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Randy Wray — How To Pay For The War

Summary:
Remarks by L. Randall Wray at “The Treaty of Versailles at 100: The Consequences of the Peace”, a conference at the Levy Economics Institute, Bard College, May 3, 2019. I’m going to talk about war, not peace, in relation to our work on the Green New Deal—which I argue is the big MEOW—moral equivalent of war—and how we are going to pay for it. So I’m going to focus on Keynes’s 1940 book— How To Pay for the War—the war that followed the Economic Consequences of the Peace.Our analysis (and the MMT approach in general) is in line with JM Keynes’s approach. Keynes rightly believed that war planning is not a financial challenge, but a real resource problem.... Excellent post — with a qualifier.Economists are not qualified to material systems scientists. The latter alone can determine the real

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Remarks by L. Randall Wray at “The Treaty of Versailles at 100: The Consequences of the Peace”, a conference at the Levy Economics Institute, Bard College, May 3, 2019.
I’m going to talk about war, not peace, in relation to our work on the Green New Deal—which I argue is the big MEOW—moral equivalent of war—and how we are going to pay for it. So I’m going to focus on Keynes’s 1940 book— How To Pay for the War—the war that followed the Economic Consequences of the Peace.

Our analysis (and the MMT approach in general) is in line with JM Keynes’s approach. Keynes rightly believed that war planning is not a financial challenge, but a real resource problem....
Excellent post — with a qualifier.

Economists are not qualified to material systems scientists. The latter alone can determine the real requirements for vast undertakings such as war and now a response to climate change that will involve restructuring energy use and energy resources.

History shows that after wars the situation returns to "normal," at least for some. However, there is no good reason to expect that the current environmental crisis will play out that way. Nothing like this has happened on such a vast scale in human history.

Randy says he is optimistic about this. Other say they are not.

As far as I can tell, the material systems folks are not, at least for the most part. Moreover, climate change is not just a domestic issue but an international one and the solution, to the degree that one is available, must be international. If it is not, it militaries warn that it likely to become a causal factor in rising conflict.

Of course, Randy is correct about affordability being a canard. The actual issue is availability of real resource and the knowledge and skill to deploy them at scale — and the scale is global. A daunting challenge.

Humanity needs to get busy on this and that won't happen until the crisis develops to the critical point. That may occur only after the tipping point was passed, as it turns out in hindsight for those to look back and reflect on history.

Randy's forecast may be a bit rosy.

In another important contribution—Economic Possibilities for our Grandchildren— written in 1930, Keynes speculated about our future– a time when “for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”
By Keynes’s timeline, this should have been reached by 2030. We’ve timed our GND to be completed by 2030. We have 10 years to make Keynes’s vision become reality. The alternative is annihilation.
My view is that the US is facing political turmoil until at least after the 2032 general election as an "interregnum" (A. Gramsci) during which a realignment unfolds. It is as yet very uncertain what the future will look like and what political forces will prevail. It is by no means a foregone conclusion that the the outcome will be positive for either the US or the world. It looks to me like there may be a major culling in store.

New Economic Perspectives
HOW TO PAY FOR THE WAR
L. Randall Wray | Professor of Economics, Bard College


Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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