Next time Mr Polanski is asked a chldish 'gotcha' style question about debt interest, he should say these things, though not perhaps in this order.

1) Google it (apologies to A. Bandt).
2) Debt issuance by the UK Govt is a choice, not a necessity. It is not to fund deficits... Currency issuers spend via currency issuance every day. They do not need to issue debt securities at all, from the point of view of paying for their spending.

Very much looking forward to our new weekend in Melbourne in a few weeks. It will be inclusive while not being dumbed down at all. There will be plenty of opportunities for discussion. This is broadly what we will cover.... We will start by exploring what terms like currency and money actually mean, the difference between govt and bank money, currency issuance and use, the hierarchy of moneyness, and the meaning and importance of limitations on monetary sovereignty.

It is difficult for outsiders who take an interest to understand why so many professional economists understand neither our ecological economics nor modern monetary theory. They may have heard of MMT now, but they have no idea what it is and have read virtually none of the academic literature. They have sometimes been trained in universities where just explaining to students why the money multiplier and loanable funds theories are wrong and the reality of endogenous money and even the history of money can get you abused by neoclassicals.

I keep seeing stories about how much interest payments on the national debt cost taxpayers. That is nonsensical. Perhaps we can change the nonsense into something which makes sense in small steps. Here goes.... Firstly, it is the government's debt, if anybody's. I own some of it. It isn't my debt. So 'interest payment on the government's debt cost taxpayers X'.

People like me were saying these crazy central bankers would raise rates until they crashed the system, unless they got very lucky with Ukraine etc and inflation fell in spite of them before they went too far. MMT economists were right in the early 1990s about the catastrophic design failures in the Eurozine system (which have still not been fixed).

To me, this is what AI will eventually mean for higher education - a reversal in our understanding of our purpose. People are forced to take degrees purely to get a job, with no interest in what they are studying. Hence the temptation to use AI and other ways to cheat on essays. I hope given enough time, and perhaps a very long time, higher education will be refocused on people studying a subject because they have a genuine interest or even passion to learn. No desire to cheat. A want or need to learn.

Sad to say politicians will have listened to Ken Henry talking about 'a mountain of debt' and a fiscal policy 'crisis' on ABC Radio National. Any tax review should start by avoiding ridiculous myths and addressing the real functions of federal taxes in a monetary sovereign state. Next time someone tells you governments should balance their budgets, show them this chart, relating to the average of advanced economy governments, since 1990. The black bars show the government balance. Always in deficit. Why? Because private surpluses require public deficits.

I'd love for you to join us, if you have time and can afford the cost (which is as low as we could possibly make it). Maybe even to do just one on-line and interactive subject - my one :) - Foundations of Real World Economics.

torrens.edu.au/courses/busine… In which we discuss how much modern economics gets the philosophy of scientific enquiry seriously wrong, and

I think we have got it broadly right again. The forecast that central banks and most of the economics profession would follow the fashion and inadvisedly keep raising interest rates as though a demand-driven wage-price spiral was driving inflation rates up is proving correct. This is despite the lack of evidence that interest rates are an effective tool for managing inflation and the fact that the main impact of raising rates is to redistribute income from those with net financial liabilities to those with net financial assets, until something breaks.

Virtually everyone is misinterpreting what has happened in the UK. Both PM and ex-Chancellor have been so incompetent, it almost seems deliberate, but so has the Governor of the Bank of England. Nonetheless, the only genuine crisis they have directly caused has been political. There is no funding crisis and could never be, unless the Bank of England went seriously loopy and the PM could not command Parliament. There is no sterling crisis and it is hard to imagine one, given the UK does not have a fixed exchange rate to defend.

Medieval doctors more often than not made things worse by misdiagnosing sickness and prescribing harmful treatments. Modern policy makers are like medieval doctors. There is inflation driven by increases in the prices of necessities, for war, pandemic and climate related reasons. Real wages are falling, so not driven by labour shortages. Only indirect impact on discretionaries.

Two things everyone should know, but many economists regularly give the impression of having forgotten. I offer this thread as an antidote to the nonsense I heard on News Radio today where two media economists (one sharing my 1st name) were raising fears about ongoing deficits; and also to a recent publication by a well-known institute which seemed to imply that the Australian Commonwealth Government could run out of dollars. Getting these things wrong at the very least gives policy discussions the wrong focus,

The RBA until 1982 regularly bought government debt in the primary market.

Why did they stop doing this?

Because net government spending without primary market auctions floods the banks with reserves and undermines the target cash rate. I can't be bothered playing a game with the Grattan Institute, but if there is a dispute between the Government and the RBA then under the RBA Act, the government wins.

Have you ever heard of Ecological MMT (Modern Monetary Theory)? I suppose you could call it MMT informed Ecological Economics, but EMMT is a snappy acronym. If not, I would like that to change very soon. What has motivated this thread is a lecture I gave recently entitled Green Capitalism. Technically, I didn’t choose the title, but I agreed to it enthusiastically. But I think it was one of my worst lectures for a long time, and this has given me food for thought.

Chapter 15
Conclusion and Policy Options
Stephen J. Williams and Philip Lawn
Abstract This concluding chapter synthesises the information presented throughout the volume and restates the thesis from the introductory chapter: that humanity probably has a decade to fundamentally change its adversarial relationship with the planet – and each other – if disaster is to be avoided. Our current approach amounts to a ‘war on nature’ when ‘harmony with nature’ is required. To achieve this, the discipline of economics, especially,

Chapter 14
Paying for a Green New Deal:
An Introduction to Modern Monetary
Theory

Abstract

Modern monetary theory (MMT) is the brand name for a school of thought which has emerged since the year 2000 as the first serious challenge to orthodox macroeconomics in many years. Although the brand name dates back only
to the 1990s, the economics has long historical roots, going back more than a century. It is based on a detailed analysis of the mechanics of modern monetary systems, and a model of the economy as a set of inter-locking balance sheets

People think MMT is just a way to grow the economy faster. It isn't that. It is a technically correct description of monetary operations. It clarifies what the constraints are and what they are not. What is the link to ecological sustainability? Sustainability requires us first to have the infrastructure in place to allow it to happen. That means a secure and adequate quality of life for all, without fear of unemployment, and without excessive inequality.

Another take on a Job Guarantee. Moving to sustainability means shutting down some sectors of the economy, once alternatives are available or we have identified them as being unsustainable. While the green economy will absorb many workers, some people will fall through the cracks, and will not easily find jobs in the private or traditional public sector.

I just listed to ABC News Radio, where a former Treasury economist complained about ongoing fiscal deficits meaning Australia will be living beyond its means and arguing about the need for urgent budget repair. I can't believe these people can get away with this nonsense any more Australia IS living beyond its means, but these means are our share of our ecological planetary boundaries. We are well beyond those. But of course this is not what he was discussing, or he would advocate using fiscal policy to address ecological sustainability.

I can hardly claim to be well-informed about the US economy. I am finishing off a job as a teaching specialist at the Uni of Adelaide and planning new courses at Torrens, and the US isn’t a particular focus. But I do have some general thoughts about the inflation panic. Firstly, it is nice to see MMT has in some ways triumphed. It should be obvious to everyone now that it is the fiscal authority which has the power in terms of supporting, boosting and where necessary restraining total spending. Fiscal policy works.