by Summary:
This workshop uses Minsky to show the structure of a mixed fiat-credit economy, and easily dispels numerous myths about money.
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
This workshop uses Minsky to show the structure of a mixed fiat-credit economy, and easily dispels numerous myths about money.
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
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| This workshop uses Minsky to show the structure of a mixed fiat-credit economy, and easily dispels numerous myths about money. |
👆 – NЕW А DАТING FОR АLL ТАSТЕS & АGЕS 😍💋x✅
thanks Steve, finally a video bringing together the MMT information onto a single screen. i look forward to your next video !
Steve Keen has lost his way in a Minsky Maze, so called theory STAB vs. reality TABS. My objection to Keen’s position starts with his misuse of the English language. The oxymoron “Government spending creates money” which supports the fallacious MMT STAB belief(government must spend before taxing and borrowing can occur) . In reality, taxing and borrowing precede government spending (TABS) and are supported by actual data from the government along with affirmations from officials and documentation from the Treasury, the people that actually manage the government’s cash balance.
Keen ignores the time lags between tax collection, other revenue, and securities issues
from the federal government to cover the shortfalls for government expenditure. Creates
a model where everything happens simultaneously then makes erroneous assumptions
based on his false modelling. This belief originates with the fallacious MMT STAB
hypothesis. Keen makes the same mistake as Kelton does in her 1998 working paper
244 Can Taxes and Bonds Finance Government Spending. By simultaneously viewing
government spending with money creation, tax collection, and other revenue one can
put the horse before the cart. However, both are aware of the time lags where Kelton
simply ignores it when trying to sell the STAB hypothesis and Keen says the time lags
don’t matter. How can Keen say that as he is making a time sensitive statement like
“Government spending creates money” (implying government spending instantly
creates money) is beyond me. Keen uses more verbal gymnastics to sell STAB, e.g.
“And it is the actual act of the deficit”, the deficit is the projected shortfall in funding for
government expenditure followed by security issues which cover that shortfall. I suspect
Keen may have other motivation that keeps him parroting the STAB narrative, which I
won’t get into here.
Anyone who adopts the fallacious MMT STAB belief cannot be taken seriously when
discussing government financing.
@Progressive Money Canada As I expected. I'll continue ignoring you then.
@ProfSteveKeen Well, you can ignore me, but you can't ignore the argument. Parroting MMT talking points, I never thought you would be reduced to this level of acumen.
@Progressive Money Canada Parroting? Jeff, you are a turd. I've found some of the MMT personalities hard enough to deal with, but you reach a whole new level of obnoxiousness. The Minsky models I've done here and in my critique of you were MY work and mine alone. You don't seem to be able to cope with the fact that someone can think (or in my case, know) that you're wrong, without thinking that they must be driven by some nefarious motivation, or mere sycophants of others.
I'm done talking with, and listening to, you. Further correspondence here and I'll happily block you from this channel.
@ProfSteveKeen Showing your true colours, when bereft of an argument resort to ad hominem attacks, and a stupid one at that, really weak Steve. After you block me as you did on Twitter the argument will remain and any open minded critically thinking person can easily see the flaws in your support of STAB, under the influence of MMTers or not, Parrot.
@Progressive Money Canada You are such a jerk.
This was a fascinating workshop. Thanks for going slow. This was my favourite line in the video on government spending – "you simply can't borrow your own notes from the people you haven't spent it on yet so the initial creation has to come from the government side." But isn't there an exception? You explain clearly at the beginning how banks create money. As I understand it, that bank money is not central bank money, but is backed by the central bank. So when people borrow from their private bank, they are borrowing bank money. If the government sells its bonds to banks, isn't it borrowing bank money too? Isn't the quote I liked true only when the government sells its bonds directly to its agent, the central bank? …. Thanks in advance for clarifying.
Oh banks create money, definitely. But it is not "backed" by the Central Bank, in the sense that the asset on the bank's ledger that backs credit money is Loans, not Reserves.
The analogy I used re government bond sales–and I'll explain this in a later workshop in this series, where I turn this into a working model–is that the government gives banks (say) $1 million a month, but says you can't spend this since you;'re holding it in trust for other people (their depositors, who CAN spend the deficit-created money in their accounts any way they like). But then it says "however, you can buy $1 billion worth of bonds off us, which we'll pay 3% interest on–interested?". Of course the banks accept the offer. But have they "lent" the government money? No, they have simply taken advantage of a government offer to swap a non-income-earning asset for an income-earning one.
Great questions Joe! Interested in the Prof's response.
@ProfSteveKeen Thanks. Perhaps I will understand better after the next workshop.
Professor, can you clarify the nature of the "non-interest bearing asset" being swapped by the bank for the government bond? Is the bank not exchanging a liability (bankmoney credit) for the government bond asset?
@Bill Clancey Sure. Reserves, a bank asset (more strictly, the sum of all the bank + primary dealer accounts at the central bank) go down, value of Bonds held goes up by the same amount. So it's swapping one asset for another. Reserves used not earn interest, now they do, but a lower rate than given on bonds.
I am not sure down to earth questions are in context. Why are interest payments on Bonds ‘Interest_B^{NB} to deposits coming from reserves and not from equity? The reserves are the liability from the central Bank. Since when are private depositors getting central Bank money?
They are not coming "from" Reserves: they are credited TO Reserves, from the Treasury's account at the Central Bank. And private depositors are getting Treasury-created money, not Central-Bank created money. Perhaps you should check out the Minsky model to see this: I've attached it to my Patreon post https://www.patreon.com/posts/73984307