Comments by "Neolithic Transit Revolution" (@neolithictransitrevolution427) on "ReasonTV"
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@willnitschke I would suggest that because YouTube is so difficult to communicate with, replacing an explanation with an assertion is particularly useless. I also have a minor in economics, I don't claim expertise, but implying I have no grasp is a weak character argument.
I don't endorse MMT and Kelson is a Hack. But the point around the dollar being a tax credit is a point I agree on. It's a Fiat currency, everyone knows this is a creation of the state. Your reply is equivalent to thinking that wheat isn't grown for food because a farmer could never eat it all themselves; people who don't pay taxes, whether domestic or international users, have a large population of working individuals who do need USD for taxes to trade with. It hardly matters why people think a currency has value, how many people think USD has value because "Petro dollar and US Navy"? No one is trading scarps of unbacked paper because it just feels right.
I agree that Fiat currencies compete with each other in part on the basis you are describing. The US dollar is more reliable than the Argentinian dollar undoubtedly. The issues around Argentina spending more than is taxed is widely understood and fits perfectly well within this framing, what good are tax credits when everyone has more than enough to pay taxes.
Look again at Canada. In the last decade both the $1000 bill and 1¢ penny have stopped being accepted by the government, neither remain in usage. Look at the French Franc or the German Mark or the Italian Lyra etc. None are accepted by their former government, and so none remain in circulation. Instead the Euro, accepted by all 3 governments, is the currency.
I don't understand why it's contentious to you that a Fiat currency, issued by a government, is primarily valued by its acceptance by that government. One can pay for another good with any other currency, or choose not to pay for a good or service. Taxes are required in set currencies, chiefly the national fiat but with exceptions - generally based around accepting USD - and must be paid. Inarguably a government can print currency. Surely you would agree a government that printed currency but refused to accept it would soon find that currency valueless. How is it you disagree then, that accepting a Fiat currency is what drives its value?
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@scottcincinnatikid9804 I think you really need to decide who the "proponents" are. I really suggest listening to Warren Mosler on YouTube. He actually debates Bob Murphy from this video. Bill Mitchell is also worth listening to. They are widely seen as the founders, and I tend to think they are speaking about the correct way the monetary system operates.
Then you have Stephanie Kelton here, who seems to actively misrepresent and represent in the most confusing terms possible MMT, and baits people who want certain policies into believing they can be gotten for free. While these people might say they support MMT, I don't believe they actually understand anything other than a vague idea of money creation.
While obviously many supporters of MMT do believe some degree of central planning is beneficial, I don't think it's correct to frame MMT in general as being any more supportive of Central Planning than a Central Bank and fiat currency inherently is.
The fact that radical elements might misrepresent something to justify spending they, as you point out, were going to justify regardless has no bearing on that initial thing's, here MMT's, validity.
But a correction; the Fed doesn't use interest to create reserves. Reserves are created through asset purchases. Interest recieved by the Fed goes to the treasury as general revenue, after subtracting operating expenses. If the balance is negative, the Treasury pays the difference.
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@scottcincinnatikid9804 I don't recall this coming up from either Bob or Warren, I may rewatch and get back to you, but I've seen Warren in several interviews and he's certainly not shy about the reality of government lending or implicitly suggesting the Fed buys all debt. I'd be surprised if Bob had left such an easy point I scored. Sorry if I'm digging something old up, I didn't see myself replying to when I was trying to figure out what the guy replying to me was referencing.
In my longer reply, I certainly agreed with the point Kelton isn't being genuine, but that wouldn't post.
I do have to say I think it's an entirely ideological point to suggest the government can only achieve a zero sum gain. You could suggest empirically it's rare, and we could debate the point. But I can point to a number of Governments, Norway, Singapore, Switzerland, who have very apparently grown wealth.
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@scottcincinnatikid9804 I don't have any strong objections to these points. And your third sentence is non-confrontational. The only thing somewhat nebulous is the fourth sentence, because MMT suggests (and not only MMT) that while the government while take after giving, the giving will create enough benefits it is still worth while.
I would say we shouldn't vote off Proverbs, and that the concept of MMT says we should vote for responsible financiers.
I guess my main disagreement, I should be clear it is not inherent, is "The borrowing happening now, even if held by the Fed, will require future debt servicing cost, meaning less". You'll never find a successful business afraid to borrow. While technically I agree, borrowing means repayment with interest, I don't agree that implies less.
We should expect our elected government to invest well enough that less is not the outcome. A failure in this is a failure in the democratic concept. I would never expect the public sector to invest better than the best of the private sector, but I do believe proper investment into infrastructure and a nation's comparative or strategic advantages leveraged at the relatively low borrowing rates nations face can be advantageous. Honestly, if someone ran on the idea of giving every citizen a savings account funded by national borrowing, where we could only keep the dividend payments, I'd have to think very seriously about what I thought of the lower end of society. The low cost of national borrowing is enticing.
"Government spending for the most part is just reclassification of who will consume". Even on this point, between tax and borrowing, I'm not sure tax is the better choice. Taxing means taking away from productive investment, borrowing means taking away from the least productive investments. Does the economy really grow better under an income tax that pays for education than borrowing now in the expectation those educated will grow the economy? I find it hard to square.
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@macsnafu The exchange function, and also that it is the unit of account. It is obvious that printing money doesn't create new wealth, but spending that money does lead to production of new wealth.
You say like any borrower, the government will have to repay it's loan. But I put forward that large financial institutions don't intend on repaying all their debt, which exist in the form of deposit, and actually aim to increase debt annually. Debt can be a very inexpensive way to access capital. I don't see why we wouldn't want to leverage government spending, with our main concern being growth in the tax base, or Debt to GDP.
If you're talking about a crowding out effect, that exists only to the extent interest rates are raised due to borrowing, which itself is a question of inflation. But I would suggest a low crowding out effect is less damaging than taxes in many cases. Taxes are indiscriminate and disincentivize working, interest rates of 3% mean that any investment returning 3% or less won't be made, which means only the least productive will be impacted.
In some cases government borrowing can certainly stimulate the economy. When people are afraid to invest they pull capital out of the market. Government debt can pull that back into circulation, and that spending could have a positive multiplier effect.
The Guaranteed Job scheme I would support is to have the Federal government fund a program that allows Charities and Municipalities to pay workers Minimum wage for 8 hours a day 5 hours a week, with a basic benefits package. That would keep these jobs from competing with the private market, and I think charities and municipalities are best suited to finding a variety of tasks for differing skills and doing it quickly. I would also extend it to Manufacturering companies for up to 6 months of training, with the requirement the company has to pay 50% of the cost back if the employee isn't working there in a year.
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@lukeasacher I agree, but would add that I support the usage of a Land Value tax, particularly at local/municipal levels, and would be alright with taxing bodies having their own fiat currency such that every city might have a local dollar, and likewise that companies (particularly those involved with retail) should be able to issue currency backed by the fact they accept it.
Similar to what we're seeing with points systems- I think it's more likely points systems take over the role of government money for 95% of transactions over any crypto coins. All you have to do is repeal the law on Company Script and Walmart could pay you in part in Walmart points, but it's worth it because you get a better price for groceries etc with the points. Tie in gift cards, denominated your points in dollars and cents. There are companies working on exchanges already.
Edit: to my Land Value tax point, I would note that in Atlas Shrugged, the Gulch is expressly said to be funded by the owner collecting ground rent, excluding what they built on the parcel, and used to fund the municipal and defensive functions. Implicitly she agrees that ground rent is the best source of funding a community. To which my only objection to her utopia is that while now the government and the bank split my income quite evenly, I do look forward to the future when it's only the government. And I don't think the form of society she puts forward thrives under a banker owning everyone's property.
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@willnitschke even if we supposed I agreed that growing national indeptiness was causative to decline in GDP growth, rather than a result as is obviously possible, you aren't disputing my claim of decreasing spending power per unit currency held, only saying that a nation's output is decreasing.
The second part is just kinda silly. The suggestion medical care, or Medicare/medicaid, spending doesn't add value to the economy is hard to comprehend. Likewise, the focus on interest payments without looking at what the loans paid for is difficult to take seriously; obviously the interest on my mortgage isn't an asset to me, but the house is. Military spending is a real mixed bag and I'm not going to defend every line item of an audit the department can't write up, but obviously some technological advances have been produced, and the question to some extent is what is the best cost for impact in a strategic sense, rather than expecting a direct return.
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@willnitschke The hyper inflation was the result of the economic crash with money printing. But you'll never find hyper inflation in a country where there is goods and food on store shelves, people don't start burning money until there is nothing left to buy.
MMT definitely understands there are consequences. Whether you can reasonably use taxes to influence inflation is a reasonable cointer point. I would agree that MMT is inherently stateist, I would suggest it's argument lies on the concept that Fiat money is inherently a statist tool/policy, and treating it like a commodity currency is the flawed approach.
That said I think there are automatic stabilizers, the form of economic policy usually put forward, that keeps the Federal government at a reasonable distance and avoids the disease that is a command economy.
i strongly suggest listening to Bob Murphy (the Austrian Economist interviewed here) debating Warren Mosler (the Founder, so to speak, of MMT). Stephanie Kelton is just awful, and constantly spends her time going on about the minutia of technical details and then seemingly implying absurd outcomes. Warren Mosler and Bill Mitchell are both much better. I'm not saying you'll Agree with it, but I'm fairly libertarian i listen to a lot of Reason debates, and while I thought I did, I didn't even understand MMT until listening Mosler.
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@willnitschke Stimulus policy also is a major component of MMT which is descended from Keynesian economics. I don't disagree that government ROIs in developed economies are generally low, but even a 90¢ return on a dollar in investment is pretty good, it implies you could borrow ~80% of the programs cost and the increased revenue would pay off the debt. Every debt does equal an asset. A debt means I owe someone something, for the other person that is an asset. MMT recognizes the difference between expenses and liabilities, you are mistaken. That isn't something you could really confuse.
The Five basic requirements for a field to be considered scientifically rigorous: clearly defined terminology, quantifiability, highly controlled experimental conditions, reproducibility and, finally, predictability and testability.
The Theory of Evolution, all but universally accepted as valid, is called a theory - and not considered proven - precisely because it cannot be rigorously tested. And evolution only attempts how things came to be, more akin to Economic History. Whereas economics has no rigorously proven basis, and claims to be predicative.
You are right national debt is not literally a commodity. The point being made was that the national debt has already been commodified, and is traded in a free market as a commodity would. I apologize if any other meaning was taken.
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@willnitschke Stimulus policy also is a major component of MMT which is descended from Keynesian economics. I don't disagree that government ROIs in developed economies are generally low, but even a 90¢ return on a dollar in investment is pretty good, it implies you could borrow ~80% of the programs cost and the increased revenue would pay off the debt. Every debt does equal an asset. A debt means I owe someone something, for the other person that is an asset. MMT recognizes the difference between expenses and liabilities, you are mistaken. That isn't something you could really confuse.
The Five basic requirements for a field to be considered scientifically rigorous: clearly defined terminology, quantifiability, highly controlled experimental conditions, reproducibility and, finally, predictability and testability.
The Theory of Evolution, all but universally accepted as valid, is called a theory - and not considered proven - precisely because it cannot be rigorously tested. And evolution only attempts how things came to be, more akin to Economic History. Whereas economics has no rigorously proven basis, and claims to be predicative.
You are right national debt is not literally a commodity. The point being made was that the national debt has already been commodified, and is traded in a free market as a commodity would. I apologize if any other meaning was taken.
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@willnitschke @willnitschke Stimulus policy also is a major component of MMT which is descended from Keynesian economics. I don't disagree that government ROIs in developed economies are generally low, but even a 90¢ return on a dollar in investment is pretty good, it implies you could borrow ~80% of the programs cost and the increased revenue would pay off the debt. Every debt does equal an asset. A debt means I owe someone something, for the other person that is an asset. MMT recognizes the difference between expenses and liabilities, you are mistaken. That isn't something you could really confuse.
The Five basic requirements for a field to be considered scientifically rigorous: clearly defined terminology, quantifiability, highly controlled experimental conditions, reproducibility and, finally, predictability and testability.
The Theory of Evolution, all but universally accepted as valid, is called a theory - and not considered proven - precisely because it cannot be rigorously tested. And evolution only attempts how things came to be, more akin to Economic History. Whereas economics has no rigorously proven basis, and claims to be predicative.
You are right national debt is not literally a commodity. The point being made was that the national debt has already been commodified, and is traded in a free market as a commodity would. I apologize if any other meaning was taken.
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@willnitschke Stimulus policy also is a major component of MMT which is descended from Keynesian economics. I don't disagree that government ROIs in developed economies are generally low, but even a 90¢ return on a dollar in investment is pretty good, it implies you could borrow ~80% of the programs cost and the increased revenue would pay off the debt. Every debt does equal an asset. A debt means I owe someone something, for the other person that is an asset. MMT recognizes the difference between expenses and liabilities, you are mistaken. That isn't something you could really confuse.
The Five basic requirements for a field to be considered scientifically rigorous: clearly defined terminology, quantifiability, highly controlled experimental conditions, reproducibility and, finally, predictability and testability.
The Theory of Evolution, all but universally accepted as valid, is called a theory - and not considered proven - precisely because it cannot be rigorously tested. And evolution only attempts how things came to be, more akin to Economic History. Whereas economics has no rigorously proven basis, and claims to be predicative.
You are right national debt is not literally a commodity. The point being made was that the national debt has already been commodified, and is traded in a free market as a commodity would. I apologize if any other meaning was taken.
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@willnitschke Stimulus policy also is a major component of MMT which is descended from Keynesian economics. I don't disagree that government ROIs in developed economies are generally low, but even a 90¢ return on a dollar in investment is pretty good, it implies you could borrow ~80% of the programs cost and the increased revenue would pay off the debt. Every debt does equal an asset. A debt means I owe someone something, for the other person that is an asset. MMT recognizes the difference between expenses and liabilities, you are mistaken. That isn't something you could really confuse.
The Five basic requirements for a field to be considered scientifically rigorous: clearly defined terminology, quantifiability, highly controlled experimental conditions, reproducibility and, finally, predictability and testability.
The Theory of Evolution, all but universally accepted as valid, is called a theory - and not considered proven - precisely because it cannot be rigorously tested. And evolution only attempts how things came to be, more akin to Economic History. Whereas economics has no rigorously proven basis, and claims to be predicative.
You are right national debt is not literally a commodity. The point being made was that the national debt has already been commodified, and is traded in a free market as a commodity would. I apologize if any other meaning was taken.
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Frankly speaking, in all likelihood yes, they can. Employment in Construction seems to vary most much more than average with recessions. Many recessions are primarily a result of a building collapse, 2007, Savings and Loans Crisis, the Great Depression, etc.
But more to the point, you are correct that not every unemployment individual will end up working in construction. But I do support the concept of a Guaranteed Employment scheme. I would suggest keeping the federal government, which responds slowly and bluntly, largely out of the operation. Instead I would have a federally funded program wherein Municipal governments and Charities can pay people minimum wage for 8 hours a day 5 days a week. I would also open it up to Manufacturing companies to cover up to 6 months of training, although half the cost would have to be repaid if the trainee wasn't employed there a year later. Smaller and generally financially strained entities will react much more quickly and efficiently to the available labour pool. They aren't stealing jobs from the private sector because of the limits on hours available and wage. But it would keep employment up in a recession while getting things done.
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@johncronin6977 I agree with having industrial policy. I disagree that tariffs alone are a good economic policy. I can give counter examples, Brazil, South Africa, where all tariffs have done is prop up garbage companies and forced people to buy overly expensive junk.
If you want tariffs to protect industry, they need to be part of a comprehensive plan that ensures quality, investment, and ongoing development. And frankly, you need a lot of government control in the economy for this to work.
Also, most of your examples, the country is focusing it's Policy on some new sector of the economy where it can create a clear advantage, not trying to compete in established industries.
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@johncronin6977 I agree that national policy can create competitive advantage. However, it often comes at the expense of other areas of the economy.
And it has to be said, Japan and South Korea may have the worst demographics in the world, definitely if you exclude formerly command Soviet economies, and while they did a wonderful job creating industries, it's questionable how well that has turned out for the actual people.
Americans want manufacturing back so they can have 3 kids a dog and a white pick dense around a suburban house. I don't know if that's realistic, but it's certainly not the economic outcome for Japan or South Korea.
That said, I'm pretty pro government support for Energy Infrastructure, I don't think you can really screw up subsidies that make energy cheap, and logistical infrastructure, both public rapid transit and national transportation infrastructure. And I would support Manufacturing capital subsidies (in fact it's something Biden did well) and wage subsidies (particularly paying half of wages for training employees, so long as the employee remains with the company for ~5 years).
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I guess my point is it's less of a "tool" and more of a "drillbit", and without a drill, it's just something to hurt yourself with when you stick your hand in. And I haven't seen much talk about the drill itself, just a lot of praise of drillbits.
I agree policy can create competitive advantage. But I'd hazard that it often comes at the expense of other areas of the economy. South Korea and Japan have just about the worst demographics of any country that wasn't Soviet. There are strategic reasons to want manufacturing, but I'd wager most Americans want the good middle class jobs that support a family - and that doesn't exactly align with the multigenerational no child houses in your examples.
That said, I also support industrial policy. And tariffs are a part of that. I think government backing, or even nationalization, of resource sectors, energy, and transportation can all be very valuable (and frankly hard to screw up unless you create some monolithic monopoly). And in terms of manufacturing, I would love to see Capital investment incentives (which Biden actually did quite well), wage subsidies (particularly training tax credits that pay out over several years so long as the employee stays employees), research hubs for industry (to get rid of R&D tax credits which are useless and increase industry information sharing), and planned industrial parts with centralized power/heat provision and a clear goal for interconnected users. And I think Capital gains taxes should be time sliding, so that the tax rate starts at 100%, but over 20 years falls to 0%, to encourage long term investment..
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