Everything You Want to Know About Modern Monetary Theory

Jul.26 -- Bard College Economics Professor L. Randall Wray explains the controversial idea that’s gaining acceptance with Bloomberg's Cristina Lindblad and Peter Coy.

[hamzah.]

good luck telling Politician to stop SPending when they hit the resource limits

[RaptureReady]

The two journalists are like “ why don’t you explain that concept further., , I’m asking for a friend “ 😂

[mswindoc]

I wish the minimum wage was valued at what my father made when he worked for minimum wage in the 60's...$1.25 an hour. Today his lifestyle / expense ledger would require that number to be $35 an hour! 😶

[Rob-fxdw]

Full employment is NOT resource availability. - Only a simpleton would think that since it ignores all the needs of an industrialized economy which includes long term skills, natural resources, development times that industries need to increase production, relocation and logistical requirements of natural resources and relocation costs of labor as well as a thousand of other needs like relative marginal costs of increased production.

[PhilCallis]

The slow inflation of MMT is essentially an invisible tax on the lower middle class

[MarkMark-jits]

LOL the government should be "constrained" by a budget. As Alan Greedscam said the US government can meet all it's obligations pensions and other payments it can't guarantee their value.

[footube]

Randall Wray's opening statement is immediately false because he smuggles the word 'money' in right at the very end, when it has no place being. Money is only money if it can be used to store value over time and space. If we can't trust that some currency will be worth roughly the same in a year's time then it's not a good 'store of value', and if we can't trust that it will be worth roughly the same in a week's time then it's not even a good 'medium of exchange', and therefore ceases to be money at all.

To better understand Randall's opening statement, I recommend replacing the word 'money' with the phrase 'printed pieces of paper', giving us:

"A sovereign government that issues it's own currency is actually nothing like a household or firm, even though we hear this analogy all the time. If a government issues its own currency, and imposes tax liabilities or other kinds of liabilities in that currency, and spends only in its own currency, and issues debt only in its own currency, then it can basically never run out of printed pieces of paper."

Ahhh, that's better! 😌

[jznemovitosti]

I have a few questions.
If a company printed its own currency (aka stocks) and adopted this strategy. And also adopted a policy that it never fires anyone and also it hires every employee´s childrenn no matter the skill. Also it will buy/rent new equipment and places so they can give everyone jobs as promised. Wouldn´t it make the most productive employees to leave this company or the company to be outperformed by the competition?

What would be happening with the value of this company´s stocks relative to some other company´s stocks which hires, buys and keeps only employees and equipment it needs?

If the answer is as I expect that the value will go down. Than that means that the cost of everything the first company buys from other companies wil skyrocket deosn´t it?

[pouriamaleki]

Basic economics is based on Demand and supply. Same applies to the currency. The more you print, the less valuable it becomes. Of course you can always pay of your debt by printing more, but you are devaluating your currency and purchasing power consequently causing inflation. So in order to fight that inflationary pressure, the government either raise taxes or increase interest rates. If they increase the interest rates, then it would make it harder for the gov to pay it off. And if you increase the taxes, the people will be having less money in their pockets which means they are slave to the government debts.

[missj.]

How does it work in a globalized world and many different currencies? What happened if people stop having trust in the currency / ability of the government to pay? Would the economic decline of oil (petrodollars) and of United States as the world economic superpower change anything to that theory?

[soulfuzz]

“We really have to worry about inflation”
the problem is there are incentives for politicians to ignore this. (we don’t trust you)

[jones]

It's irritating when conversations which include Venezuela as a 'warning do not enter' sign, don't even mention the damaging impact of the most powerful nation in world history putting it's thumb on the scale in favor of her demise (sanctions, attempted and threatened coups, etc). It's like talking about Cuba's flaws, while leaving out the nearly 60 year campaign by the U.S. to destroy her.
Yes, these places have their internal problems (name one nation that doesn't), but don't pretend that our behavior toward them is irrelevant. It insults peoples intelligence.
As for the jobs guarantee program (44:09) ; as Randall describes it, we already have one. It's called the U.S. Military. Guaranteed, 3 hots and a cot, with very good jobs training that translates well to 'the civilian sector'. The major difference being rather than an end goal of destroying infrastructure, we build some, which is much needed (GND for example).

[jhfmackay]

Imagine thinking the governments could allocate unlimited capital efficiently and not have it be completely corrupt

[randoroo]

Watching this interview of Professor Wray I'm reminded of the quote by Hayek: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account." Hopefully Professor Wray humbles himself to that possibility in time. But with how confidently he asserts that only he and a select group of other people actually understand how money works, I imagine that humility for him will remain elusive.

[bargdaffy]

MMT is not actually a "theory" it is an explanation of how a fiat currency based economy works and its interactions with the governments that create the fiat currency.

[Broitman]

Trying to learn about MMT and found this now. Somewhat didn’t age so well with the comments about inflation and how developed countries can’t cause it. We now have it.

How do you think about that?

[Andre_XX]

In science (as opposed to colloquial usage) "Theory" means an idea that has been verified by empirical evidence over and over despite every attempt to refute it. Where is the direct empirical evidence supporting MMT? By refutation, wasn't the Soviet Union also an MMT country with guaranteed employment?

[gerbs]

Everything you need to know about MMT: It’s a speed-lane on the road to serfdom. The end.

[hrmIwonder]

I remember I was in high school, sitting in business class, and I thought to myself, "If someone has to spend a dollar for me to earn a dollar, how can we all 'make money' simultaneously?" Of course the business teacher had no clue. Fast forward about 15 years I read about MMT and the sectoral balances, it was immediately and intuitively clear, yet very few people understand the sectoral balances. Why is it so hard for most? What piece of information or understanding did I have at 17 that people are missing? About 8 or 9 more years later, I still haven't figured out what that missing info is...

[Fredbruckman]

What are the jobs they are going to "guarantee"? This is not wartime!