Amazon to publish Soft Currency Economics II
Posted by WARREN MOSLER on October 26th, 2012
The Center of the Universe
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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.-
MMT: Taxes function to regulate aggregate demand, and not to raise revenue per se.
Warren’s Book:
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The funds to pay taxes and buy government securities come from government spending.
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October 26th, 2012 at 9:47 am
is this a new text?
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y Reply:
October 26th, 2012 at 6:04 pm
ah, you mean second edition. OK.
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WARREN MOSLER Reply:
October 28th, 2012 at 2:58 am
no
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October 26th, 2012 at 12:46 pm
Will it be available in Kindle format?
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October 26th, 2012 at 4:59 pm
It’s available now (already on my iPhone) and only via Kindle. Prime clients can loan for free. Book only costs $2.99. Buy for others!
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October 26th, 2012 at 11:05 pm
Warren’s October 25, 2012 speech is in there: “Mosler Speech at Rome Debt Management Conference.”
Blew me away.
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Dan Reply:
October 27th, 2012 at 9:32 am
@MRW,
Where is there?
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MRW Reply:
October 27th, 2012 at 4:02 pm
@Dan,
At the back of the “Soft Currency Economics II” e-book. I think everyone should read the speech first then read the book. The speech is after the Conclusion chapter.
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October 27th, 2012 at 12:55 am
Erratum on the book so far:
Figures 3 and 4 should be rotated properly. Whoever did the e-book didn’t check it.
Warren, I thought the Fed DID pay interest on required reserve balances. You wrote, “Reserve requirements also result in an implicit tax on banks because reserves held at the Fed do not earn interest. Therefore, reserve requirements reduce the revenues of the member banks.”
Wasn’t that from your previous version of this article?
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WARREN MOSLER Reply:
October 28th, 2012 at 3:04 am
yes, 1994 probably
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MRW Reply:
October 28th, 2012 at 4:46 pm
@WARREN MOSLER,
Then you should add “(1994)” around these facts if you don’t want to rewrite it. The book starts out addressing 2012 (great job, BTW) and then slips into 18 years ago without notice, if you catch my drift.
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WARREN MOSLER Reply:
October 28th, 2012 at 4:55 pm
ok, haven’t read it yet, still in italy. home tues
MRW Reply:
October 28th, 2012 at 4:47 pm
@WARREN MOSLER,
And I would put your October 2012 speech up front. It’s killer.
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WARREN MOSLER Reply:
October 28th, 2012 at 4:56 pm
thanks, over to Michael
October 27th, 2012 at 8:46 am
Got my copy!
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Walid M Reply:
October 27th, 2012 at 6:46 pm
@Broll The American,
Great read Ty
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October 27th, 2012 at 4:23 pm
Erratum on the book so far:
Under the section Federal Government Spending, Borrowing, and Debt
The government spends money and then borrows what it does tax, because deficit spending, not offset by borrowing, would cause the fed funds rate to fall.
When it should read: …then borrows what it does not tax…
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WARREN MOSLER Reply:
October 28th, 2012 at 3:07 am
right, thanks!!!
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October 29th, 2012 at 10:23 am
I thought, fundamentally, (govt spending – taxes) went to private sector savings/wealth. Now you seem to be saying govt spending must equal taxes + govt borrowing as though it were a state govt. Very confusing for me.
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Nihat Reply:
October 29th, 2012 at 10:25 am
Shoot! That was meant to go under thread 7: Netbacker.
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Nihat Reply:
October 29th, 2012 at 12:39 pm
Hmmm! Is it that govt borrowing and non-govt saving are the same thing in the abstract?
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WARREN MOSLER Reply:
October 30th, 2012 at 7:35 am
yes. savings being net financial assets in this case
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WARREN MOSLER Reply:
October 30th, 2012 at 7:34 am
Congress had decided the US Tsy can’t have a negative balance in its fed account, so it sells tsy secs to comply with this Congressional mandate, and therefore taxes + tsy secs issued = total govt spending as a consequence of this institutional structure
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Nihat Reply:
October 30th, 2012 at 10:29 am
Alright, it’s a choice. Then, assuming no leakage in the equation, all growth has been made possible by govt borrowing, with no net money creation. This doesn’t strike me as a sustainable mode of operation, but what do I know? You are a patient teacher, thanks for that.
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WARREN MOSLER Reply:
October 30th, 2012 at 10:33 am
does’t read like you’ve read the 7dif on this website?
fiscal drag/unemployment is when the govt doesn’t spend enough to cover the need to pay its tax and accommodate an residual ‘savings desires’ (desire to accumulate net financial assets of that currency).
It’s best thought about removing drag, not adding stimulus.
Taxation causes drag equal to the tax + savings desires, which don’t otherwise exist.
Govt spending ‘offsets’ that drag
Nihat Reply:
October 30th, 2012 at 11:17 am
Haven’t finished it yet (felt diminishing returns half way thru; not your fault, I am the inpatient kind). With no prior knowledge of economics of any kind, it’ll probably take some time for me to sort things out. I had thought I understood your basic premise, but that didn’t keep me from making the above mistake. But I’ll get there.
MRW Reply:
October 30th, 2012 at 3:55 pm
@Nihat, The most important part of Warren’s 7dif book is the last section; namely, what you want the economy to do, what it can do. Do not be fooled by the apparent simplicity of the enumerated suggestions. He says in one sentence what financial writers waste feet saying. The issue is public purpose.
WARREN MOSLER Reply:
October 30th, 2012 at 4:06 pm
;)
Nihat Reply:
October 30th, 2012 at 5:12 pm
MRW, yeah, I’d had gotten that ‘public purpose’ thing right at the outset. As for simplicity, what can I say? Elegance is not for peasants to appreciate? :) (Well, I in fact appreciate it.)
PZ Reply:
November 1st, 2012 at 12:38 pm
@Nihat,
I think people imagine this closed money supply where if you borrow money someone else has less.
When in fact money to buy government bonds comes from government spending. Say, goverment deficit spends 100 billion, first it spends 100 billion, then (or simultaneously) it sells bonds worth 100 billion.
October 29th, 2012 at 4:07 pm
Please make this available as a pdf file. Paste a Paypal button there and charge the same $2.99 as for the Kindle. It would be nice for those of us outside the US to have a printable item.
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October 30th, 2012 at 8:30 am
@Warren,
OMG, how long does it take before banking your head against the proves it only hurts and doesn’t do anything good?
http://online.wsj.com/article/SB10001424052970204840504578088391565403564.html?mod=googlenews_wsj
How many years and rounds of QE have they done and still haven’t figured it out – insanity by definition.
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October 30th, 2012 at 1:43 pm
Got my Kindle version! Looks longer than the original, can’t wait to dig in.
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