#MMT Twitter DM Rant

I'm feeling like I'm kind of done reading economics for a while. Instead, I will maybe be harvesting the crystals from the supersaturated solution in my brain. I got followed by (and followed) on Twitter a guy who ID'ed as "concerned that government debt will keep my sons from having the same opportunities that I have had." Obviously in need of a #MMT intervention. Here we go:

Show me the national debt. A nation that has its own currency never has to collect taxes or create debt to spend money. Congress tells the Fed to print $$$, the Fed prints $$$.

If someone set the National Debt to 0 in all the government computers, how would we know the difference?#MMT FTW!

My first car, 1966 Ford Fairlane cost $2,460. Same car today would be $30,000. I think inflation is the long-term outcome of spending money that you print out of clear air. Can you give me an historical example of a country that printed as much money as they wanted and had a good outcome?

And I think inflation hurts the people at the bottom of the ladder the most. Gas can go to $50 a gallon and I’m still gonna drive around some. I have been priced out of the local housing market. I bought real estate here in the 80’s and 90’s, and I could not afford it today.

Inflation is caused by supply side shortages, not too much money in circulation (monetarism). My 1st car was a 1974 light blue Ford Pinto station wagon purchased new for $3200 I think.

Most of the inflation of our lifetime was created by the Arab Oil Embargo of the early 70s. The tripling of the cost of oil created an artificial shortage of the primary commodity of the economy.

But there was some inflation in the mid-late 60s caused by the the Federal gov competing with the civilian sector for resources as it ramped up for the Vietnam war.

Supply side shortages === resource shortages. Per #MMT, real resources are all that matter. Money is just bookkeeping. The $ is a unit of measure. It is created in computers as desired.

My review of the main MMT book wound up being way too long. http://portraitofthedumbass.blogspot.com/2020/05/modern-money-theory.html

This 56 minute video is a better intro to #MMT. https://www.youtube.com/watch?v=mKICOEY9l6w

Do you trust the government to control this? Do you have an example historically of where this has worked?

Real estate is indeed a real resource that becomes scarcer as population grows.

Re what you just posted, I trust the government more than I trust the oligarchs - although they are currently pretty hard to tell apart. I'll send you a recent rant I did. I proposed taking National Debt from 1x GDP to 1000000x GDP. What would happen? I have no idea. It would an interesting experiment.

But, would the 50% of US citizens currently with <= $0 net worth be worse off? I doubt it.

So, no, no historical examples, everyone up to now has been drinking the "money is real" koolaid. A great experiment. To create a future where no one is poor and no one is hungry.

Your slide on MMT is very good! Thanks, I will reuse.

I would like to capture this conversation in a blog post. Do you mind if I include your content anonymously?

Sure no problem, I’ve enjoyed the conversation.

1 last thought. There is 1 other thing you must worry about besides inflation: that is currency conversion rate.
If you just print too much money, the rest of the world says "You're cheating" & your exchange rate goes down.
But, US is still in a unique position. There is no current alternative to the $ as the world's default currency. There is not near enough of any other currency in circulation to replace the $. Why? Because no one else is running the debt we are. But, that could change. But only if other nations want to start running much larger debts.

Somehow, I think that's the right way to go. Every government with its own currency should roll the $ presses, & keep them rolling. Let evolution the invisible hand sort it out.

I believe we have been in a post-scarcity economy (Capitalism 2.0) since the 1950s. (Capitalism 1.0 = scarcity economy.) There is enough of everything to go around - except maybe McMansions. Else why would corporations be spending $B convincing us to buy crap we don't need? Now just need to convert into post-scarcity utopia (Capitalism 3.0). Easy-peasy!