MMT

Lopsided_Life_6054

I’m kinda sure MMT is pseudoscience

drewshaver

I'm not opposed to a multiple cause argument, although I do think that the primary driver was and still is wanton money printing. Wages are slow to catch up to inflation because of the sticky nature of a job. It also seems weird to me that QuantitySubject left out the monetary explanation, while offering quips that sound like MMT malarky (imo) We are in the Bitcoin subreddit where I would expect more awareness regarding the monetary system

CriticalPathStrategy

In economic theories (like Keynesianism and MMT) you can't have bitcoin replacing fiat money, because it is scarce. The very thing most people like about it goes against macroeconomic principles. One way to avoid a downward spiral in the economy is to generate demand by public spending in economic downturn/crisis. This is called anti-cyclical economics. In other words by printing money you can save jobs In MMT theory, money printing doesn't directly cause inflation, and the the sole purpuse of taxes is that you have to use the currency that is required for paying taxes. With this logic you can print and spend as much money as you want as long as you dont create inflation with it. This is an EXTREMELY simplistic explanation! Long story short Bitcoin is great investment because its scarce but not a money replacement.

kaiise

pseudoleft == climate change conformity, post OCCUpy alliance iwth central banking etc which has had its own smear campaign against bitcoin and using mining and CHINA CHUNA etc as a boogieman. ignorant of any thing outside of urban idpolbubble incl. MMT ​ shitlibs: basically left aesthetic neocons so dont like anything that challenges centrist war machine platform or helps "china" etc etc ​ and most reddoitards are just sheep anyway, this is where dogecoin and Buttcoin memes syarted . dogecoin was an ignorant joke until it wasnt then those asshoels osld out lol

soma92oc

I would classify MMT as a dangerous over-simplification of some fundamental Keynesian ideas, with some extra magic. Supply and demand are extremely important obviously, but this framework is based on perfect information and purely rational actors. Pricing, and particularly pricing on a market level, is far far more messy and nuanced. Yup. Was a huge Ludwig Von Mises stan too back in the day too. Austrian school ideas tend to be "aesthetic" and attractive, but not terribly descriptive in real world application... which is why most economists are some flavor of Keynesian today. There are obviously some practicing Austrian and Marxist economists, but I have only ever seen a few in the wild.

beyond_the_obvious

Keynesianism was the term, right. MMT is still a derivation of it, right? Ask yourself what determines the price of something. It's basically always supply and demand. Have you ever studied Carl Menger or Friedrich August von Hayek?

soma92oc

Also wrong again. MMT is a niche emergent school that most economists don't take seriously. Most economists are Keynesians, and they don't think the money supply is the predominant driver of inflation. How many meta analyses have you read in the past year on the subject? What is your evidence for it being "supply and demand". I'm sure once you provide your proof, you'll be a Nobel Laureate.

beyond_the_obvious

If you think that increasing the money supply does not lead to inflation you follow the MMT (modern money theory) It's supply and demand. Read up on Austrian economics.

lurker_lurks

MMT is a ponzi scam.

hamta_ball

The Keynesian/MMT assumption that people wouldn't spend their money/wealth without inflation is ridiculous. Suppose we had a deflationary money. I'd argue that people would still spend money. You need things. I need things. You want things. I want things. The coincidence of wants will continue to exist. Many people have a hard time saving money already due to frivolous spending. What makes you (not you specially) that a deflationary spending would all of the sudden cause people to stop spending frivolously? You already see people opting to buy things now rather than waiting for a coupon/sale/etc. Many people have high time preferences, and I don't think a fixed money supply would change this. Now suppose that, indeed, a deflationary money did cause people to spend less. Is that really bad? That would force companies, and people in general, to become even more productive in order to incentivize spending. This could limit the existence of "fast fashion" like companies (fast tech, fast automobiles, fadt-etc). You'd have to come up with a product or service that is exceptional for one to spend their money and in return, for the company to make more money and increase wealth. Maybe I'm dumb. ¯\_(ツ)_/¯

ST-Fish

Randomly burning down 1% of all real estate every year would probably increase demand in real estate and increase the amount of buildings getting constructed. But putting in a policy to deliberately burn down a random 1% of houses wouldn't go down well with anyone. But burning down 2-5% of the value of your money seems not only normal, but needed, so you can't imagine a world in which that's not the case. I'm sure that after a couple hundred of years of the yearly house burn people like you would ask "how would the real estate market work without burning a couple % of houses a year"? The question seems ridiculous to us now, the same way your question about inflation is ridiculous. The concept that people and businesses won't spend money because their money will not get less valuable by 2-3% is straight up ridiculous, and we have a long history of currencies tied to the gold standard that didn't result in the fabled deflationary spiral. The issue is that our current global economy is built on debt, and the assumption of inflation, so all the debt created was created thinking it will be paid with future cheap money. There will need to be a culling, but we'll be in a better place afterwards. MMT is a fraud.

mindlesstosser

MMT is a Modern Monetary Theory?

HCheong

Market makers are another term for market manipulators. Every creation of **NEW** money supply should have sufficient collateral in place, or else it would be like what those banks are doing with their fractional reserve fake banking whereby the modern monetary theory (MMT) does not even have any reserve at all. In other words, we can't be sure if someone is printing money out of thin air to buy up everyone else's ownership.

disco-cone

Your 'deposit' is a liability - when you transfer this out of the bank they will get back and equal amount of settlement currency - if the person that sold the bitcoin is going to withdraw that fiat to another bank. If all of krakens customers are banked by the big 4 it doesn't change anything for them. go and learn MMT

Walternotwalter

What is the counterpoint if this lacks neutrality? MMT? I am well-versed on how that works. I favor a hard asset over a malleable social construct.

TropicalBlueMR2

​ MMT'ers, i read it, it was a curiosity. It's like, a bowling alley can't run out of points. Well, technically if a government issues its own currency, it can't run out of units of that currency. So, they figured in place of taxes/distributing those taxes to address public needs...they could just print money/or US Treasury debt, and assign it where it needs to go as a powerful tool to enact actions on policies. And so long as people accepted their money/treasuries as payments, hypothetically an issuer of a very strong global reserve currency could do this ad-infinitum? Obviously, I don't think the historical record backs that idea up at all. I'm no economist, but it comes off as some kind of rebranded financial chicanery that has cratered empires in the past (Rome's watered down silver currency, South Seas Bubble, Mississippi Bubble).

TropicalBlueMR2

To answer your edited question, on monetary theory between MMT vs Keynes, you are closer to siding with Keynes, and deeply critical of MMT. Frankly, I share in your criticisms, but you need to quit calling MMT as Keynes. Here are other economists who share in your criticism of MMT: "Whereas former Federal Reserve (Fed) Chair Janet Yellen believes MMT authors to be‘confused’ (Curran 2019) and European Central Bank (ECB) President Christine Lagarde (2019) interprets MMT as relevant only in times of deflation, Rogoff (2019) and Summers (2019) classify the ideas of MMT-ers as dangerous. Peter Bofinger (2019) and Brad DeLong (2019) represent a small minority among economists with a cautiously positive attitude towards MMT. From a monetary Keynesian perspective, the key flaw of MMT lies in failing to properly account for the pivotal role of money in regulating the economy (Riese 1995)."

TropicalBlueMR2

To me that sounds more like a charge against MMT than Keynes. "Whereas monetary Keynesian theory implies that economic policy is considerably constrained by market forces, MMT considers economic policy to be all-powerful and able to ensure full employment." **"MMT economists polarize by arguing that a state with its own currency has ‘no budget constraint’ (Mitchell et al. 2019: 13) and a modern state could ‘never have a solvency problem’ (Kelton 2019).1"** That's where my divide is with people who attack MMT, but then for some reason call it Keynes, where they're not opposed to Keynes at all, they're opposed to MMT but they don't know it.

Grp8pe88

yeah, this generation would faint if you told them to put a shoulder length glove on cause we need to help the calf! LOL! Grew up in a farming heartland of this country, getting more and more leery about being in such a large city as a supposed adult. Ventured out the other night, and I can tell you I did not feel like I was in the country I grew up in. English was the minority language spoken in a couple of big box retail outlets. Shockingly, regarding the financial system, there's a large number of individuals that have subscribed to this whole MMT(Modern Money Theory) BS. I never did, and it's caused me to blow my trading accounts up more than once already. Been told numerous times not to fight the Fed., but I don't seem to learn. Glutton for punishment, I guess. heh! Preparation in a city is enough gold, silver copper and steel to get you to your stores on the outskirts. Interesting times man! God speed!

Fit_Psychology_1536

You make a great bitcoiner: zero depth of knowledge - solely relying on chatgpt and trust-me-bro. We agree MMT is poorly thought out idea but you saying the math works out is false. There's no associated math with MMT. If you don't believe me, ask chatgpt.  And my username was auto generated. 

bjuffgu

I think that the reality is that MMT technically doesn't cause inflation. Only because technology is inherently deflationary and therefore MMT can be used to offset that deflation (which the Keynsians) are terrified of and getbus to the 2% inflation they crave. Jeff Booth is great at explaining this. There is, therefore, at least some math to back up MMT that if technology is contributing say -5% deflation a year, if MMT can increase inflation by say 7% per year, the Keynsians can use MMT to get to their magic 2% inflation. Without it, we'd be in deflation. It also has the added bonus of letting government do what they love; print money to give to their friends while virtue signalling about how much good they're doing for the world.

BigGaynk

Corporate welfare will always exist one way or another so long as corporate entities exist like they do today, the other option would be "Wait for the market to fix it". Sometimes problems require solutions today, even if they're not the best, such as roads and maintenance. MMT works because public projects always need funding or are you going to wait for google-streets? apple iRoads?

myhappytransition

>mmt isn't bad or wrong, "print-to-spend" works, Uh, no. MMT is bad and wrong. "print-to-spend" does not work. Its just welfare for billionaires.

EASt9198

You don’t seem to be driven by curiosity and truth but rather political belief. I like Bernie sanders and what he stands for, irrespective of the fact he might be misguided about MMT. Sorry but I don’t feel like replacing the education (that probably isn’t even worth it) for you here, so here goes Chad: Certainly! Let's delve deeper into the quantitative concepts behind the key principles of Modern Monetary Theory (MMT): 1. **Functional Finance**: - **Government Spending Multiplier**: MMT emphasizes that government spending can stimulate economic activity, leading to a multiplier effect. The quantitative concept here is the multiplier, which represents the ratio of the change in national income to the initial change in government spending. - **Tax Impact on Aggregate Demand**: MMT considers taxation not only as a revenue-raising tool but also as a means to regulate aggregate demand. By adjusting tax rates, the government can influence disposable income and consumption behavior, thus affecting economic activity. 2. **Sectoral Balances**: - **National Income Accounting**: MMT relies on national income accounting to analyze the relationships between the public, private, and external sectors. Quantitative measures such as Gross Domestic Product (GDP), national income, and net exports are used to assess sectoral balances and their implications for the economy. - **Saving-Investment Identity**: MMT emphasizes the identity between savings and investment in an economy. Quantitatively, this identity implies that total saving equals total investment, where saving represents the portion of income not spent on consumption and investment refers to expenditures on goods and services that contribute to future production. 3. **Stock-Flow Consistency**: - **Flow of Funds Analysis**: MMT employs flow of funds analysis to ensure consistency between the stocks and flows of money in an economic system. This involves tracking the flow of money between different sectors over time, accounting for changes in assets, liabilities, and net worth. - **Government Budget Constraints**: MMT recognizes that government spending creates money, while taxation and bond sales drain money from the economy. Quantitative analysis of government budget constraints involves examining the impact of fiscal policies on the money supply, inflation, and interest rates. 4. **Chartalism**: - **State Theory of Money**: Quantitatively, Chartalism asserts that the value of money is derived from its acceptance as a medium of exchange and a unit of account within a specific political jurisdiction. This acceptance is reinforced by the government's ability to impose taxes and other obligations payable only in its currency, creating demand for the currency. 5. **Functional Forms of Money**: - **Money Supply Measures**: MMT considers various forms of money, including currency, demand deposits, and other liquid assets, in its analysis. Quantitative measures such as M1, M2, and M3 are used to assess the supply of money in the economy and its implications for economic activity and price levels. These quantitative concepts provide the analytical framework for understanding and applying the principles of Modern Monetary Theory in economic analysis and policy formulation.

Fit_Psychology_1536

MMT doesn't have an associated equation or "math" to back it up. It's purely a belief that government priting doesn't directly cause inflation. It's not even widely accepted by politicians, other than the 4 in the squad + Burnie Sanders Help me understand the "mathematical reasoning" you're referring to with MMT

nottobetakenesrsly

Austrians aren't right, neither are classicalists, neo-classicalists, keynesians, monetarists, chartalists, or MMT'ers. At best, they may have contributed a theory here or there, but none of the economic schools of thought come close to offering a fulsome explanation of how money works/evolves... let alone the dynamics of an economy.

EASt9198

Man it’s a tedious process. I was part of the generation that was brought up on MMT and the mathematical reasoning there seemed to make so much sense. Many people are too proud that the reality is much simpler than they like to believe and therefore cannot accept that this system is broken. Even in the financial world where you’d assume financial literacy is high, many just follow what they are thought rather than thinking for themselves…

pshepps

It will be a world currency because of its deflationary characteristics. Get your head out of the MMT way of thinking...

Michael__X

Economics and Science are two different disciplines. Picking mass as the sole value of everything is completely arbitrary hence why MMT factors in needs and wants. The question in the Wagyu example is flawed to begin with because the mass of something isn't entirely where it's value is derived from. Whether someone specifically needs wagyu is very much a subjective thing based on multiple factors. You don't go into a store and say "I want 7KG of groceries, there's multiple things to take into account outside of mass that are too many to list. Floating currencies exist today because Gold can't adjust to supply shocks quickly enough. People have to actually get it out the ground, infrastructure has to be built and it has to be found. That doesn't happen overnight. Basing an economy on that leads to deflation as we've seen multiple times throughout history hence why nobody uses it as primary currency.

InsideCold

Ha, yeah. I just tell people that I prefer the Austrian model because it has a better track record for prediction inflation. If they ask what it is, I give a very basic explanation of the relationship between money supply and the value of that money (plus velocity of money). They usually start reciting some MMT bullshit about how that’s been disproven, and I ask them why economists were so blindsided by the inflation we’re experiencing. Then I ask why the same thing happened in the 70’s after the money supply increased to fund Viet Nam. I haven’t gotten a solid answer yet. I don’t always get agreement, but it does get people thinking.

Narrow_Elk6755

Listen to the MMT wackadoodles, they are a symptom of trying to use the government as an blunt instrument, ruining the system in the process.

DoinIt989

No, they don't want financial liberation at all. They'd like a *national* bank. And for a while, "MMT" was incredibly popular on the left, which is basically the idea that the government should just print as much money as possible and then raise taxes to handle inflation.

Wise-Application-144

I love that sub because it's basically just dipshits stumbling upon discredited economic models from first principles - in this case they've discovered MMT. What they fail to realise is that if deflation means the economy grinds to a halt because people don't buy stuff because they can get it cheaper in the future, why doesn't it work the same way in reverse? In an inflationary environment, why don't businesses stop producing, because they can just wait for prices to rise and sell their goods at a higher price in the future? With inflation at 10% last year, why was Starbucks bothering to sell any coffees? Why not just wait a year and then get an instant 10% revenue boost? ​ Bet they can't answer that.

Mawx

This is nonsensical. Bitcoin will never top out in comparison to USD unless it is replaced by something else or faith dissappears. USD is an inflating fiat currency. It will continue to inflate. Even if btc value is stable, the price of a btc in usd will go up. Unless things are priced in Satoshi, btc will always be seen an "appreciating" asset in comparison to a MMT currency.

benhammy

In a hypothetical economy where we all drop the charade that fiat currencies are scarce, and we just print the money to do what we want, I’m confused as to who you think will gladly accept the fiat currency. Most of the humans who build those roads, combat climate change, and do all the infrastructure stuff you’re thinking of also want to get paid in a money that holds its value. Businesses set prices for their goods and services in terms of how to stay in business. If we all culturally decide to agree that MMT is okay for certain things, I have a feeling the people on the receiving end will just start saying, “no thanks, my renewable energy company only accepts bitcoin”. The end result is government seizure and control of certain sectors, where they are the buyer and seller of their Monopoly money. Otherwise people will not only store their long term value in bitcoin, but expect to be paid in it too.

ScytheOfCosmicChaos

Not sure what you mean with the question. If you want an MMT opinion on the current status, then BTC is an asset like any other. You offer it on the market and it's worth whatever people are willing to pay for it. Scarcity doesn't mean value per se, stocks for example are all scarce and some of them are worthless garbage. If you want a view on a "bitcoin standard world" where governments have adopted bitcoin as currency, that would be analog to a gold standard. Once the limit of BTC creation is reached, it would just be currency with a fixed supply like all currencies in the late 19th century were, and it would create the same problems and would most likely be abolished again after some time for the same reasons.

BigGaynk

MMT is true, just print and spend on civil infrastructure, you will earn dividends. How is it not true? It works.

dnamlin

MMTers recognize, more than most people, that fiat money is just something the government makes up -- like a movie theater makes up movie tickets. I don't think MMT says bitcoin doesn't have value, I think it just pushes back on overwrought claims that the fiat system must inevitably collapse. It doesn't have to collapse, *if it's stewarded wisely*. The last bit being the hard part in reality, of course.

Braindamagedeluxe

Ima proponent of MMT. Any disadvantages are offset by BTC existing. State gets his control over monetary policies to keep the economy running smoothly (in theory) while I get to store long term value in an asset that isn’t directly influenced by those policies. One of the biggest problems today is that we pretend fiat is scarce while we act like it isn’t. So drop the farce, print the money and store long term value in BTC. Another inherent problem with fiat is that most asset classes become destructive when too much value is stored in them. Housing should be a commodity mainly for people to live in and not as an object of speculation, the stock market is prone to develop bubbles whenever the inherent value falls too far behind the value the market determines. BTC can store infinite value without any negative consequences and is a fundamentally better store of value than gold. BTC not having any inherent value is an advantage and not a disadvantage. tldr: print the money we need for education, combat climate change and whatever. Let ppl buy BTC to store their hard earned monies long term.

Gunnar_Peterson

No because under these theories money needs to.be controlled by government and a currency like bitcoin could harm the economy so it would be rat poison. Luckily that isn't the world we live in and Keynesian Economics and MMT is garbage

und3adb33f

Bitcoin is valuable because Keynsian economics is a fraud and MMT is Keynsian economics on meth.

perfect5-7-with-rice

Your idea is absolutely right but that is a co-opted definition that comes out of MMT and econ 101 type classes. It is not the original or true definition of the word inflation. We should reject this change of definition and use a different word to describe the phenomenon you describe (cost of living)

TropicalBlueMR2

Keynes would not advocate us treasury bond funded tax cuts for the wealthy and deregulatimg corporations as a great use of money to spur an economy. You're crediting mmt and anti-keynes neoliberals who came up with that, imo, terrible idea, as keynes. "Modern Monetary Theory (MMT) is a macroeconomic framework which proposes that governments can and should create unlimited amounts of money to fund public spending programs." For example, we dont HAVE to borrow or print money to fund programs that the factions within the economy that have the highest potential for a high multiplier effect or velocity of money...we can increase on our billionaires, lower taxes on working class, we can reduce expenses such as health insurance and instead go with a universal healthcare system. With a brief exception in the 90s, none of that has ever been tried, money waa borrowed to fund tax cuts for billionaires/corporations, the tax burden shifted onto the working class+government services reduce and the debt went sky high. Calling all that as Keynesian is imo an utter misunderstanding of keynes, it's crediting actions our government took on borrowing money/spending priorities that are decisively anti-keynesian and crediting it as keynes anyways. If you understand the multipliet effect+velocity of money in an economy, then youd know there's not much this government has really done in the last 25ish years that was approved of by keynesians.

perfect5-7-with-rice

MMT and Keynesian economics is bunk

jhexin

Wrong. Us controls the IMF. US is monetary sovereign and can create infinite money supply via MMT. The us controls global finance and is not going to let the free lunch that is international trade behind done in USD ever go by the wayside

Repulsive-Beyond6877

The reason why economics hasn't moved forward more is because you have poor minds leading the field. Most of the so called experts in the field have zero clue about practical use of policy and overall counter measures to their "theories". Paul Krugman did more to damage the field of economics and modern theory of money than WWII did to damage the German economic structure. MMT in general is one of the worst theories I've ever read and fails the central limit theorem which is why MMT and perpetual debt cycle will never work long term.

TropicalBlueMR2

Semantics are very important when discussing what word means what. Otherwise we cant communicate, attributing failures of neoliberalism, and calling it keynes. By your definition, Chicago School MMT adherents are also keynesian.

mSchmitz_

Just read up on MMT.

StumbleMyMirth

I don't disagree. I should say "what we call MMT" came about due to this very realization (as outlined in your image)

nottobetakenesrsly

It's not MMT, it's what [we've always done](https://imgur.com/a/WAwuKYH)

StumbleMyMirth

I watched this a few days ago and generally enjoyed it. There is a reason the entire world has moved away from "sound money" (money being backed by/constrained by physical goods). Some might argue it's because it lets dishonest central bankers steal value from the people, and while there may be some truth to that, the real reason is much simpler and less evil. People will always want to transact and *offer each other credit*, and if the money they have is "too hard" to allow them to do so easily and quickly, they'll simply find other things to use as money. "The extension of credit and the promise to repay" itself *is the money*. This is what MMT is all about - "why do we need a *thing* when all we need is *a ledger*?" (a ledger which can encapsulate the extension of credit and a promise to repay, not just the final tally).. As interesting as it may be, I don't envision a future ever existing where BTC is the one and only money used in the world. It excels as a "commodity based money" in that it can "move at the speed of light" but that doesn't help address the fact that people will always want to extend (and use) credit. If there's only a handful of people HODLing the finite supply of BTC (because they got in early enough?) and they are unwilling to extend credit to others, "everybody else" will simply find something else to use as money and tell the BTC HODL'ers to eff-off. This doesn't mean BTC can't have a meaningful place in the system, but if you're waiting for the day when "everything is divided by 21 million" and the entire world has become "hyper-bitcoinized", I'm afraid that's not likely to ever happen. Remind me in a hundred years, I'd love to see how I end up being wrong.

Successful_Score_925

There needs to be more political support - teach more people about modern monetary policy so they understand why bitcoin is created rather than trying to promote it directly. more hate for CBDC and MMT the more people political support we will get.

Ronitn

MMT falls 93% just in last 24 hours

CSharpSauce

We did a giant test of MMT during Covid, I think we can conclusively say it failed. Won't stop them from continuing to promote it though.

ArnzenArms

Most people, who know anything about finance, don't know that the money underlying all the systems they are familiar with is fundamentally broken. If you point this out, you are a "conspiracy theorist." Or you just don't understand the complexities of MMT. Don't forget that most people interested in money are Keynesians. Many of them have spent 1000's of hours studying economics through this lens and they don't buy the idea of "There's no such thing as a free lunch." Basically they believe in magic and fairy dust.

The_Realist01

Justin Trudeau? The guy who said budgets balance themselves? Ya fuck that MMT punk ass bitch.

Holiday_Extent_5811

Yeh positive return after 3 years, after a crash, which is once in a lifetime (well every 10-15 years or so) opportunity to level up. Not to mention the great risk free rates right now. To me it’s worth the small risk to my overall returns to gain big. It’s the Warren Buffet model to success. He makes his biggest gains going cash before calamity. Of course it’s a less and less percentage as he has gotten wealthier. Looking at the bond market pre WW2 and post WW2 are completely different animals. Bretton Woods, going off gold standard, MMT. There’s no guarantees in life, but I know where my bets are placed.

anax4096

https://en.wikipedia.org/wiki/Modern_monetary_theory > + Cannot be forced to default on debt denominated in its own currency Under MMT the number is completely irrelevant. But the best part... Once the MMTerss establish such a massive debt, no other system can replace it, because how do you deal with that debt? the very insidious part -- which i think is happening now -- rampant inflation means people with hard money savings are forced to sell to obtain fiat for their living costs. Slowly, all the hard money is driven out of circulation in the hands of asset holders.

Domer2012

The above reasoning about militaries-backing-currencies is from proponents of Modern Monetary Theory (MMT), which are overwhelmingly Democrats

Fbastiat1850

>lso it's worth noting that there is a theory that explains the current monetary paradigm (MMT) that essentially asserts (massive paraphrasing) that governments don't need your money, why would they? Taxation isn't used to pay for things it's used to control monetary supply (Distinction without a difference) but it is a meaningful distinction as this fiction of governments having to take your money (e.g it's theft) is largely what drives very poor fiscal policy. MMT also suggest that besides taxes, govs can suck money out of circulation via issuing debt. Hence, the purpose of taxation under MMT isn't to control money supply as much as it is to redistribute wealth. If it were just about circulating money supply, they could affect that adequately via issuance of debt/bonds.

genlight13

This article is hyping about HODLing is not really something you can call facts. He gives no basis why he thinks money is for saving other than BTC shows such symptomatics. If you are really interested in monetary theory pla read a bit into Wikipedia where they actually cross reference some of their statements. Here a link for some monetary theory: https://en.m.wikipedia.org/wiki/New_Keynesian_economics This is like the basic for most of our banking system and the capitalist structures within. There are some newer theories like MMT but no country has really shifted their monetary policy towards that. I don’t disagree with you that saving is per se good for an individual. He also talks about the difference of inflation and deflation and actually underlines my points. Back to my example: you assume that the poor person can just reduce his living expenses. This is a rather elitist view and you should assume that these are basic needs in that example and that they cannot be reduced. Further you assume that his buying power amplifies in accordance to the deflation of the currency but this is most likely not true. We know from the real world that employers and similar are more adept in reacting to changes to monetary calue changes. The poor person will just be fired before his buying power can increase too much and hire a new for less if possible. A similar trend is visible with inflation i.e. salaries are only ever increased after inflation cut out a portion. This is called cold progression. The author in your article made the same assumption but it is falsified by real world examples.

dktunzldk

Bernie sanders supports MMT.

only_merit

Maybe don't use words that you don't understand, such as ... libertarian? There is no right or left libertarian. Libertarians reject politics and state, and taxation is theft. > That math just doesn't work. Because you are using it poorly. If there was no government, there would be nothing government would need to pay for. Math suddenly works - zero expense and zero income. > These Libertarians are useful idiots of the ultra-wealthy as they direct cuts to programs that help society Or maybe they are just educated and you aren't? > Governments investing in the people is literally one of if not THE most important purpose of government. Purpose of a government is to improve situation for pressure groups that control the government. > there is a theory that explains the current monetary paradigm (MMT) There is this theory that is completely wrong.

ManiaGamine

The problem with the right-wing libertarian mindset (coming from a left-wing libertarian) is that they believe fundamentally that taxation is theft. I know a lot of people in this subreddit and the bitcoin community itself also believe this. But governments cannot "pay" for things if they cannot take revenue via tax OR create money "out of thin air". That math just doesn't work. Now obviously I know that those on the right want to drastically minimize government spending but the problem stems from where they want the cuts to come from. These Libertarians are useful idiots of the ultra-wealthy as they direct cuts to programs that help society. Some people call those "welfare" programs but in reality what they are is investments. Governments investing in the people is literally one of if not THE most important purpose of government. Also it's worth noting that there is a theory that explains the current monetary paradigm (MMT) that essentially asserts (massive paraphrasing) that governments don't need your money, why would they? Taxation isn't used to pay for things it's used to control monetary supply (Distinction without a difference) but it is a meaningful distinction as this fiction of governments having to take your money (e.g it's theft) is largely what drives very poor fiscal policy.

NaturalProof4359

The left hates bitcoin cuz they can’t print it a la MMT.

brianl047

The point of money is as a unit of account a medium of exchange and a store of value (three reasons). If you don't print enough money the economy doesn't work. Other comments talk about MMT and growth but even if you don't believe in that at a minimum "government" (central banks that are politically independent from the politicians) has to print money for those purposes. It's not actually politicians who control the money printing but just the spending. There's certain theories where you can have prices go up and down and have a million decimal points to deal with it and never print any money (usually cryptocurrency or some money based on some impossible resource like moon dust) but it probably wouldn't work with human psychology. Once the expectation of lower prices sets in, companies cannot raise prices and the economy can go into death spiral. Why spend money or invest money if it's going up every month for free? That is why the target rate is 2% inflation for the central bank (along with unemployment) this is called the dual mandate of central banks As for debt, it's like going into debt for education or anything else... The investment might pay off or it might not. Elect different governments if you don't like what they are spending money on

idreamofjeanshorts

My country has this rationale for cbdc, where they figure they can't compete with other currencies and need a digital one. Yet they still clearly want to debase, and they never mention banning other forms of currency. There is even a section on MMT, which I hope they learned their idiotic lesson given the following inflation they created. >abuse, provided that residents can access viable substitutes for the official currency. At the same time, there has been considerable debate recently about the role of sovereign currencies in supporting greater fiscal capacity. Proponents of modern monetary theory (MMT), for example, argue that currency-issuing states face few—if any—budget constraints (Kelton 2020). It is far from clear if this idea applies as widely as MMT scholars suggest (Bonizzi, Kaltenbrunner and Michell 2019; Henwood 2019). >Still, seigniorage is likely to remain an important resource that governments want to preserve, not only as a source of ongoing revenue but also, more importantly, as a flexible fiscal option in exceptional circumstances. Seigniorage is also critical to the financial autonomy of central banks. If seigniorage revenues fell so low that central bank operations had to be financed through taxes, this could raise important concerns about central bank independence and the politicization of monetary policy (Engert and Fung 2017).

jonesmatty

Incentive and backing by what? Money printing? How can you service the debt when the revenue is less than the debt payments? Smaller Fiat currencies will collapse into bigger ones like the US dollar and the euro, and then those will collapse. It's just math. It is inevitable. Fiat is unsustainable. MMT just doesn't work.

Strong_Judge_3730

Yeah I think its up to us to teach people what money really is. The curriculum is made by the government and they have other priorities. Also not many politicians understand MMT full either or perhaps some do like the current system.

idreamofjeanshorts

Politically savvy as in Biden is our savior and MMT is certified gospel, or like they know the CPI is gamed and all the parties are the same?

crjlsm

Spot on. "The portfolio" as it is, exists because those assets (real estate, gold, stocks, bonds) when batched together create the closest thing we have to hard money. The assumption is that money loses its value, so you have to put it in something that will either gain or hold value. Before this system, we used paper money backed by gold or silver, and before that we used gold and silver coins. Before that we used ingots of copper or iron, and before that we used commodities like wheat. MMT and keynesian econ operate under some of the wildest assumptions mankind has ever undertaken, and some of the ideas are literally insane. Totally unprecedented too, mmt has only been a thing for the past two decades really, if that. We have no clue what we're doing. The idea that money must depreciate to be spent is ridiculous. I get the logic but, no. If money were to instead *appreciate* people would have *more money*. And when people have more money, people spend more. In this bitcoin system, inflation is caused by increased spending rather than being caused by the money supply increasing. Here, the value of our currency is more tied to the energy market and the cost of mining, whereas a gold backed currency is tied to the price of gold, etc. Paper currency is just hoo ha tied to nothing, with rules made by people that are constantly changing, and will inevitably be worthless no matter what anyone does or says or tries.

Mr_Bob_Ferguson

>At the end of the day nobody has a crystal ball. We can fix that: [https://www.amazon.com/s?k=crystal+ball&crid=1RR2MMT75WM8V&sprefix=crystal+b%2Caps%2C371&ref=nb\_sb\_noss\_2](https://www.amazon.com/s?k=crystal+ball&crid=1RR2MMT75WM8V&sprefix=crystal+b%2Caps%2C371&ref=nb_sb_noss_2) I'm not sure why we didn't think of this earlier.

Rice-Fragrant

I wish others saw what we currently seeing with the potential of bitcoin. I sometimes post on the Antiwork subreddit it’s fucking DEPRESSING. That’s really depressing me when I read their posts It’s not the fact that many on that subreddit are drowning in student loans, don’t own a home, low pay etc… it’s that some there are calling for MORE AND MORE FIAT FUCKERY. Some dude there constantly posts how great MMT is, where it doesn’t matter how much debt a country had they can simply “print” enough to make a welfare system for any and everyone where no one ever has to work. They hear bitcoin and they don’t like the fact that it can’t be created out of thin air and they think it’s a conspiracy by the rich to make themselves richer. Bitcoin is definitely hope for a future from the cancer of a debt based parasitic fiat system, but I wish others could see the same… all the mainstream media has totally corrupted the minds of the young people with fiat propaganda and fairytale nonsense that money comes from thin air.

Fbastiat1850

Indeed. Commercial banks are where 90% of 'new money' is injected into society, via the lending process. MMT even suggests that government can 'soak up' inflation (excess money supply) via government debt, just as you noted.

LB1890

If you like Bernie and AOC, you should read Stephanie Kelton (their leading economic advisor) and other MMT writers, and you will understand why "the left don't understand" BTC. Its not that they dont understand BTC, they just have a different stance on how the economy and money really work which makes BTC look rather silly and useless.

kwaker88

Smells a bit MMT to me.

PerpetuaLibertas

Are you serious, treasury issues bonds out of thin air which get sold to the fed in exchange of freshly printed money, what kind of MMT bullshit have you pulled out to justify this being the same as bitcoin

lurker_lurks

For someone who claims to not have much free time you sure spend a lot of time arguing on reddit. I have taken 300 level economics classes in college and while your credentials probably far exceed my own, at least I can see through the MMT Keynesian propaganda. I'm also not a big gold bug, I prefer silver. Infact I'm buying a fairly nice AC unit later this week using a handful of silver. A good friend of mine bought a used car using silver not too long ago. Also this conversation reminds me of this: https://www.bloomberg.com/news/articles/2021-10-20/venezuelans-break-off-flakes-of-gold-to-pay-for-meals-haircuts It looks like we've come full circle given the original post is about failed fiat currency that is the Venezuelan Bolivar. I've done my best to limit the condescension in my tone but I've really lost all interest in this conversation. I am glad our paths will not cross again. Have a good weekend.

lurker_lurks

Nah I'm good. Enjoy your MMT monopoly money and see where it has lead every civilian that has debased their money throughout recorded history. 100% failure rate.

coinfeeds-bot

tldr; The article argues that even those who hate Bitcoin should consider buying some as a hedge against being wrong. The author suggests that Bitcoin's existence challenges some people's beliefs, particularly those in the MMT crowd, but owning some Bitcoin could be a wise decision in case it succeeds. The author also shares their personal experience of taking a risk and jumping into Bitcoin as a career. The article includes a sponsor advertisement for a Bitcoin-only app and a hardware wallet. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*

Yorn2

There are some parts that never really sat well with me either, but the thing about the Austrian economic outlook is that the subjective theory of value beats the labor theory of value every time when it comes to practical application of economic principles, which is why things like MMT, Keynesian economics, and even the Chicago school fail whenever they are applied to present day economic issues.

DyehuthyTV

1. **FIAT Money** (*MMT Model*) **is Actually Quite Violent**... You want more? LOL You are mad Promotes Serfdom (*Permanent Inflation = Debasement*) and War through Economic Colonization (*Reserve Currency*) 👌 2. **With fiat money, saving is less and less possible** The **CPI** Increase a **100%** in a decade with a **2%** Inflation Target (*purchasing power debasment*). The new generations are Less Capable of Buying things what their Grandparents bought, with only 1 job (*Father Works!*) and supporting 8 children. Today this is impossible, without a Credit Card. **'Purchasing Power Debasment' its not Imaginery, ok? Go an Study!** This people will tell you that "Deflation is Bad", but actually you cant have a -100% Deflation, but you can have more than 100% Inflation, Oh Yes. Look's Argentina, Venezuela and many other Countrys with HyperInflation now and in History 😉 Cya!

DyehuthyTV

FIAT Money was Design for Debasement of Purchasing Power 👈 This is the Current "Believe" of this Monetary System: FIAT Money. *Based on MMT = Modern Monetary Theory, Keynesianism Model* **Let’s describe the beliefs held by proponents of Expansionary Money and Credit:** 1. *We must have expansionary money and circulation credit to achieve more economic growth.* 2. *Fixed supply money leads to prices declining over time, which leads to hoarding money, which means lack of spending/investment, which means high unemployment and economic recessions.* 3. *It is unjust that someone could see their purchasing power maintained or increased over time for “doing nothing” other than holding money.* 4. *We need an expansion of money and circulation credit to redistribute resources from the haves to the have-nots.* 5. We need an expansion of money and circulation credit to redistribute resources from the haves to the have-nots. Source: ["Fixed Supply Money Does Not Lead to Economic Collapse" - Bitcoin vs Fiat Money](https://www.swanbitcoin.com/why-a-fixed-supply-money-does-not-lead-to-economic-catastrophe/)

StumbleMyMirth

> When younhave one sode that believes in MMT one side?? This isn't really a question of MMT vs. Austrian Economics and you can't really say that Democrats believe in MMT and Republicans don't. Remember, this debt ceiling conversation isn't about deciding future spending, it's about paying for the things *we already agreed to pay for*. Paying our current debts as promised shouldn't be up for discussion nor should it be held hostage by future policy decisions. ​ >If not now, when? Oir cirrent tax/spending isnt sustainable and no one wants tonfix it. Even the gop are just asking for 2022 spending. Which is a crazy number in itself Indeed, it's not sustainable. Of course, "now" is certainly as good a time as any to discuss reducing spending and fiscal responsibility, but those discussions should be distinct from meeting our *existing* obligations. Defaulting on our existing obligations should be off the table (and as I said earlier, both sides know this, this is all political theatre) Republicans are right to want reduced spending, smaller government and increased fiscal responsibility. Biden, a Democrat, is also right to insist on a "clean" increase (meaning, not attached future policy caveats.)

Corona_DIY_GUY

Well, i wasnt trying to be an as or anything. I just wanted to point out that the chances of us not raising the is a nonzero number and the markets have that priced in, whatever they think that nonzero number is. What is weird is that you said that this isnt the time to make policy decisions. When younhave one sode that believes in MMT, ignores the affect of govt spending on our current inflation crisis, and has no intentions of slowing down spending, when is the right time? If not now, when? Oir cirrent tax/spending isnt sustainable and no one wants tonfix it. Even the gop are just asking for 2022 spending. Which is a crazy number in itself. We should go back to 2019 spending just to start and cut from there.

CunningCobra

I've seen the belief that deflation causes disasters, however, never any convincing evidence. MMT believers think that growth only happens with constant, low inflation, following that logic we should not have had growth before the 1970s, which is patently false.

circleuranus

I honestly appreciate the effort put forth in your post. I will say that I do not believe the US monetary system is without its faults, and the Bretonwoods agreement kicked off a substantial amount of sloppy global fiscal policy. However, globalization is coming to an end. Quickly. It was always going to be thus, but Covid and poor demographics in a number of 1st world nations has brought supply chain to the forefront. It also appears the US Navy no longer has much interest in patrolling global shipping lanes. Companies around the world are "on shoring" much of their economic activity or otherwise relocating out of China. That said, Globalization is responsible for raising more people out of poverty around the world than any other singular system ever created. Those poor "brown people" had a standard of living in the past that would shock most people, given their current standards. US hegemony has very little to do with "luck". US global soft power was very much by design after WWII. The Marshall Plan was instrumental to those designs. Without the ability to expand and contract credit and deficit spending, the US could not afford to provide global security in its current form. Lest we forget, many of our overseas bases are there by invitation. Turkey for instance may bitch and moan about no "fly over zones" and silo locations within its borders,, but Turkey would shit its pants if the US packed up and went home altogether. People with no sense of history love to blame the US for stirring up trouble in the Middle East, forgetting of course that those countries have been invading each other and committing genocide for thousands of years. Comparatively speaking, the Middle East is at one of its more peaceful times. Anyway, that's not to say that I believe the US should continue to rack up debt well beyond our GDP to pay for all of this, but anyone advocating for repegging to gold or becoming isolationist is just delusional. And while I do believe there are many leverage capabilities contained within MMT, I don't believe it to be a cure-all either.

j4c0p

There are thousands of economists pouring from universities each year. I had to attend economy classes as part of my university curriculum also and there was literally no focus on free markets at all. Majority and mainstream economy is focused on MMT and Keynesians which is literally teaching students to think only in boundaries of government and political regulations. Austrian school was mentioned just as bulletin point in presentation without any followup. I agree that every economic activity in some form produce unintended consequences. Government regulated markets are worse at resolving externalities as majority of centrally planned **cannot economically calculate** Free markets are decentralized and way more elastic when it comes to reacting to demand (regardless if its just product/service or solving issue with externality) Centrally planned = laws and regulations are chronically noneffective and produce way bigger problems down the road. Very nice example of this is currently **banking sector**, where government tried to solve "externality" of possible bank runs by forcing banks to buy treasuries as required part of portfolio. Then proceed to rekt the value of treasuries by raking interest hikes which makes whole sector exposed to toxic asset unstable. **Energy grids** are another example of this. No one wants to invest into Energetics, doing any research as there is literally no incentive to do such stuff. In Europe you cannot even build your own solar panel array over 10kwh without getting forced to sell your energy for fixed price. Building hydro is almost impossible even if you have lobby power, which majority of people does not have. This all adds up making grid old and unreliable. Then government comes and say how and who can use energy blaming consumers instead of opening market and building god damn powerplants, then selling energy for open market rate. Cherry on top is risk of nationalization which is popular populist choice nowadays. Healthcare, schools, infrastructure.... All heavily regulated and on brink of total collapse.

jt7855

The idea is absolutely absurd. Almost absurd as Krugman and MMT.

eetaylog

Chamath is a MMT maxi, I cannot stand listening to him spout on about Fed policy. On his podcast somebody pointed out that in the long run the federal reserve will have no choice but to debase the US currency further in order to keep up with the country's out of control debt to GDP. His answer...''So what''

5liveR

lol you mean the deep understanding university graduate MMT economists have? Its literally the one pseudo-science out there.

mangist

Kelton wrote a book called the Deficit Myth which I believe is trash, but is very pro-MMT, pro-Fed, pro-debt, pro-money printer. I think she also hates Bitcoin.

No-Mountain4550

[MMT answers:](https://www.reddit.com/r/mmt_economics/comments/12py6id/is_this_thread_on_inflation_and_bitcoin_correct/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1)

asWorldsCollide2ptOh

I believe there's a bit of a world agenda against crypto. What I believe Mr. Paulson is referring to is the depegging of USD against oil which renders MMT a failed philosophy and Fed's unable to prop up our economy much longer. >BRICS appear to be mounting an effort to shift the world’s monetary system away from the US dollar. >The group is reportedly preparing to develop an alternative currency that would circumvent the dollar.

leftofcenter212

Your boy is one of those MMT cooks. MMT is not sustainable and will result in the ultimate downfall of the US Dollar. https://youtu.be/UmcT72zzHsc?t=2052

Mannimal13

The market cap grows because the money supply grows and spec assets ruled during the age of MMT. There’s a more than zero chance, when this thing comes crashing down, the next bull only retests highs. 4800 SnP was pretty aburd based on trend and may take another few years to get back there again

Canaan-Aus

I've gone back and forth so many times over the last 6 months about whether a) BTC pumps are due to favourable liquidity and QE which causes demand to be high (demand driven) or b) fundamentals in BTC that make supply shock to be driver of price due to the halving (supply driven) I'm probably more likely to believe A) because as special as I think BTC is, its not unique in a fundamentally different way to any other asset class. An object can be rare, but no one wants to buy my old gym socks just because they're rare. Hence, I think its a two way street. The halving may have an effect, but perhaps less effect than in the past if we are still under global macro downturn. I'll continue to DCA in case I am wrong. I just really want the price to stay low so I can keep filling my bags until global macro turns around and there is more money in the system to support a rise in BTC price. hopefully I am right. knowing my luck, I'm probably not. There was a good article by Brent Donnelly on Pomp's [substack](https://pomp.substack.com/p/bitcoin-is-a-hedge-for-loose-policy) which has now paywalled. I believe it's been [reposted here](https://mtcbd.substack.com/p/bitcoin-is-a-hedge-for-loose-policy#:~:text=Bitcoin%20is%20not%20an%20inflation%20hedge%2C%20it%E2%80%99s%20not,for%20more%2C%20not%20less%20MMT%20in%20the%20future.) He concludes that BTC can rise under lose monetary policy by concluding: - Next time the Fed turns dovish, don’t hesitate: Buy bitcoin. seems convincing enough to me?

Spirit_409

You should listen. They are poster children for your precious MMT — how even under perfect conditions (Argentine farmland being effectively endless vis-a-vis population, highly productive most years, relatively passive income and heavily taxed upon export via bad exchange rate), it creates nothing but limitation and free-falling misery.

KarmaEDV

I interpreted the images as important events in human history The invention of the wheel The invention of differential equations The crumbling of the fiat financial system/failure of MMT The freedom you get with BTC

shosuko

b/c its true, and I'd be really worried about anyone who thought otherwise... You sell a product for $10. It costs you $5 to make. I buy it from you for $10. You spend $5 on your materials and the other $5 on lunch. If I didn't buy that from you for $10 you wouldn't have bought $5 in materials and you wouldn't have bought $5 on lunch. My purchase of $10 enabled $20 in sales. More considering the person that produced your materials and your lunch is likely using that to purchase as well. This is why things like spending money to house the homeless COMPLETELY FREE without any requirements from them can actually stimulate the economy. b/c even though that homeless person is getting the house free the people who made the house, maintain it, provide services to it like utilities, etc are the ones actually getting paid - and they will in turn all spend that money on other things like their own homes, tv's, movies, etc feeding into a cyclical economic loop. Where this gets out of hand is in taxation and inflation. Inflation is partly caused by adding money to the economy. If we suddenly pay for a lot of "free housing" for homeless people we are injecting a lot of money into the economy. A bit of inflation is okay, especially with a growing population, but a lot of inflation is bad. This needs to be tempered by taxation which takes money out of the economy. Ideally you want to balance government spending and taxation to control the size of the economy. But politicians are greedy assholes who want to stick their dick into every plumb pie that crosses their desk. They want to always cut taxes and increase spending towards their favored projects without regard for our economic integrity, relying instead on the fed who can print money and control interest rates instead. So we get idiots like Trump who slashes taxes on an already record high economy, and liberals pushing MMT...