THE (MMT) APPRENTICE

 

Beardsley Ruml, the guy that wrote ‘Taxes For Revenue Are Obsolete’ in 1946 which is quoted by every single ‘prescription’ MMT ‘academic’ from Pavlina Tcherneva to Bill Mitchell, also said this: “The corporation income tax must go, taxes on corporation profits have three principal consequences and all of them are bad.” As chairman of the Federal Reserve in New York, Mr. Ruml insisted that the case for ending the corporate tax was overwhelming. “It is evil…it should be abolished,” he also said.

Which begs the question: Why don’t the same MMT ‘scholars’ that love to quote Beardsley Ruml, ever mention that, or ever give the current administration any credit for dropping the corporate tax rate to 21% from 35% which Beardsley Ruml would have approved of (?)

Why don’t MMTers that want a reduction of payroll taxes for the working class, ever give the current administration any credit for the Tax Cuts and Jobs Act that lowered individual income tax rates (?)

Why don’t MMTers that want to raise the standard deduction, ever give the current administration any credit for doubling the standard deduction to 24K for a household (?)

Why don’t MMTers that want to address wealth inequality, ever give the current administration any credit for pinching the rich with a 10K cap on State and Local Tax (SALT) deductions (?)

Why don’t MMTers that want the federal gov’t to deficit spend more, ever give the current administration any credit for substantially growing the deficits now projected to top $1 trillion by 2020 (?)

Why don’t MMTers that know that we won’t default because we can always print the money, who gave then-candidate Trump credit for saying “We won’t default because we can always print the money”, then turn against any MMTer who suggested we call him an ‘MMT candidate'(?)

Why were most MMTers saying that we should have the federal gov’t spend $500B creating non-competitive ‘jobs’ in a Job Guarantee (JG) program, right now, in a labor skills shortage, during The Longest Private Sector Jobs Growth In US History, with record-breaking-low unemployment rates, the lowest jobless claims in 50 years, or in other words, IN THE HEALTHIEST JOBS MARKET IN DECADES (?)

Why do these MMTers prefer that the unemployed become permanent* sharecroppers on a modern-day plantation (a soviet-style Job Gulag which is a UBI with a forced-work requirement) instead of as potential shareholders on a capitalist launchpad (?)

(NOTE: *Dr. Bill Mitchell actually said, quote, “Even if that person stays in that Job Guarantee position forever and no private employer would ever take them on…Huge success”, unquote.)

Why didn’t these same MMTers not give the current administration any credit after—in a major advance for the MMT cause—federal policymakers got the debt ceiling suspended (meaning NO DEBT CEILING) for the SECOND time (?)

Why didn’t these same MMTers (who want the Fed to keep overnight rates at 0%) not give the current administration any credit when calling for the Fed to cut rates (?)

Why didn’t these same MMTers (who want student loan debt forgiveness) not give the current administration any credit when President Trump signed a memorandum that ensures ALL permanently disabled veterans—the roughly 25,000 veterans who qualified to have their student loans discharged but never received the benefit—obtain that hard-earned benefit (?)

Why didn’t these same MMTers not give the current administration any credit after a White House executive order calling for a federal JOBS TRAINING program, or more specifically, a ‘Training for the Jobs of Tomorrow’ initiative to tackle the challenges posed to the workforce (?)

Why didn’t these same MMTers (who want to help that ‘buffer stock of the unemployed’) not give the current administration any credit when 23 companies and associations signed a pledge at the White House on July 19, 2018 committing to expand apprenticeships, to train, re-train and ‘up-skill’ more than 3.8 million American students and current workers for new jobs and rewarding careers (?)

Why didn’t these same MMTers not give the current administration any credit after the Perkins Career and Technical Education Act, providing more than $1 billion each year to states for vocational and career-focused education programs, tailored toward secondary and post-secondary students, that will help employers fill the high-skill jobs of tomorrow, was signed into law on July 31, 2018 (?)

Last but not least, in many years prior to the Great Recession (the greatest recession since the Great Depression), massive US trade deficits—that were higher than US budget deficits—resulted in ALL of the federal gov’t ‘red ink’ going to the foreign sector (resulted in foreign sector’s ‘black ink’ and private sector’s ‘red ink’). In effect, if you take a step back from that picture, from the perspective of the US nonfederal gov’t domestic sector, those years (1996, 1997, 2002, 2003, 2004, 2005, 2006, 2007, 2008—SEE 77DIM#2) had the SAME debilitating consequences for US households as if the federal gov’t, by proxy, ran sustained budget surpluses—just like the US federal gov’t did right before all six depressions in US history. In other words, the ‘users’ of dollars were essentially forced to rely on borrowing (like using their homes as ATMs) to sustain spending—which always ends badly for ‘users’ because that’s the deficit spending that’s unsustainable. Why didn’t MMTers—who love to wave that ‘Sectoral Balances’ chart around—commend President Trump when he started the ‘trade war’ to lower trade deficits (?)

The answer is……because mommy picked the wrong cereal brand on November 9, 2016, they’ve since ignored the Facts, Math & Data and have become #FAKEMMTERS (!)

“In a strange way, socialists have President Donald Trump to thank for their upswing: The vast majority of the Philly DSA’s new members didn’t sign up in the midst of the Bernie Sanders campaign, but joined instead in the wake of Trump’s election. ‘There were a lot of what we call the November 9th babies’, said social worker Brittany Griebling.”—Holly Otterbein, ‘The Kids Are All Red’, 11/18/17

Fake ‘prescription’ MMTers have been promoting their political ideologies with empty promises of guaranteed ‘jobs’ and more free ‘ponies’ (in exchange for votes) under the guise of promoting pure MMT (under the guise of ‘economics’). Each and every day, it is getting more obvious that, unlike the current (MMT) administration, these political MMTers are now only interested in pandering to problems (pandering to their choirs) instead of actually solving problems (instead of actually helping them).

The permanent Job Guarantee proposal (a hijacked version of Mr. Mosler’s 2010 7DIF ‘Transitional JG’ proposal) was yet another Big Lie from today’s #FAKEMMTers who are desperately trying to fool us into thinking that we have a jobs shortage problem (that we need the gov’t to create jobs)…

The biggest lie was that their JG solved an actual problem (like Mr. Mosler’s JG that would have solved an actual jobs shortage problem which we had in 2010). MMT academic ‘scholars’ (who apparently forgot that they received degrees in economics, not politics) lie to you about ‘tens of millions’ of ‘involuntary unemployed’; or that ‘taxes don’t fund spending’; or that there is ‘no such thing as federal taxpayers’; or there is ‘no such thing as tax dollars on the federal level’; or push their nonsensical conspiracy theory that the Fed (and the Congress that the Fed is instructed by) are ‘intentionally targeting unemployment’. Just like those ‘lying’ ‘evil’ ‘neo-liberal’ ‘murderers-by-proxy’ that ‘prescription’ MMTers like to point their fingers at, these fake MMTers constantly take advantage of their financially-ignorant choirs…

The Big Lie is that, with their ‘JG’, you will be happy, doing an assigned ‘job’, getting a ‘guaranteed’ income, and PRESTO, all of your problems would be solved; PLUS, not to worry, all will be well everywhere, because a ‘buffer stock of employed’ gets our economy to ‘full employment’. However, the reality would be, while these fake MMTers are putting ‘full employment’ lipstick on an unemployment pig, rolling in garbage inflation; YOU, while inside THEIR Job Gulag, are becoming a sharecropper, toiling away on a modern gov’t job plantation, scraping gum off sidewalks, watching the world go by, even faster than ever before (meaning you become more dependent, faster than ever before, on the future empty promises of fake MMTers)…

The chance that you will be happily employed into a ‘guaranteed’ job is about the same chance that the gov’t (or any other organization) can ‘guarantee’ that you will get into heaven. There’s an old saying, ‘God helps those who help themselves’. I’m not just talking about America’s unemployed (or underemployed) helping themselves. I’m also talking about America’s employers getting to help themselves as well, with a gov’t initiative grounded in economic needs, like matching those 7M unemployed folks with those 7M unfilled job openings (designed to get results)—and not one grounded in politics (designed to get votes)

The ‘fake’ Job Guarantee was Dead On Arrival because we don’t have a jobs shortage problem like we did in 2010. The JG is product marketing, not economics. Today, the economic facts, data and math clearly show that we instead have a job SKILLS shortage, or more specifically, a jobs SKILLS mismatch between the employer and the potential employee. The JG was DOA because it didn’t sound like this:

In July 2018, President Trump signed an executive order to prioritize and expand workforce development so that we can create and fill American jobs with American workers (or in other words, a White House initiative for a federal JOBS TRAINING program, or more specifically, ‘Training for the Jobs of Tomorrow’ to tackle the challenges technology poses to the workforce).

“One of those causes of stagnant wages is stagnation of educational achievement (the leveling out of educational attainment). When US educational attainment was rising, technology was coming in, which needed more worker skills and people were getting them. So you had productivity rising, you had incomes rising and you had inequality declining. US educational attainment flattened out in the 1970s, while everywhere else in the world it has been going up. The only way for real incomes to go up over a longer period of time is through higher productivity. Higher productivity is in part a function of higher education, better skills and increased aptitude of the workforce.”—Chairman Jerome H. Powell, 07/17/18, Semiannual Monetary Policy Report to the Congress before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.

“Nearly 1 in 5 working Americans has a job that didn’t exist in 1980. Such rapid change is one reason 6.6 million U.S. jobs are currently unfilled. Many of these jobs require skills training, not a college degree. Yet for too long, both the public and the private sectors have failed to develop innovative and effective training programs.”— Ivanka Trump, 07/18/18, Advisor to the President, in a Wall Street Journal op-ed.

“To continue this economic miracle, we must invest in job training and vocational education. The task is to develop a strategy to equip workers at all stages of their career with the skills they need to thrive in the modern economy. Whether it is a high school student looking to land their first job or a late-career worker who wants to learn a new trade, we want every American having the chance to earn a living with a great job THAT THEY LOVE DOING. We have been asking businesses across the nation to sign our new pledge to America’s workers. Today 23 companies and associations are pledging to expand apprenticeships (I can’t get away from that word ‘apprentice’, it’s a great word) for on-the-job training and vocational education. They signed the pledge committing to train, re-train and upskill more than 3.8 million American students and current workers for new jobs and rewarding careers. This is only Day 1. In the days and months ahead, we hope that hundreds of businesses will join us in this effort. I want to thank all the companies who are about to sign the pledge. I applaud your civic leadership.”—President Trump, 07/19/18, before signing an Executive Order that establishes the National Council for the American Worker, which includes top administration officials and industry leaders tasked with developing a national strategy to address workforce development and to help expand the number of apprenticeships available to Americans today.

“We need this national commitment to embrace the rapidly, ever-changing job demands to ‘reskill’ and ‘upskill’ our workforce. I love the phrase ‘in-demand skills’, we call it ‘in-demand education’. Education where community colleges respond to what is being demanded by businesses. They teach not just any old skill, but in-demand skills. That’s what this inititative (pledges just signed by companies to provide educational opportunities and apprenticeships to almost 4 million American workers) is all about.” —U.S. Secretary of Labor Alexander Acosta, 07/19/18

In a major bipartisan win, the Carl D. Perkins Career and Technical Education Act aimed at bolstering skills training for technical jobs in various industries unanimously passed the House on July 25th afternoon after passing the Senate on July 23rd.

On 07/31/18 President Trump signed the Perkins Career and Technical Education Act into law at Tampa Bay Technical High School in Tampa, Florida. The Perkins CTE Act provides crucial funding toward training programs for American students and workers. Perkins CTE provides more than $1 billion each year to states for vocational and career-focused education programs. These programs, tailored toward secondary and post-secondary students, will help employers fill the high-skill jobs of tomorrow.

Q) Why hasn’t the MMT community (who pride themselves as stalwarts of the general welfare and the public purpose) given this administration credit for this jobs training and vocational education initiative?

A) Praising the MMT apprentice for this or any of the historical and record-breaking economic results delivered so far would not fit their political narrative.  

Thanks for reading,

Pure MMT for the 100% https://www.facebook.com/PureMMT/

 

P.S. “(With) the highest public deficit in 6 years, Wall Street is very excited about this, and rightly so. Mr. Trump is the straightforward implementer of MMT. The embarrassment of the MMT gods consists of the obvious PR disaster that Mr. Trump did not care to put on the social fig leaf which is of overall importance for the political credibility of MMTers. In the end, only success counts. While Wall Street can openly rejoice, the academic MMT gods click glasses with Mr. Trump behind closed doors, with Stephanie Kelton chiding Mr. Trump for unthinkingly busting the social cover of the MMT deficit-spenders/money-creators.”— Egmont Kakarot-Handtke, ‘Secret Champagne For The MMT Gods’, August 30, 2018

 

P.S.S. “There’s no ‘economic’ reason for raising taxes and that’s been our position all along. To say that you can’t do anything because everything has to be ‘payed for’ (that you’re going to have to raise taxes) and these guys, meanwhile, these guys are running the tables. They’re doing defense spending…No ‘pay for’s. They’re doing tax cuts…No ‘pay for’s. They’re going to come along with a tax cut 2.0…No ‘pay for’s. They’re going to give money for a wall…No ‘pay for’s. They’re already there. They already have this.“—Stephanie Kelton, The Second International Conference of MMT, September 28, 2018

 

P.S.S.S. “One of the funny things that happened here is that in a way I think the Republicans with their tax cuts (that didn’t have to be ‘paid for’) kind of advanced the (MMT) agenda here.“—Stephanie Kelton, Presidential Lecture Series Oct. 15, 2018

 

P.S.S.S.S. 12/30/18:

“Rep. Steven Palazzo (R-MS) introduced the Border Bonds for America Act of 2018 that would direct the Treasury Department to issue government savings bonds that could be used to fund wall construction. The bill ‘allows American citizens the opportunity to purchase revenue bonds to help finance the construction of a southern border wall,’ the press release announcing the legislation said. ‘This bill is a safe investment into the infrastructure and security of our country,’ Palazzo said. He added that there is a precedent for Americans paying to ensure the nation’s security. During World War II, 85 million Americans purchased $185 billion in war bonds and financially supported our troops while they were defending our country. ‘I believe this legislation allows new alternatives for our citizens to support their values and defend our homeland’, Palazzo, Vice chairman of the Homeland Security Appropriations Subcommittee, also added.”

MMTers who can tune out the politics (the Wall, Trump, blah blah) of this proposal and just read between the lines, can find the pure MMT within.

The verbiage ‘war bonds financially supported our troops in WWII’ translates into MMT-speak as actually meaning ‘war bonds sold during WWII maintained US price stability against the inflationary bias of full employment—under the guise of *financing* the war’.

Fast forward to today, federal policymakers don’t have to worry about inflation (that the full employment and the rationing of goods could have caused during WWII without doing a hard-sell on Treasury bonds re-labeled as War Bonds in order to wisely drain dollars from circulation).

However, policymakers presently do need to start thinking about ‘new alternatives’ that encourages an unlocking of unproductive capital (an unlocking of savings dollars) in order to become productive capital (in order to re-enter the functional economy).

Rather than the same-old tired political prescriptions that always means ‘more deficits’ (which always trickle up to the 5%), it’s good to see even more federal policymakers acting like MMT Apprentices.

P.S.S.S.S.S.

01/22/19:

Here’s another example of how Pure MMT is the modern currency analysis; while #fakemmt is just more of the same old Politics As Usual:

It’s Day 32 of the partial gov’t shutdown (over the funding of a border wall); and yet over the past month not a SINGLE person in the ENTIRE mmt community has mentioned that, as per the mmt ‘description’, we could open the gov’t without worrying about ‘how to pay for it’. No chants of ‘Keystroke That Wall’ (because #fakemmt only applies to what THEY want).

P.S.S.S.S.S.S.

01/26/19:

Hey,

Look at this,

until March 1st, the debt limit is $0…

(because a year ago, on February 9, 2018 as part of a two-year budget deal raising both defense and domestic spending, President Trump signed a bill suspending the debt ceiling until March 1, 2019.

Do you know what that means?

It means that during the Trump Administration’s second year in office there was no debt limit!

This is yet another glimpse of the future, where the Modern Monetary ‘Formality’ of having a debt limit is disposed of and the Modern Monetary Theory enters the final stages to become the Modern Monetary Reality.

Meanwhile, nobody in the political ‘prescription’ MMT community (aka the #FAKEMMT kiddie pool) is talking about this—because they wouldn’t know Pure MMT if they tripped over it.

P.S.S.S.S.S.S.S.

01/28/19:

“Slowly and surely I’m seeing some people start to realize that Republicans have lied to them calling themselves, you know, like having really strong ‘conservative values’ in terms of fighting debt…NO, they’re the biggest MMT people we’ve seen in our lifetime.“—Logan Mohtashami

@-3:04 https://www.facebook.com/Logan.Mohtashami/videos/10156250828558250/?notif_id=1548519443096310&notif_t=live_video_explicit

P.S.S.S.S.S.S.S.S.

02/10/19:

The MMT Apprentice knows fake MMT when he sees it:

P.S.S.S.S.S.S.S.S.S.

02/23/19:

Today, the MMT community is celebrating that Warren Buffett, in his annual shareholder letter, wrote that “Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400-fold during the last of my 77-year periods. That’s 40,000%!”


NOTE that MMT insight of Buffett’s was written during the administration of the MMT Apprentice.

P.S.S.S.S.S.S.S.S.S.S.

03/01/19:

“I am going to say something that will offend both sides of this debate, but Trump is the most MMT-like-President ever elected.” Kevin Muir, the MacroTourist


P.S.S.S.S.S.S.S.S.S.S.S.

03/06/19: THE WHITE HOUSE: For decades, American workers were neglected and forgotten as Washington stood idly by. While corporate America pushed for cheap labor abroad, our leaders let communities in the heartland crumble instead of fighting for blue-collar employees. President Donald J. Trump pledged a new kind of economic agenda to change all of that. In just over two years in office, his Buy American and Hire American policies have poured investment back into the United States. More manufacturing jobs were created in 2018 than any single year in the last 20, for example. America now has the hottest economy on earth. The next step is making sure that soaring growth pays off for every working American family. Today, Advisor to the President Ivanka Trump hosted some of the country’s top CEOs—including Apple’s Tim Cook and Walmart’s Doug McMillon—for the first meeting of the American Workforce Policy Advisory Board at the White House. The group, which will advise President Trump’s National Council for the American Worker, is made up of 25 leaders from across industries and communities. Its mission: Help more American workers get the skills training they need to fill one of the 7.3 million available jobs in our country today. The Pledge to America’s Workers, which President Trump announced last summer and Ms. Trump leads, is part of a major push by the Trump Administration to fix that. Since the launch last July, 205 companies and organizations have pledged more than 6.5 million new career opportunities and apprenticeships for American workers and students.

“Employers were coming to us and they were saying, ‘We’re optimistic about America, we want to invest here but a constraint for growth is the lack of a skilled workforce—we don’t have people to fill the jobs,’” Ms. Trump told The Wall Street Journal this week. “The right skills matter more than degrees,” Ms. Trump added.

P.S.S.S.S.S.S.S.S.S.S.S.S.

03/20/19:

Seen in a CCN (an unbiased financial news site with a special focus on cryptocurrencies and US Markets) article titled ‘What is MMT and Why Is It Causing A Stir in America?’:

Note: This article gets it—that Trump is the MMT Apprentice.

Which is what this post has been saying—for almost a year now.

Remember (something that I was taught during my first week on Wall Street) that it doesn’t matter how long it takes for you to grasp concepts; the most important thing (my first ‘assignment’) is just try to grasp them ahead of everyone else.

P.S.S.S.S.S.S.S.S.S.S.S.S.S.

04/30/19:

It’s official—It’s not about ‘paying off the debt’ anymore.

The MMT Apprentice tweeted today that (if we added a great stimulus and we kept interest rates low) we could “make our National Debt start to look small”.

MMTers should now be explaining to those that aren’t initiated to MMT concepts that it’s about growing the economy—productively—so that the ‘debt’ looks ‘small’.

Meaning that in addition to the inflation indicator, the ‘DEBT'(our $$$) / GDP (our output) is the indicator to also keep an eye on because it tells you if you are doing just that.

The federal gov’t, the issuer of dollars (spending in its own fiat dollars), must also watch ‘Debt’ to GDP because, even if you achieve your desired ‘level’ of inflation, it still might not be a desired ‘type’ of inflation. The key is price stability AND also keeping the ‘debt’ looking ‘small’:

“If deficits are creating increases in productivity, then the Debt to GDP ratio should be falling; so if the economy is at the desired level of inflation, the Debt to GDP ratio should not be rising. If the Debt to GDP is rising, either we are stuffing the top 5% with just more dollars, with no production (inflation of asset bubbles / dollars stuck in the nonfunctional economy / wider wealth inequality), at best; or, at worst, we could be heading for a crisis.”—MINETHIS1, Budgets Are For Users

P.S.S.S.S.S.S.S.S.S.S.S.S.S.S.

05/09/19:

“If the Australian Coalition understood the monetary system as well—I’m going to shock people here—as Donald Trump appears to, then they’d be running fiscal deficits, cutting taxes and the economy would be doing much better.”—Steven Hail, discussing ‘The Merits Of MMT’ with Martin North, 05/09/19

SOURCE (at 12:03): https://www.macrobusiness.com.au/2019/05/the-benefits-of-mmt/

P.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.

07/24/19:

A future Final Jeopardy ‘answer’:

‘The answer is’…(cue Jeopardy music)…’He was the 2020 presidential candidate who also had the MMT economic adviser’:

TRUMP: Shoved aside deficit worries in a debt deal with Pelosi and suspended the debt ceiling.

SANDERS: “I will explain this one last time. We’re going to pay for these programs by making billionaires and large corporations pay their damn taxes.”

Which is a trick ‘answer’—because contestants will confuse it with: ‘He was the 2020 presidential candidate who also was the MMT Apprentice.’

P.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.

08/03/19:

“For the second year in a row, the Trump administration is spending $1 trillion more than the government expects to extract from the taxpayers. ‘Federal Borrowing Soars as Deficit Fear Fades,’ said the headline on page one of Tuesday’s Wall Street Journal. Modern monetary theory is not so theoretical anymore. In all but name, it’s the description of Republican fiscal policy in this living moment.”—Jim Grant, The Trouble With Modern Monetary Theory https://www.barrons.com/articles/jim-grant-the-trouble-with-modern-monetary-theory-51564740001

P.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.

08/07/19:

REUTERS: “And even Kelton, an economics professor at Stony Brook University in New York and an adviser to Senator Bernie Sanders’ presidential campaign, is a bit thrown by the fact that the person who appears closest to accepting her argument is President Donald Trump, whose Republican Party has traditionally touted an adherence to fiscal discipline.”—Howard Schneider, ‘MMT may be Democrats economic cure but only Trump got the memo’

P.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.S.

08/10/19:

“So this very-accommodating Fed is suddenly too tight? The Republicans sound like MMT people. Both are saying there’s no inflation, so the Fed should keep rates low—the MMT people want to keep rates at 0%. I’m sure the Trump people would love to go back to 0%.”—Logan Mohtashami

ATTN: Real Progressives (those wearing the ‘taxes don’t fund spending’ floaties in the mmt kiddie pool):

ATTN: Real Progressives (those wearing the ‘taxes don’t fund spending’ floaties in the mmt kiddie pool):

As seen in your recent Real Progressives broadcast, you’re still not grasping the difference between surplus spending (a ‘swap’ where there is no addition of dollars, or Net Financial Assets, going into the banking system) v. deficit spending (where there is an ‘outright’ addition of dollars, or Net Financial Assets, going into the banking system).

More specifically, #FAKEMMTers love the ‘there is no financial constraint’ part of the Modern Monetary Theory, but hate the ‘there still is a political constraint’ part of the Modern Monetary Formality.

The Fed is the federal gov’t ‘swap’ desk. The Fed can create dollars only if it receives something in return, like Treasury bonds or Mortgage-Backed Securities (like during ‘QE’ which did not add NFAs to the banking system); or another example, the Fed can only create dollars if it receives some collateral, like toxic assets (like when the Fed loaned dollars to AIG in setting up the ‘Maiden Lane’ holdings which also did not add NFAs to the banking system). So, similar to any other bank that can create dollars only if it receives a signature on an IOU, the Federal Reserve Bank cannot create dollars if it is not a ‘swap’.

The Treasury is the federal gov’t ‘outright’ desk. If the Fed is not getting anything in return, then the Fed must be instructed by the Treasury (like when the Fed handed over $125B to the banks to bail them out, the Fed was instructed by the Treasury to ‘outright’ create those TARP dollars which did add NFAs to the banking system).

@28:15: “Let me show you where the money comes from Stephen. Right here, you see this little keyboard? This is where the money comes from. ‘How are you gonna pay for it?’, this keyboard, right here”—Ellis Winningham

(No, that’s #FAKEMMT. The dollars come from federal taxation or Treasury bond sales and without either taxes or bonds, no keyboard can prevent a government shutdown. Those are the only two ways that the ledgers of the Daily Treasury Statement accounts, where all federal spending is drawn from, gets filled with entries of dollars. That’s the law. Operationally, it DOESN’T NEED to be that way. That’s the Pure MMT.)

“The money the gov’t is collecting in taxes is being deleted, that’s it, it’s not paying for anything.”

(The money that is collected in taxes is debited from the money supply and is credited to the Treasury, or in other words, taxes are ‘funding’ the same Daily Treasury Statement account at the Treasury where all federal spending is drawn.)

“The Treasury will debit that account, the taxes are removed, the net money supply will drop just a bit.”

(…while an equal and opposite amount of dollars that is credited to the Treasury causes their reserves to increase just a bit, meaning that there is no change of Net Financial Assets in the banking system.)

“The Federal Reserve goes to the Treasury’s operating account and types the number into that account.”

(and because the Fed is the ‘swap’ desk, they cannot do that without knowing, or being instructed by the Treasury, that the same amount of taxes was received.)

“But the problem is there’s nothing in that Treasury account that counts towards the stock of money because it’s not money.”

(but those reserves in the Treasury account ARE still NFAs, they ARE still dollars in the banking system.)

“The gov’t has to spend it to become money, so the Treasury then credits an account and the Federal Reserve creates brand new liabilities by typing a number, they emit currency.” 

(There you go again, whether you call them ‘liabilities’, or ‘money’, or ‘reserves’, still doesn’t change the fact that from the point of federal taxation to the point of federal spending, they are all Net Financial Assets, they are all dollars in the banking system.)

“By authority of gov’t the Treasury is giving instructions to the central bank to inject reserves into the banking system.”

(In other words, the Fed is only a swap desk, the Fed can only ‘outright’ inject reserves to the banks after the Treasury, the ‘outright’ desk, instructs the Fed that the Treasury has been injected with taxes)

All gov’t spending is money creation, all national gov’t taxation is money destruction.”

(Surplus spending is a ‘swap’, meaning no change in Net Financial Assets from the banking system; deficit spending is an ‘outright’ addition of NFA, an increase of dollars in the banking system; and only when taxation goes towards paying off national bonds is there a ‘destruction’ of NFA.)

“There’s no taxation proceeds funding anything.”

(The federal gov’t is funding us and we are funding them right back…MMT isn’t ‘taxes don’t fund spending’…MMT is that, unlike the gold-standard era, the gov’t doesn’t NEED our taxes first…MMT is that, in the post-gold standard, modern monetary system, federal taxes are NOT NEEDED to fund spending—not that they don’t.)

P.S. Don’t just take my word for it: “I DON’T LIKE TO SAY ‘TAXES DON’T FUND SPENDING’ because the word fund is ambiguous, it means different things to different people and even though you can be right, you can be dead right, but it’s better to say the gov’t DOESN’T NEED your money to be able to spend…not that it DOESN’T FUND IT…taxes ARE NOT NEEDED to be able to spend.” Warren Mosler, at the MMT conference, September 24, 2017.  ATTN ELLIS: What Mr. Mosler meant by saying “the word ‘fund’ means different things to different people” is that, beyond the MMT kiddie pool, ‘fund’ means more than just ‘finance’ (to people like bankers, lawyers, accountants, policymakers and other experts in the field).

Sincerely yours,

https://www.facebook.com/PureMMT/