Thread by @darenpa72

Money is created by the Central Bank, intermediating between government and its creditors.

The Central Bank doesn't earn interest except when pawning assets for Banksters. Even then, its rate isn't usurious.

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But, yes. I personally do agree that the CB should not always ride to the rescue of banks that would otherwise be insolvent.

However, this ordinarily only happens "in exceptional circumstances".

Usually the CB only creates money when government spends.

And when it does this, the CB does not earn any interest.

The private creditor to the government does.

In fact, what really happens when someone lends to the government at interest, is the money the government borrows is extinguished.

To be replaced later, at maturity, with the same amount of money, plus the additional interest that the creditor is then due.

If you lent some of your "competing currencies" to somebody, government or otherwise, you would expect to receive some reward for your risk.

But to return to your original point:

1) The Fed does not earn interest when govt borrows.

2) Nobody earns interest when govt just spends.

3) When govt borrows, a private actor will earn interest, and the rate is not "usurious".

4) When private actors borrow from other private actors, this does not create (base/actual) money. The lender risks loss.

So I think it is clear that I understand your position, and that I understand why you're wrong.

QED.

I don't really consider myself "an MMTer", TBH.

I understand their MMT model, but it is incomplete AFAIAC.

I'd also don't share their personal prescriptions about perfect control over full employment and inflation.

We can only react, not dictate.