“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’.
P.S. As of October 2018, IMMT is called ‘REALMACRO INVESTING’ (RMI). The reason being, that ‘modern monetary theory’ has become too political, too toxic and too loony to be associated with real-world econ, so Jim ‘MineThis1’ Boukis decided (correctly) that he should no longer use the letters MMT anymore. Here in his own words, he explains the reasons for the name change:
“HELLO! #REALMACRO INVESTING!
BYE! BYE! IMMT!
After years of hoping that MMT would not turn into the laughing stock of the economic community with extremist political, Neo Marxist and cult groups such as the Real Progressives, it has been decided that IMMT will no longer be associated with MMT cheap circus act.
We have tried for years to save MMT by sticking to the ‘Description’ and avoiding the ‘Prescription’ Political MMT Party, Soviet Sympathizing, Free lunch, economic Voodoo that it has become: Full of oversimplification, memes, lies, with over-promising and under-delivering rhetoric.
We have also during that time taken an incomplete MMT theory and made it more whole while simplifying it in the process. Most importantly we made it applicable in the Real World! Not just on some spreadsheet.
Our great efforts for the past few years has added the two missing sectoral balances, Household and Business, within the private sector that reveals the truth behind unnecessary deficits beyond the scope of removing fear in the markets. When the two missing sectoral balances are plugged in then show that:
Households must DISSAVE in order for Businesses to have PROFITS.
One can easily see that unnecessary deficit spending only lead to savings for the top 5% in Profit/savings. Thus “(Their) Gov’t Deficits = (Our) Private Sector Assets” really means Private sector assets for the top 5% and not the 95% which fake MMT most desperately wants you to believe. In short, Trickle Up economics is just as bad as Trickle Down economics.
We also corrected and simplified the constant redefinition of money and what it is with ‘All MONEY IS MONEY’. No more reserve money, high powered money, net financial assets money, horizontal money, tax credit money, bank credit money, treasury money, tax debt money, endogenous money, exogenous money, unit of account money, debt money, IOU money, M1 M2 M3 money, fiscal space money, gold money, real money, on and on. These are all designed to confuse people by pseudo-intellectuals to push their cultist political views. As you can see above, the word money is constant. They are all denominated in dollars. That is all one needs to know. ALL MONEY IS MONEY!
We exposed the lie that federal taxes, when collected, are destroyed. Only surpluses that result in Treasury bond debt repayment can destroy money.
We exposed that higher rates cause inflation due to increase money supply. That is the cart ahead of the horse voodoo economics. Rates rise as a consequence of the economy is booming. We also exposed that limiting the money supply cause higher FOREX prices. Absolutely not true. EUROZONE has imposed Austerity and running current account surpluses. The result? EUR collapsed from 1.60 to as low as 1.03. Another failed MMT prediction.
We exposed the job-creating ‘Exports are a cost’ and job-destroying ‘Imports are a benefit’ fallacy. As Venezuela, Argentina, Turkey, Egypt, Russia, India, Tunisia etc. have proven that is not the case. Not even close. Qatar as a fine example showed that its isolation from neighboring trading partners never lost the peg to the USD due to large exports and foreign reserve money holdings. While print borrow and import countries that faced similar problems collapsed their currencies and most saw high unemployment and inflation.
We exposed that Taxes drive the currency or ‘value the currency’. Just look at the Middle East countries that do not tax.
We also exposed that MMT has no model to predict inflation, let alone deal with inflation other than to impose spending cuts, higher taxes pitchforking the rich, after the fact. Which is not an even economic solution but again a political one.
MMT predicted economic recession since 2015, 16, 17, 18 and now, 19. We also debunked that as well as we debunked that a ‘Job Guarantee’ is needed during a labor shortage, while companies are starving for workers in the midst of the longest job expansion in history.
Clearly, MMT is not MMT but rather the #FAKEMMT PARTY. Even the #FAKEMMT PARTY is an utter disaster as a political movement. Mosler with 8k followers on Twitter and Natasha Kelton 34k. Despite the Trump election outcome, and the Bernie Sanders movement and the publicity. Not to mention all the money thrown at it for the Marketing campaign.
The MMT brand has been trashed by the likes of the emotionally unstable, and emotionally bankrupt, Steve Grambine (AKA SNIFFLES) since he is always on youtube pretending he is crying, exploiting cancer victims and even his own son to scam money out of people. Mike Mousey Boy Norman promising all profits and blowing people’s account out. While the Wigs Natasha Kelton, Bill Bitchell, Mosler, Wray etc. continue to support such an extremist cult.
IMMT no longer wishes to hold the last torch to salvage the MMT brand, nor should #FAKEMMT benefit from all the hard work we have done over the years. MMT has become a huge disadvantage for IMMT. As soon as people see the MMT in our logo we are automatically blocked, laughed at and ridiculed before we even have a chance to make our PUREMMT case. Simply embarrassing, IMMT has been tied to a sinking ship.
#RealMacro Investing is Born! in the days and weeks ahead you will see us transform and continue to give people what they really want and have always expected from us. The Real Macro Economic Facts. We will continue to enhance the product and in doing so build our brand with winners who care bout the real world data.”—Jim ‘Minethis1’ Boukis 10/22/18