Comments on: Response to Dem debate

By: Ralph Musgrave

Ralph Musgrave — Wed, 07 Sep 2011 10:51:22 +0000

@John O'Connell, Agreed. Importing stuff from China in exchange for an ever expanding stock of dollars or Treasuries held by the Chinese benefits today’s US citizens. But as you say, there is a POTENTIAL cost to future US citizens if the Chinese decide to spend these dollars on stuff made in the US and shipped back to China.

By: WARREN MOSLER

WARREN MOSLER — Wed, 07 Sep 2011 10:44:39 +0000

or, if, when the Chinese do come in and spend their hoard, it’s a one time relative value shift and not inflation that does reduce our domestic consumption until they run out of dollars and the trade surplus goes away.

however, there are things we can do to reduce our real exports when the time comes, such as direct and indirect export taxes and other measures to reduce the foreign purchasing power of our output.

By: John O'Connell

John O'Connell — Tue, 06 Sep 2011 19:55:43 +0000

@Ankur Patel, Ankur, read Warren's "mandatory readings". Most of the answers to your questions are there.

By: John O'Connell

John O'Connell — Tue, 06 Sep 2011 18:57:15 +0000

@Ralph Musgrave,

Or else, if MMT is adopted and it works, and the US is at full employment when the Chinese decide to cash in their Treasuries and buy US products, then they will have to bid up prices in order to acquire the goods, i.e., inflation.

Unless the government responds quickly by raising taxes (by the same amount that China is buying goods), in order to maintain aggregate demand and prevent the inflation.

Imports are a benefit to the society, and exports a detriment. When the Chinese decide they want to reverse the situation, the party (for us) is over, no?

In that sense, are not our current trade and budget deficits consuming our children’s production, in the sense that what we consume today from abroad will have to be produced by them and sent abroad? OK, only maybe, but at the option of those who export to us now? Not under our control?

By: Ankur Patel

Ankur Patel — Tue, 03 May 2011 00:43:27 +0000

@Ankur Patel, *not being critical

By: Ankur Patel

Ankur Patel — Tue, 03 May 2011 00:43:01 +0000

@Ankur Patel, Also, im being critical, im just confused about what you, L.Randall Wray, and others have been proposing

By: Ankur Patel

Ankur Patel — Tue, 03 May 2011 00:39:35 +0000

@WARREN MOSLER, I am a high school student trying to wrap my head around this. This is what i understand:
When the government sells bonds, it takes money out of the private sector.
When the government buys bonds from the private sector, it is injecting money into the private sector.
I understand what a reserve requirement is by a central bank, and the discount and support rates.
I understand the basics behind Keynesianism- that demand determines supply, and that that govt spending and tax cuts can bring up demand in economic downturns.
I have tried to read New Economic Perspectives, and i understand what a floating and sovereign currency is, but i don’t know what they mean by non-convertible.
We are no longer on the gold standard.
Here are my questions/concerns:
Why are we not operationally constrained by revenue? If China or people in our country buy bonds so the government can get money, then wouldn’t there be a point where we would have to repay the principals on the bonds (with interest)? Why is it better to have short term bonds instead of long-term ones? Doesn’t growing the national debt devalue the dollar (and i understand that having a very strong or very weak currency can be bad, but is there reason to be worried because a weaker dollar will cause more expensive imports?) I have often heard people like Ron Paul say that when the Fed prints money, we raise the price of imported oil- is it true? I read that MMT challenges the traditional view on imports and exports by favoring imports and claiming that exports are bad-why? I have been leaning towards Keynesian and Post-Keynesian ideas because i have grown frustrated with the current austerity rhetoric, and MMT seems appealing, but i can’t grasp the concepts. Could you or someone else knowledgeable in MMT help me?

By: NYSTOCKGURU

NYSTOCKGURU — Fri, 21 Jan 2011 04:54:02 +0000

With the FDIC playing wolf looking for weakest sheep in the flock… What chance do you think Citigroup has?

The SPIC hasn’t even blinked.

In my opinion, the systemic risks associated with Citigroup now trading under $5 / share and Trevis analysts valuing C at $4.17 / share are grave if earnings don’t materialize.

The breakup value of this company is higher than its current market-cap anyway right?

By: ESM

ESM — Mon, 10 Jan 2011 15:07:03 +0000

“So if you bankster dude’s can just deflect attention for 3 years you are off da hook? But Roman Polanski has hillary clinton chasing him 30 years later because he got some sex? Are you FREAKING KIDDING ME?!?!?”

Straw,

You appear to misunderstand the logic behind statutes of limitation. They have not been promulgated according to some weird system of justice where the severity of a crime fades with time, or in which a criminal is rewarded for his skill or luck in evading prosecution or capture. The primary reason for such statutes is that the evidence degrades with time, in particular the evidence that a defendant might be able to muster in his defense. Documents get lost, memories fade, eyewitnesses die, etc. A secondary reason is that even the threat or risk of prosecution can be damaging, especially to somebody engaged in business. A potential defendant essentially has a right to demand that the authorities either move ahead with a case or clear the record. The same kind of logic drives the requirement that charges be brought in a timely manner against somebody who has been arrested.

In the case of Roman Polanski, the trial was over. He simply became a fugitive when he got wind of the fact that the judge would sentence him to jail time. There is obviously no statute of limitation which would or should apply.

By: WARREN MOSLER

WARREN MOSLER — Mon, 10 Jan 2011 01:12:25 +0000

Independent Party candidate for US Senate.

Got about 1%