“MMT ‘scholars’ mock Ben Bernanke for saying ‘public debt is a problem’.
While everyone laughs, he is right.
The national ‘debt’ is 170% of GDP, which would have been catastrophic 30 years ago, but today, it’s not. PE stock values of 28 today would have been extreme 30 years ago, but today, it’s not. It’s a ‘conundrum’ that the prices of bonds are so high as well (that the long term interest rates are so low).
Those high federal gov’t deficits, those high stock valuations and those high bond prices are not a coincidence, why?
A) The savings bubble
Deficits wind up in savings.
Fake MMTers say ‘Their deficits = Our savings’.
Pure MMTers ask ‘Their deficits = Whose savings?’
A) The 5%.
It can be seen everywhere.
Instead of GDP outperforming debt, the reverse is happening (because of the savings bubble).
Noninflation in the functional economies v. higher inflation in the nonfunctional economies.
Unproductive capital (production of capital with capital) without increases in production of goods (relative to the amount of dollars, pounds, euro, & yen being pumped into the economy).
While laughing at the Fed, the MMT ‘scholars’ are suggesting a Soviet ‘Job Guarantee’ (spending $500B on having the gov’t create ‘jobs’ during a labor shortage) while having no idea that their ‘remedy’ (their #fakemmter ‘prescription’) of the problem only enhances it.”—Jim ‘MINETHIS1’ Boukis, creator of the Investing Modern Monetary Theory Facebook page
P.S. MINETHIS1 is right. When monetary policymakers (Ben Bernanke or Janet Yellen or Jerome Powell) say we need ‘to lower our federal debt’ because ‘our fiscal course is unsustainable’, they don’t mean in a financially-sustainable sense. The Fed knows that the US federal gov’t, the issuer of dollars, can’t ‘go broke’ or ‘run out of dollars’ (like anyone else, a user of dollars, can). The Fed knows that the US federal gov’t is not in ‘debt’, because they know that those Treasury bonds are now denominated in fiat dollars (unlike during a bygone era when those bonds were denominated in gold-backed dollars). There is no such thing as the issuer of US dollars being in debt in US dollars (just like IBM, the issuer of IBM stock, is never in ‘debt’ of IBM stock). However, 95% of The People don’t know this, so the Fed has to keep talking in code about the ‘debt’. Just like when fiscal policymakers talk in code and say things like ‘We can’t afford that’ or ‘How are you going to pay for that’, they are talking in code. For example, if you have to explain to a PhD in Economics WHY her proposal to spend $500B for the federal gov’t to create quote ‘jobs’ unquote during The Largest Jobs Growth in Human History, during a labor shortage, is an idiotic idea (is obviously another ‘free ponies for votes’ ploy that only attempts to solve a political problem—not an economic one), THAT’S why the busy policymakers just say ‘we can’t afford that’. It’s the same reason why a busy parent in the supermarket says ‘we can’t afford it’ to a child that wants more candy ‘this’ and more candy ‘that’ because that’s what you do (you tell white lies to those you can’t reason with).
Thanks for reading,
Pure MMT for the 100%
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ENCL: IMMT Patreon page link to ‘IMMT Exposes FAKEMMT PARTY and Soviet Job Guarantee’.