Tag Archives: MMT

Bill Mitchell sketches his views on international speculative capital movements here:“… I do not think that the imposition of country-by-country capital controls is the best way to eliminate the destructive macroeconomic impacts of rapid inflows or withdrawals of financial capital.If we consider that the only productive role of the financial markets is to advance the social welfare of the citizens – that is, advancing public purpose – then it is likely that a whole range of financial...

By Thornton “Tip” Parker As NEP readers know, the economy consists of  private, government, and foreign sectors.  Financial flows among the sectors always add up to zero; that is, one sector’s deficits must be offset by surpluses in either or both of the others. If the private sector imports more than it exports, ignoring investment flows, it will run a financial deficit while the foreign sector runs a surplus and the economy will then slow down as money in the private sector becomes...

By J.D. Alt Recent news reports lament the on-going collapse of America’s coal industry―specifically the spectacular loss of jobs which is devastating not only families but entire local economies and communities. On a PBS news report, a woman who’d worked for a local mining company for thirty years teared up and asked the reporter, “What in the world am I going to do?” At a recent event sponsored by Wyoming Public Radio, attendees were asked to fill out 5X7 cards with suggestions about how...

By J.D. Alt I spent the last couple days reading and contemplating “Political Aspects of Full Employment”, the transcript of a lecture―given in 1942!!―to the Marshall Society by economist Michal Kalecki. This was recommended to me by Nat Uerlich in his May 2 comment to my post “False Choice or Real Possibilities.” Many thanks to Mr. Uerlich for taking the time to make the comment. I urgently recommend Professor Kalecki’s lecture to anyone who feels a little fuzzy (as I have lately been...

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William K. Black February 29, 2016     Brooklyn, N.Y. A blogger has trolled all heterodox economists as believers in the “occult.”  More precisely, he is upset about “econ people” (who are likely not economists) and who tweet him or post comments on his blog site.  The blogger further complains that these commenters say that they believe in heterodox economics and “new methodologies [that] are poised to topple mainstream economics.”  He then goes on to say:  “My typical response is to ask...

The Modern Monetary Theory (MMT) idea – or at least the idea shared by some supporters of MMT online – that imports are only ever a benefit and MMT is a viable policy for all nations are badly mistaken ideas.Now MMT would work for the US, Western Europe, Australia, Japan, South Korea or Taiwan, but not for much of the Third World.That is, MMT-style policies are best suited for advanced capitalist nations, not necessarily for Third World countries, because most of them face severe balance of...

By J.D. ALT Classically, we imagine money being aggregated by an entrepreneur who uses it to build a factory, purchase raw materials, hire labor, and begin manufacturing widgets which are then sold in the marketplace. This same result could be had by the process of an ogre appropriating a factory by intimidation, acquiring raw materials by force, and using slave labor to produce the widgets. The difference is that, in the first case, the process produces customers (the laborers) who can...

By L. Randall Wray In Part Three I argued that the government issues currency as its liability and imposes tax liabilities on its subjects/citizens that can be paid in that currency. When taxes are paid, both the government and its taxpayers are “redeemed”. I cited Innes’s argument that the universal law of credit is that the issuer of a debt must take it back. This is the fundamental notion behind redemption of debts. To be sure, debt is much older than money. No human has ever...

Sorry that it has taken me a while to get back to my multi-part series on debt-free money. This is the third part of the current series, although I had previously written several other blogs on the related topics of debt-free money, positive money, and 100% money. See links at the bottom. This post will focus on the concept of “redemption” as the most fundamental requirement of indebtedness. This seems to confuse readers. For example, Eric Lonergan calls this a “fantastic linguistic...