Comments on: Q&A

By: WARREN MOSLER

WARREN MOSLER — Wed, 21 Dec 2011 18:09:41 +0000

the inherent reason for paying interest is to support the term structure of rates

see ‘soft currency economics’ on this website

By: WARREN MOSLER

WARREN MOSLER — Wed, 21 Dec 2011 18:08:51 +0000

MMT is about value theory with the currency a public monopoly

By: jean-marie

jean-marie — Tue, 20 Dec 2011 22:04:10 +0000

Another question…
In the moneycreation-proces. What is the percentage of money that the government issues ( I guess it must be public funding because in private creation it is mostly always with interest) on with it does not have to pay interest? Is there any statistics on that … for USA or Europe?
thx already

By: jean-marie

jean-marie — Tue, 20 Dec 2011 21:54:56 +0000

@jean-marie,
OK. I’m reading up on that one. I wonder… Does anyone of you know if there is a neo-marxian translation done to MMT.I mean : to give a MMT technical explanation of the ideas in neo-marxian tradition. Both theories (and others) being non-mainstream…compared to a neo-liberal theory… I would be very interest in that ;-)

By: John O'Connell

John O'Connell — Tue, 20 Dec 2011 16:22:09 +0000

@Butch Busselle, Perhaps, in the long run, but in any given finite period the government can run a budget surplus, and the excess of taxes over spending in that period comes from the accumulated savings of the non-government sector, from prior periods. And that might be from dissaving of the foreign sector just as well as from the domestic sector, i.e. a trade surplus.

By: WARREN MOSLER

WARREN MOSLER — Tue, 20 Dec 2011 14:53:03 +0000

agreed.

By: Hugo Heden

Hugo Heden — Tue, 20 Dec 2011 06:21:40 +0000

@jean-marie,

Regarding rich-poor-divisions:

Ok. Say that there is no new net financial assets injected from the outside the private sector. Also, say that some agents accumulate financial assets (they don’t spend all their income).

The system can still “get started”! All that is needed is that other agents spend **more** than their income. They can do that by running down previously accumulated wealth, or increasing their debt levels, perhaps using real wealth as collateral – perhaps supported by increasing asset prices. Think American households and the housing bubble.

This is not a healthy strategy though. The aggregate private sector balance sheet expands like a balloon from thin air. Eventually, debtors will be unable to service their debt using their income (which we assume remains constant). No more debt can be taken on.

A better strategy is for the government to *accommodate* for the private net saving desires by injecting new net financial assets – deficit spending.

By: WARREN MOSLER

WARREN MOSLER — Tue, 20 Dec 2011 01:01:11 +0000

have you seen ‘soft currency economics’ on this website?

By: jean-marie

jean-marie — Mon, 19 Dec 2011 21:48:18 +0000

@WARREN MOSLER, Another question after reading a bit more… If one needs a external injector(government)of ‘missing’ money to equal the balance would that not mean also that the government just has to put the money in there without asking more back? Because the moment that the government puts it in there through the banks and interest has to be paid to the bank(difference between ‘printing money and distributing it’ or ‘bonds in which the government has to pay extra interest’)… at that moment does not the government become part of the internal system and is not external anymore? Hope I make myself clear…

By: jean-marie

jean-marie — Mon, 19 Dec 2011 19:19:32 +0000

@jean-marie,
@hugo OK. Thanks for the step-by-step.If you create 100 and you nobody saves part of it or “pulls it out of circulation” then the 100 can go on circulating. And like you explained somewhere else if the banks asks interest the system is also screwed or it should get ‘injected’ from outside the system.
@neil so then ‘turnover’ is all the profit that that original 100 gets you? Off to look at that video…
thx already all. Still nags me though my original example.