Frightening response by Biden’s economic advisor.

This is stupid. Just a quick brainache. There has been wise economic stewardship in this administration. If he was truly mentally deficient, he'd be a Republican

 

Could we have some context of what they are even talking about? When the lady says why don’t we borrow our own currency, I have no idea exactly what she is asking. If we had more of the clip it would probably inform us.

 

You are if all the other evidence is to the contrary. But then that would require basic critical thinking that is beyond the ability of a current conservative

 

Ever heard Trump talk?

 

So I looked up the woman and she is a major proponent of MMT. My limited understanding of MMT is it’s Keynesianism on steroids. Deficits don’t matter. You just keep running deficits and borrowing more and more until you get inflation then you stop.

The problem with this is what happened with Covid. At some level of borrowing you do get inflation, but then inflation tends to be persistent. There are significant lags between the borrowing and when it flows through the economy and inflation hits. By the time inflation hits the damage has been done and it isn’t easy to reverse.

Plus it doesn’t acknowledge the political reality that once you start deficit spending, politically you just can’t stop.

 

I hate to hear him talk, not just because of what he says, but because he's always mashing something invisible in front of him with his hands when he talks. It's possible that he actually thinks there's something there, like he's groping a woman that only he with his godlike vision can see.

 

Come on, it’s not about Trump. But I also don’t think you can judge our economic policy making based on that short clip

 

I mean come on… any of us that have worked for a long time and present to groups of people have flubbed an answer or three. My goodness.

All this handwringing about the economy when the economy under Biden has had been just as good if not better than the last administration is also pretty silly.

 

Poor Keynes. Literally one of the most small gov people who ever lived. So misunderstood.

 

Another moron in an administration full of morons.....

 

The question (Why do we borrow our own currency?) doesn't make much sense to me either. Printing money is only the first step. You have to put that money into the money supply by spending it. So I'm struggling to understand what she thinks the alternative is?

If her question is asking why when we spend money do we mark it down as borrowing against some existing pot of money (like social security), my best guess is it's an accounting practice to keep track of spending. But I don't know the answer to that question. Maybe @docspor does. I'm not an economist.

EDIT: My best guess is she's making arguments that are from her book:
Book Review: The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy by Stephanie Kelton

 

If this is a very basic economic question, can you give us the correct answer?

 

Who are some of the other morons?

 

I just read that. First it was June 2020, so it obviously doesn’t address the following inflation caused by massive deficit spending (among other things )

It just seems really simplistic to me. Her intro has a lot of red herrings. Most economists to think deficit spending in the proper situation and priorities can be a good thing. Only right wing politicians argue otherwise.

The difference with MMT is they basically spend and borrow until the shit hits the fan and adapt. As I mentioned that approach completely ignores the way the spending cycle and political cycle works.

A lot of mainstream economists struggle with MMT. It is just so simplistic it leaves them speechless. Then they frame it with odd questions and cherry pick the reaction to score points.

 

Would you agree that Keynesianism decades after Keynes became more exaggerated than what Keynes’s espoused? And now MMT has stepped it up to another level.

Keynes - deficit spending in recessions is good, and should be followed by surpluses during prosperity

Modern day Keynesians - deficits should be large enough to fully replace demand during downturns, and deficits should decrease during prosperity.

MMT - deficit spend, regardless. Deficits can be as large as you want, until you hit inflation, then increase taxes (in other words speed 100mph over a cliff and then hit the brakes)

 

We had to read Kelton here at War College. I’m floored by her logic that you can just print (or digitally manifest) currency to whatever extent you want until you physically run out of the resources you are trying to buy or you hit inflation. She says we’re just “thinking about it the wrong way.” To me, that shows she doesn’t understand the very basic concept of currency as a medium to exchange goods and services. By her logic, we can drink untreated water, and the obstacle to drinking such water is purely mental. The only problem that might occur if you drink the water is cholera or a host of other waterborne diseases, but then you just treat those diseases. Problem solved. Drink up.

 

Do any of you even have a clue what is being discussed here? Did you realize that the lady in the video is a Bernie Sanders advisor?