>This analogy is wrong, she tells us, because households are currency users while the government is the currency issuer: it spends its currency into existence.
Starting off with wrong vs wrong? How about a place like Greece who does not control their own currency; whose spending is not issued currency at all? Ever. Who absolutely must balance their budget not only by obligation but by necessity.
In a country who does control their currency, you don't necessarily issue currency as spending. You do tax and therefore the majority of each budget isn't issued currency. Aka 'printing money' which is more digital than printing today than when the saying was produced.
>Of course, the fact that the government can manufacture its own currency does not mean that there are no limits to its spending; but deficits are not evidence of overspending, inflation is.
Not really true neither. When a country can issue their own currency, there is practically no limits on spending. If you had a myriad of fantastic ideas you could do it. You would easily get away with it. The problem is that the vast majority of ideas out of politicians are not good ideas. Therefore if they were to spend too much, the wealth destruction from those holding the currency would assassinate said politicians quite quickly.
>Once we fully aknowledge the role of the government as the currency issuer, it becomes clear that the sum of all past fiscal deficits—what we call the "National Debt"—really isn't a debt in the usual sense of the term. It is "nothing more than a footprint from the past", a statement of the total amount of currency issued by the government to date.
Not quite right. If as the government took on significant debt to produce something that is a net-generator of money. Which is common, OPG for example takes on big debt when building a nuclear power plant but then pays it off by selling the electricity.
Like for example https://tradingeconomics.com/canada/government-debt , lets say Canada didn't spending $300 billion on sending paycheques to no end at all and never actually did the stupid lockdown to begin with. But we still took on historic levels of debt causing tremendous inflation.
Instead they built the new Canadian moon base where the canadian government is responsible for getting you to the moon. The cost to get you to the moon to start a new life would be a nominal cost, profitable to the gov. There is no question such an endeavor would produce far greater wealth then the debt of today. Such a decision would be good.
The reality though is that $300 billion was literally nothing more than buying votes. It won't generate any new revenues and very little will ever be recaptured as taxes anytime soon.
>This framework starts from a simple accounting axiom: "everything comes from somewhere and everything goes somewhere". Seen from the perspective of a government's finances for instance, this leads to what Godley and Kelton playfully call the "one-equation model of the world":
Which is absolutely wrong in a fractional banking system.
You entire comment kind of ignores what is meant be a stock-flow consistent model. It _has_ to be consistent. All you points are typical of thinking of money in terms like "If as the government took on significant debt to produce something that is a net-generator of money. Which is common, OPG for example takes on big debt when building a nuclear power plant but then pays it off by selling the electricity" without thinking about the other side of the balance sheet. The link shows us what happens when you make something actually stock consistent, which is quite a few of the apparently obvious intuitions becomes clearly false.
You can't really argue with a stock-flow consistent approach - it absolutely has to be the case. You can discuss where the stocks end up and how they move about (which this model only approaches relatively simply), but it _must_ be consistent. Unless there is dodgy shenanigans going on, the money can only be created and destroyed in a limited set of places, and critically creation and destruction in the vertical money system (i.e. where the net financial assets don't have to sum to zero) can only happen at the central bank.
Greece isn't a country. It's a component of the Eurozone. In that system the ECB is the government.
All countries issue currency as spending because that's how banking works - even if they settle up into something else by the end of the day. Intraday banking can't work any other way.
Politicians are elected so they are entitled to spend what they can get past the legislature - and nobody else should be able to stop them. Otherwise we don't live in a democracy.
You don't need Revenue and taxation. Taxes for revenue is an obsolete concept as Beardsley Ruml pointed out in the 1940s.
As is the idea of fractional banking systems. They don't exist. Loans create deposits, and always have. As the Bank of England explained very clearly in 2014.
Greece actually is a country. A state. Whether it is part of the Eurozone or not doesn't change this.
Money is not magic. The value of money represents the value of the goods and services produced by the entity that issues it. Every dollar spent by government takes a dollar (of value) from its citizens, sometimes even more.
Government takes money from its citizens in two ways–
1. Taxation- front door theft en masse that is moralized by those who control the spending. A slight bit might be moral, e.g. to keep people from starving to death, but no where near what is commonly taken. "The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work... when you go to church... when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth." –The Matrix
2. Inflation– back door theft en masse that is never moral except perhaps to blunt mass murder through a war of aggression against the nation. e.g. Real national security where many millions would die otherwise, not fake national security where the government says that if you share a fact they don't want you to, you go to jail for life. It happens any time government spends money it hasn't raised through taxation. "Inflation is taxation without
legislation." –Milton Friedman
That's an interesting world view. I can't say I've had anyone argue this way.
>It's a component of the Eurozone. In that system the ECB is the government.
Greece doesn't have a government?
>All countries issue currency as spending because that's how banking works - even if they settle up into something else by the end of the day. Intraday banking can't work any other way.
I don't follow sorry. Could you explain this a little more in depth?
>Politicians are elected so they are entitled to spend what they can get past the legislature - and nobody else should be able to stop them. Otherwise we don't live in a democracy.
The Greek socialists who caused their current predicament absolutely had every right to do what they did.
>You don't need Revenue and taxation. Taxes for revenue is an obsolete concept as Beardsley Ruml pointed out in the 1940s.
Honestly have't seen any of you MMT folks in over a year.
>As is the idea of fractional banking systems. They don't exist. Loans create deposits, and always have. As the Bank of England explained very clearly in 2014.
They don't exist? Just like Greece isn't a country?
Starting off with wrong vs wrong? How about a place like Greece who does not control their own currency; whose spending is not issued currency at all? Ever. Who absolutely must balance their budget not only by obligation but by necessity.
In a country who does control their currency, you don't necessarily issue currency as spending. You do tax and therefore the majority of each budget isn't issued currency. Aka 'printing money' which is more digital than printing today than when the saying was produced.
>Of course, the fact that the government can manufacture its own currency does not mean that there are no limits to its spending; but deficits are not evidence of overspending, inflation is.
Not really true neither. When a country can issue their own currency, there is practically no limits on spending. If you had a myriad of fantastic ideas you could do it. You would easily get away with it. The problem is that the vast majority of ideas out of politicians are not good ideas. Therefore if they were to spend too much, the wealth destruction from those holding the currency would assassinate said politicians quite quickly.
>Once we fully aknowledge the role of the government as the currency issuer, it becomes clear that the sum of all past fiscal deficits—what we call the "National Debt"—really isn't a debt in the usual sense of the term. It is "nothing more than a footprint from the past", a statement of the total amount of currency issued by the government to date.
Not quite right. If as the government took on significant debt to produce something that is a net-generator of money. Which is common, OPG for example takes on big debt when building a nuclear power plant but then pays it off by selling the electricity.
Like for example https://tradingeconomics.com/canada/government-debt , lets say Canada didn't spending $300 billion on sending paycheques to no end at all and never actually did the stupid lockdown to begin with. But we still took on historic levels of debt causing tremendous inflation.
Instead they built the new Canadian moon base where the canadian government is responsible for getting you to the moon. The cost to get you to the moon to start a new life would be a nominal cost, profitable to the gov. There is no question such an endeavor would produce far greater wealth then the debt of today. Such a decision would be good.
The reality though is that $300 billion was literally nothing more than buying votes. It won't generate any new revenues and very little will ever be recaptured as taxes anytime soon.
>This framework starts from a simple accounting axiom: "everything comes from somewhere and everything goes somewhere". Seen from the perspective of a government's finances for instance, this leads to what Godley and Kelton playfully call the "one-equation model of the world":
Which is absolutely wrong in a fractional banking system.