If private citizens don’t want these extra tokens, then they will try to buy things with them instead of holding on to them.”
Read 6 tweets

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