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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Archive for April 6th, 2011

UMKC Honor Roll: MMT/PH.D Graduate Students

Posted by WARREN MOSLER on 6th April 2011

A very special thanks to all of you who help support our grad students.

As you can see from the attached list, many are now out spreading the word at the university level.

Also, Jim is still open to donations to the UMKC Ph.D program.

Hi Warren

I hope this finds you well.

I confess to exasperation with the economic nonsense about debt and deficits—and much else. I don’t know if its mendacity or stupidity—both perhaps. Those in office who know better, or should, are not stepping up and the steam roller moves on.

On a brighter note our department is a joy. The faculty are busy and doing good things and our students are the best ever. We now have 52 Ph.D. students, the largest program in the region, and have admitted several for next year. The masters program has 84 students, an all time high. The best master’s students often apply for the Ph.D. The faculty and students in our department have invested a great deal to build what we consider a highly successful program. I have attached a list of our Ph.D. graduates. You can see from the list they are doing well. Many are teaching and helping spread the ideas they learned at UMKC. They also send us students so we have a positive feedback going. With your support and intellectual commitment our department occupies an important spot in economics education.

Also I wanted you to know that 2011-12 will be my last year as chair. I am going to teach more and try to finish several papers and a book that have languished too long.

Warmest regards

Ph.D Grads

Willadee Waymeyer - Mid America Nazerene University
Jennifer Golec
Lana Ellis
Zarniah Hamid - University of Malayasia
Zohrah Nikina - University of California-Berkeley
Mutaz Nabulsi - Sprint Corporation
Nickolas Pologeorgous
Jason White – Northwest Missouri State University
Kurt Kruger – John Ward Associates
Doug Bowles - University of Missouri-Kansas City
Myles Gartland – Rockhurst University
Linwood Tauheed – University of Missouri-Kansas City
John Jumara – Park University
Robert Scott – Monmouth State
Jairo Parada – Colombia Federal University
Joelle Leclaire – Buffalo State University
Eric Tymoigne – Lewis and Clark College
Fadell Kaboub – Denison College
Robert Spalding – U.S. Air Force
Zadravka Todorova – Wright State University
Doug Meador – St. Francis University
Yan Liang – Willamette University
Ta He Jo – Buffalo State University
Linda Hauner – Commerce bank
David Harris – Benedictine College
Pavlina Tcherneva – Franklin & Marshall College
Michael Murray – Central College, Iowa
Jeremy O’Connor – Rockhurst University
Felipe Rezende – Hobart & William Smith
Flavia Dantes – Cortland College, New York

Posted in Uncategorized | 12 Comments »

Wray- the currency as a public monopoly

Posted by WARREN MOSLER on 6th April 2011

Good to see this- been suggesting it for quite a while.

Working Paper No. 658, March 2011

Keynes after 75 Years: Rethinking Money as a Public Monopoly

L. Randall Wray

Economists and government policymakers fail to recognize that money is a public monopoly. The result of this misunderstanding is unemployment and inflation, says Senior Scholar L. Randall Wray. The best way to operate a money monopoly is to set the “price” and let the “quantity” float, as exemplified by Hyman P. Minsky’s universal employer-of-last-resort program.

Understanding how a monopoly money works would advance public policy formation a great deal, says Wray. And since banks are given the power to issue government money, failure to constrain what they purchase fuels speculative bubbles that are ultimately followed by a crash. The real debate should be over the proper role of government—how it should use the monetary system to achieve the public purpose.

In this paper I first provide an overview of alternative approaches to money, contrasting the orthodox approach, in which money is neutral, at least in the long run; and the MarxVeblen-Keynes approach, or the monetary theory of production. I then focus in more detail on two main categories: the orthodox approach that views money as an efficiency enhancing innovation of markets, and the Chartalist approach that defines money as a creature of the state. As the state’s “creature,” money should be seen as a public monopoly. I then move on to the implications of viewing money as a public monopoly and link that view back to Keynes, arguing that extending Keynes along these lines would bring his theory up to date.

Posted in Currencies, Government Spending | 81 Comments »

Repost of my press release from August 2010

Posted by WARREN MOSLER on 6th April 2011

Unfortunately it’s unfolding as feared.


Tea Party’s Economic Agenda Would Cause Next Great Depression
Says Former Tea Party Democrat

Waterbury, CT – August 30, 2010, Warren Mosler, Independent candidate for US Senate, former Tea Party Democrat, and frequent speaker at Tea Party rallies, lashed out today at the political movement for its ill-thought demands to balance the budget which he contends is based on abject ignorance and counter to true Tea Party values. “The Tea Party’s demands to balance the budget and reduce the Federal deficit aren’t merely misguided, but dangerous, and would cause the worst depression in history,” stated Mosler, a financial expert with 37 years of experience in monetary operations. “I have been, and continue to be, a strong supporter of the core Tea Party values of lower taxes, limited government, competitive market solutions, and a return to personal responsibility. However, their proposals to balance the budget are the same suicidal policies that caused the 6 horrible depressions in the U.S. over the past 200 years. At the worst possible time to take money out of the economy, the Tea Party’s proposals would remove an estimated $1 trillion and cause the worst depression in world history, destroying tens of millions of jobs and ruining our children’s future.”

Explanation of the Modern Monetary System
Modern money, after the demise of the gold standard, is akin to a spreadsheet that simply works by computer. As Fed Chairman Bernanke explained on national television on 60 minutes, when the government spends or lends, it does so by adding numbers to private bank accounts. When it taxes, it marks those same accounts down. When it borrows, it simply shifts funds from a demand deposit (called a reserve account) at the Fed to a savings account (called a securities account) at the Fed. The money government spends doesn’t come from anywhere, and it doesn’t cost anything to produce. The government therefore cannot run out of money, nor does it need to borrow from the likes of China to finance anything. To better understand this, think about when a football team kicks a field goal; the number on the scoreboard goes from 0 to 3. Does anyone wonder where the stadium got those 3 points, or demand that the stadium keep a reserve of points in a “lock box”?

Moreover, government deficits ADD to our savings – to the penny – as a fact of accounting, not theory or philosophy. This means the Mosler payroll tax (FICA) holiday will directly increase incomes and savings, thus fixing the economy from the bottom up. For example, if the Mosler tax cut amounts to $20 billion per week, that will be the exact increase in income and savings for the rest of us as anyone in the Congressional Budget Office will confirm. For the Federal government, taxes don’t serve to collect revenue but are more like a thermostat that controls the temperature of the economy. When it is too hot, raising taxes will cool it down. And in this ice-cold economy, a very large tax cut is needed to warm the economy back up to operating temperature.

While Mosler fully supports the Tea Party desire to cut taxes, and recognizes the need to cut wasteful and unnecessary spending – in fact, his economic proposals will save the government hundreds of billions of dollars of unnecessary interest expense – he also recognizes that tax cuts have to be much larger than spending cuts in order to ensure that less money is taken out of the economy, and not more as the Tea Party is currently demanding.

About Warren Mosler
Warren Mosler is running as an Independent. His populist economic message features: 1) a full payroll tax (FICA) holiday so that people working for a living can afford to buy the goods and services they produce. 2) $500 per capita Federal revenue distribution for the states 3) An $8/hr federally funded job to anyone willing and able to work to facilitate the transition from unemployment to private sector employment. He has also pledged never to vote for cuts in Social Security payments or benefits. Warren is a native of Manchester, Conn., where his father worked in a small insurance office and his mother was a night-shift nurse. After graduating from the University of Connecticut (BA Economics, 1971), and working on financial trading desks in NYC and Chicago, Warren started his current investment firm in 1982. For the last twenty years, Warren has also been involved in the academic community, publishing numerous journal articles, and giving conference presentations around the globe. Mosler’s new book “The 7 Deadly Innocent Frauds of Economic Policy” is a non technical guide to the actual workings of the monetary system and exposes the most commonly held misconceptions. He also founded Mosler Automotive, which builds the Mosler MT900, the world’s top performance car that also gets 30 mpg at 55 mph.
Learn more at

Media Contact:
Will Thompson
(267) 221-6056

Posted in Deficit, Government Spending | 12 Comments »