Why Modern Monetary Theory Is a Dicey Bet for Liberals

By: Saturday September 27, 2014 5:20 pm

It’s the extension of Modern Monetary Theory beyond monetary theory where I start to have reservations. Using Modern Monetary Theory as the basis for public policy is tricky because in addition to justifying liberal priorities like funding safety net programs or a job guarantee, it can also be used for neoliberal ends like slashing taxes and eliminating the minimum wage.

When Modern Monetary Theory stops being a monetary theory, vague notions like “public purpose” and “productive capacity” come into play. Marshall admits we already have Modern Monetary Theory for big banks, as evidenced by the bailout and other extraordinary measures. Who is to say public purpose hasn’t been served by that? Who’s to say there isn’t an abundance of productive capacity bottled up in our entrepreneurial job creators just waiting to be unleashed by the elimination of the capital gains tax?

 

Trying to Make Sense of a Manic Monetary Theory

By: Sunday June 8, 2014 3:50 pm

My main reservation with Modern Monetary Theory is probably this: It is named a monetary theory, yet its proponents expand its scope – in all directions, it sometimes seems – to include topics that have nothing to do with monetary theory. I think it’s reasonable to expect a monetary theory to describe the way money works, and nothing else.

MMT’s Job Guarantee: Oasis or Mirage?

By: Saturday May 31, 2014 5:20 pm

MMT, at least as advertised to liberals, postulates a job guarantee. One of my problems with MMT is the way various proponents’ wish lists get conflated with the theory.

Money in a Trillion Dollar Coin World

By: Sunday January 13, 2013 10:30 am

It’s very impolite to talk about money in polite circles, like Washington, D.C. Too bad, suckers.

The Small Ball Trillion Dollar Coin Seigniorage Exception

By: Tuesday January 8, 2013 5:38 pm

The exception to the general pattern focusing on the Trillion Dollar Coin (TDC) as the solution to the debt ceiling problem I outlined and critiqued in my last post, is in Joe Wiesenthal ‘s posts here and here. Wiesenthal alone criticizes, rather than ignores, other options than the TDC, namely the $16 T and $100 T options, on grounds that they are no more effective at meeting the debt ceiling crisis than the TDC. He says that the issue is not a lack money but the debt ceiling law, and also that if a coin that large were minted and used to pay back the debt, then the result would be inflation or hyperinflation because of the flow of the large quantity of reserves into the economy, and the ensuing great expansion in the money supply.

I think that Joe Wiesenthal is both showing his bias towards solving the smaller, more immediate (debt ceiling), rather than the larger (austerity) problem, and also that he’s dead wrong about the impact of a $100 T coin on inflation. On his bias: I can only say, that I don’t agree that “we” are talking about a legal problem rather than a money problem.

Trillion Dollar Coin: Posts on Legality and Constitutionality

By: Saturday January 5, 2013 6:40 pm

Enthusiasm for using Platinum Coin Seigniorage (PCS) to produce a Trillion Dollar Coin, or coins totaling a few trillion dollars continues to increase. The twitterverse went mad two nights ago around #mintthecoin, a hashtag originated by MMT’s Stephanie Kelton, which by yesterday morning had become the 5th most highly trending topic on twitter.

Meanwhile, the blogosphere continued to produce more points of view on the Platinum Coin.

Krugman Goes Platinum!

By: Friday January 4, 2013 5:51 am

Another platinum coin surge in the Second Wave rippled through the mainstream media yesterday and this time hit the Congressional Progressive Caucus. Domenico Mantanaro of MSNBC kicked things off on one of the morning shows by mentioning the Trillion Dollar Coin (TDC) as a possible solution to the debt ceiling problem. Then, in the afternoon, on MSNBC’s the cycle, Krystal Ball, and Steve Kornacke, in discussing the coming debt ceiling conflict talked rather matter-of-factly, I thought, about minting some TDCs to get around the debt ceiling.

Then Paul Krugman blogged about platinum coins. In the context of answering a question about whether we can “print money,” to get around the debt ceiling, he answers no, and then says…

Richard Eskow Asks: Which Side Are You On?

By: Sunday December 23, 2012 6:45 am

I certainly hope that Nancy Pelosi cannot convince most Democrats to risk their seats and prepare the way for a Republican sweep in 2014 by voting to cut SS. The Republicans will respond to this by casting themselves as the protectors of SS, and while this is ridiculous, the Democrats will not be credible in claiming that they are its protectors, and they will lose their identity as the protectors of the safety net, a very high price to pay for the sake of raising taxes on the rich by an amount that is insignificant in the greater scheme of things.

What Does the Trillion Dollar Coin Do?

By: Sunday December 9, 2012 11:50 am

The Trillion Dollar Coin proposal for solving the debt ceiling problem is again experiencing a blogosphere explosion this past week. The precipitating factor may be that people are starting to believe that the Republicans will come to a “fiscal cliff” settlement with the Democrats including very little in entitlement spending; but will then come back, in 2013 with a very tough position on the price they want to agree to raise the debt ceiling to give the Executive operating room for any length of time.

Let’s Defend Social Security and Other Entitlements With the Second Bill of Rights

By: Tuesday November 27, 2012 3:20 pm

We can’t look at Social Security and our other entitlements in isolation. We have to fight and win the battle for FDR’s economic bill of rights, and for an expansion of all the entitlements in the American social safety net; now the stingiest, most inadequate safety net among modern industrial nations!

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