I’m not singling you out here, in fact I’m calling out all of the other cutting edge economists like Warren Mosler, Steve Keen, Michael Hudson, et al for not having daily news conferences shouting with their hair on fire that this is a titanic NON-ISSUE that the deluded and/or terminally demagogic are going to use to create chaos…when it doesn’t need to happen. That needs to happen regardless.
But I am puzzled that all of you and the others above are failing to recognize that you all are missing the way to put this nonsense away FOREVER by uping your analysis to the paradigmatic level which will change the current monopolistic paradigm for the creation and distribution of new money, namely Debt Only to Direct and Reciprocal Monetary Gifting via a program of strategically beneficial and efficacious policies.
All of your analyses are valid and potentially beneficial, that deserves praise…but they’re only reforms and so don’t COMPLETE the necessary action which is to implement a paradigm/ENTIRE pattern change…because historically everything adapts to a new paradigm…not the other way around. For example, Keynesianism was a very good reform, but what happened? Thats right it got morphed into the neo-classical synthesis…because it was only a good reform.
We don’t have the convenience of a lot of time to cogitate about whether or not we should analyze and swiftly form the mass movement necessary to implement the new paradigm. Look around and see the signs of social and political disintegration that are coalescing as well as the looming existential problem of climate change. I’m sure you’re concerned about these problems.
Paradigms/operant applied concepts and paradigm changes are not mysterious, mystical things. They are historical phenomena that can be analyzed so as to decipher the new concept that applied will result in all of the beneficial effects of same. In my book I have tried to cover the socio-economic, political, ecological and cultural policies needed in a new paradigm program, but I welcome any additional input.
I would be happy to send you a copy of the evolving book currently posted on Amazon for analysis and/or further elaboration. For god sake, something must happen to resolve the converging crises we are facing.
The quantity theory of money is shaky even within the current monetary paradigm of Debt Only and Burden to repay Only. If we integrated the new paradigm of Direct and Reciprocal Monetary Gifting strategically into the Debt On/Burden to Repay Only system…we could tremendously increase fiscal deficits which is a primary objective of MMT in order to renew America’s infrastructure and fund the mega-projects necessary to confront climate change, not to mention with the primary new paradigm policy of a 50% Discount/Rebate at retail sale, double everyone’s purchasing power, greatly increase demand for every enterprise’s goods and services and forever macro-economically end inflation.
These are immediate, universal (everyone participates in retail sale), empirical/mathematical, temporal universe effects. No other reform movement even comes close to creating so many beneficial effects. Why? For no other reason than that they aren’t analyzing on the paradigmatic level. They, we ALL, URGENTLY need to start doing so.
We will never have a rational and effective debate about resources until we resolve the monetary paradigm. In fact resolving it will immediately free us to utilize the above mega-fiscal deficits to do what we haven’t done for 50 years…confront climate change.
The clock is ticking on the disintegrative trend of human civilization and on the existential potential of unconfronted climate change. Focus on the core of the core economic problem, namely the current monetary paradigm and change it with the policy applications of the new one.
What MMT and other reform movements lack is an easily seen and directly experienced IMMEDIATE benefit to everyone. The old saw that people vote their pocket books is so true. So what if we implemented a $1000/mo. universal dividend for everyone 18 and older for life and paired that with a 50% Discount/Rebate policy at retail sale which would guarantee everyone $2000/mo. worth of purchasing power. That beats hell out of the one or two-off $1200 COVID Monetary Gifting checks. SHHHHH! Don’t even whisper those words…they might become an idea that not even Finance can resist.
Inflation? When you can buy $3.06/gal. gas at Sam’s club for $1.53 and buy a $60k Tesla for $30k…where’s the inflation there? And if any commercial agent tries to inflate just hit them with a 100% tax rate on any revenue they get from inflating their prices. When EVERYBODY just got a 100% increase in their purchasing power with the policies of the new paradigm they’re not going to look sanquinly on anti-social CEO’s that immediately try to erode it. Think about it.
I see that “government money” as either coin, notes or bonds is permanent. However, its such a small percentage of the total new money created that its largely macro-economically insignificant. So the problem remains the same, the huge percentage of Debt ONLY money created by the Banks. And the problem within the problem is that the current monopolistic paradigm for the creation and distribution of new money, again Debt ONLY as in Burden to Repay, is the deepest power of the Banks.
New paradigm concepts are illusive for numerous reasons (long term (unconscious) acculturation to the present paradigm, new paradigms are always in complete conceptual opposition to the present one making it very logically problematic and hence very risky for “authorities” to advocate for it, especially when you have the modern paradigm for inquiry being almost entirely Science Only (I’m absolutely for science by the way, but for open minded not settled/orthodox science, the former being the only kind of science that leads to scientific breakthrough). The list goes on, but the point (illusiveness) is made. Yet one cannot deny the historical fact that genuine new paradigms are extremely powerful and beneficial phenomena.
What is good is that theorists have indeed isolated and surrounded the areas of the problem. That problem being as Steve Keen himself has said is: “money, debt and banks”. Now if we just concentrate on the kernel/operant problematic concept and apply the fact that the new paradigm is always in complete conceptual opposition to the current/old paradigm…then voila! The opposing concept to monopoly debt ONLY as in burden to repay is what? That’s right, Monetary Gifting! What was it about the two COVID checks that prevented us from going into a depression? They were monetary gifts. What are fiscal deficits? Monetary gifts to individuals and government contractors. What is a job guarantee? A FREE FOR THE TAKING job. UBI/Universal dividend? A monetary gift. A 50% Discount (free gift of price) at retail sale that is rebated back to the merchant so they are not harmed by their discount to the consumer utilizing the exact same method that the banks use to dominate us (equal accounting entries creating money ONLY AS DEBT), and instead reciprocally GIFTING the total of their discounts back to the merchant. And what does this perfect policy expression of the new paradigm at the most efficaciously beneficial point in the entire economic process do? It macro-economically ends inflation forever by doing what all new paradigms do creating and implementing a concept that is the complete opposite of the old/current paradigm, i.e. Debt Only as in Burden to Repay to Direct and Reciprocal Monetary Gifting…and which resolves the biggest problem of the old/current paradigm, EROSIVE inflation with temporal universe BENEFICIAL deflation. Mind blowing! But just the routine effect of a genuine paradigm change.
SG: I wish you would reply to my comments. When people say that bonds are like money, they really mean that bonds are like money in some respects. I may be unusual, but that kind of thinking gets me wondering that if something is like money in some respects, but it is not money, then in what respects is it different from money. Surely you and Stephanie Kelton know the difference. Why pretend there is no answer to the question about what is the difference. The curious get suspicious when we detect a refusal to address all the aspects.. Some of us are able to think for ourselves and fill in the parts some MMT proponents refuse to admit.
This refusal on the part of some MMT proponents saddens me, because there are honest answers from MMT that could address these issues. Honest answers are more convincing to me than are evasions.
Me: Contemplate the word relevance, the intention to communicate the OPERANT/MOST IMPORTANT aspects of whatever is under discussion, and avoid committing what is meant in the following wisdom verse: “Ye blind guides, which strain at a gnat, and swallow a camel.”
SG:In other words you would rather ignore my remarks rather than address them. I don’t know why my remarks should be so scary that you are afraid to address them. My remarks were important enough that you had to disparage their relevance.
Me: Not correct. I answered your concern about the nitpick regarding the spelling out of the definitions of money which I believe has already been explained as: money is money readily free to be spent while bonds are investments of money and so they are at least once removed from money in hand.
Money IS the correct subject to analyze, the current operant concept/paradigm of new money is Debt as in Burden to Repay ONLY, and the new paradigm is Direct and Reciprocal Monetary Gifting.
Please analyze on that because the applications of the new paradigm, specifically the 50% Discount/Rebate policy at retail sale which is the very temporal universe expression of the new paradigm, destroy/make irrelevant virtually all of the orthodoxies, complexities and deepest problems of the old paradigm.
Yes, Inflation is the biggest bugaboo of economic theory. Resolve (PERMANENTLY) that issue and all of the goals and intentions of reformers become possible. Thats what a high percentage Discount/Rebate policy at the macro-economically strategic point of retail sale does!!! EVERYONE PARTICIPATES IN RETAIL SALE! HENCE A 50% DISCOUNT TO EVERY CONSUMER PRODUCT OR SERVICE FOREVER ENDS INFLATION. JUST KEEP LOOKING AT THAT AND DOING THE MATH OF A 50% REDUCTION OF RETAIL PRICE UNTIL YOU REALIZE ITS LIKE THE COPERNICAN COSMOLOGICAL PARADIGM CHANGE WHERE NOTHING MORE AND CERTAINLY NOTHING LESS THAN THE REALIZATION AND FACT THAT THE INVERSION OF THE POSITIONS OF THE EARTH AND THE SUN…CHANGED EVERYTHING!!!!!
Everybody, ya got that?! Ok, Then all you have to do is regulate with tax incentives and disincentives to insure commercial agents don’t just begin to erode the stability of it by practicing their hogwash “free” market “rights”. But consider this first. What if some anti-social CEO says: “Oh boy, tons of demand out there I’m going raise my prices 25%.” But what if just 1 of his competitors says to himself: “Hmm, maybe I’ll only raise my prices 2%” Just how much market share is CEO #2 going to take from #1? So there won’t be any high percentage inflation. Then you say: “Okay if anyone inflates even a little when their costs have actually been reduced (by other afore mentioned benefits of the new paradigm like the elimination of the payroll taxes every worker and every enterprise pay for welfare, unemployment insurance and even social security for instance, not to mention a huge increase in demand for your goods and services, and personal and corporate income tax reductions as well) we are taxing you at a rate of 100% on any revenue you may have garnered from such destabilizing price rises. You RIGOROUSLY enforce any price raising colution, and other measures mentioned in my book. Then, even if after all of these measures are enforced we still have 2-3% inflation then the discount/rebate percentage is just indexed to that rate…and no harm, no fuss.
The sun comes up the next day like it always does, but the nature of the monetary and economic systems are forever changed because a long standing monopolistic paradigm in those areas has been made that wildly benefits EVERYONE, EVERY ECONOMIC AGENT INDIVIDUAL AND COMMERCIAL AND EVERYONE FEELS IT MULTIPLE TIMES PER DAY RIGHT IN THEIR POCKETBOOK SOEVEN MORE SO THAN SOCIAL SECURITY THE NEW PARADIGM AND ITS POLICIES BECOME THE NEW THIRD RAIL THAT YOU ONLY HAVE TO TOUCH AND YOU’RE DEAD IF YOU’RE A POL.
The only additional thing needed is a mass movement created by a platform that can be relatively easily created in our technologically advanced mass communications systems. If you are young or have kids and grandkids you care about, then aren’t you tired of the litany of horrors and focus only on problems instead of solutions you constantly get from the main stream media that is consciously or unconsciously complicit in the lack of movement to address these issues??? Create the movement, ignore any resistance and communicate the benefits…and you can’t go wrong.
FF: With the implementation of a Job Gty, a tax regime should be implemented so that tax rates AUTOMATICALLY kick in if monthly inflation targets are reached. These should include:
a) Income Taxes,
b) Sales/VAT Taxes
c) Asset Value (or Wealth) Taxes
That’ll cool things off pronto.
Me: Paradigm changes are always accompanied by paradox. This is because they destroy orthodoxies. Once a 50% Discount/Rebate policy at retail sale and a universal dividend to every adult and are enacted almost all payroll taxes will be redundant and hence cancellable because inflation will have been ended permanently and no need for welfare or unemployment insurance with the dividend. A job guarantee aligns philosophically with the new paradigm of Monetary grace as in gifting and so could also be implemented. It’s just another one of the objectives of MMT that the new paradigm enables.