Tag Archives: public debt

Too little public debt can be as damaging economically as to much public debt, since public debt is the one-to-one measure of deficit spending, and public spending increase flows, both financial and economic, in the economy. On the other hand, MMT shows that issuance of public debt is unnecessary for funding governments that are currency sovereigns and suggests that interest payments on public debt constitute a subsidy to bond holders.  Thus, the need arise to justify the continued...

Overt money financing.Open DemocracyWhy the public debt should be treated as an asset John Weeks | Professor Emeritus, School of Oriental & African Studies, University of London, and author of 'Economics of the 1%: How mainstream economics serves the rich, obscures reality and distorts policy', Anthem Press

The media has been giving a lot of attention in the last week to the 10-year anniversary of the Lehman Brothers crash which occurred on September 15, 2008 and marked the realisation, after months of denial, that there was a financial crisis underway. Lots of articles have been published recently about what we have learned from this historical episode. I thought that the Rolling Stone article by Matt Taibbi (September 13, 2018) – Ten Years After the Crash, We’ve Learned Nothing – pretty much...

Funny. Trump gets some of the basics of MMT, which the article mentions. Gary Cohn, not so much.Business InsiderBob Woodward book: Gary Cohn was 'astounded at Trump's lack of basic understanding' about the federal debt Bob Bryan

On August 1, 2018, the 10-year Japanese government bond yield, shot through the roof (albeit a very low one). Yields shifted from 0.05 per cent on July 31 to 0.129 on August 1, which was the largest one-day rise since July 29, 2016 (when the yield rose 0.101 per cent). The Financial Times article (August 1, 2018) – Japanese bond market jolted as traders test BoJ resolve – wrote that “traders wasted no time in testing the Bank of Japan’s resolve to loosen its target range for the debt...

Backgrounder on Greece (and the IMF and Eurocrats). A sad tale of elite rule and rent extraction off the back of ordinary workers with no power or influence — unless they rise up angry and are willing to pursue it.Michael Roberts BlogGreece: on paroleMichael Roberts

The relentless flattening of the Treasury yield curve has been a topic of ongoing debate -- is this a signal that a recession is near? The key to interpreting the flattening is that bond market participants are not paid to to anticipate economic outcomes (outside the corner case of the inflation-linked market), rather to anticipate the path of short-term rates (and the term premium). The flattening yield curve tells us that market participants (on average) believe that we are near the end...

In examining the implications for an exit from a currency union, one of the issues that arises is the proportion of public debt that is issued under foreign law. This is a separate issue to the implications of foreign-currency denominated debt. Both issues are problematic and compromise a government’s capacity to remain solvent. I covered the former issue to some extent in my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – when I was considering different strategies...

Although mainstream economics prides itself on being highly precise and mathematical, this is not apparent when looking at the discussion of fiscal policy. It is very easy to find appeals to intergenerational fairness when discussing fiscal policy. Such a term is essentially meaningless in technical terms; it is mainly used as a ploy to evoke images of doe-eyed grandchildren being robbed by nefarious politicians. This article explains why the concept is largely worthless as an analytical...

MMT alert.Could be better, but not bad. The WeekThe national debt, explained The Week Staff