Thursday, May 31, 2012

Deficits are both immoral and the cause of economic catastrophes

The problem for MMTers, Keynesians and “progressives” is that deficits are indeed:

a) immoral; AND

b) contribute greatly to economic catastrophes.

Despite decades of confusion and muddle from the Keynesian elite in academia and the media, average people know this. In fact, only 20% of the 18-29 year olds agree that government spending is an effective way to economic growth.

What average people don’t seem to understand is that both deficits and inflation are purposeful government policies enacted and defended by people known as “Keynesians”. These points should be shouted from the rooftops. There should be ubiquitous airplane banners announcing the truth.

Romney is a bankster and Keynesian. Therefore, he has to fool the public into thinking he’s opposed to deficits while signaling to his masters in the elite that he is not going to abandon their Keynesian looting spree.

That's why you MMTers are so important to the cause. By being so explicit in your claims that fiat funny-money "printing" through keystrokes is a policy that actually should be enacted, you help alert the public to the true nature of Keynesianism and help undermine decades of Keynesian obfuscation.

Thanks again.

The source of the MMT delusion: The fiat funny money system does not quite mimic commodity money

It’s quite pointless to argue with MMTers.  I’ve been challenging them for months now over at the Mike Norman site and there truly is no there there.

The entire fantasy world of MMT starts with the insight of Stephanie Kelton that perhaps the world of fiat funny-money creation does not completely mimic the real world of commodity money.

Since the “money” received by the state in taxes and from bond sales might not be exactly the same “money” “spent” by the government and since the accounts generally do not match up, the MMTers take a flying leap off the cliff and conclude that the government need not tax or sell bonds at all in order to “spend”. Ever. (The purpose of taxes is simply to suck funny money out of the system and control price inflation). And therefore, the government is not revenue constrained and the government can just “spend” and “spend” on SS and $100 trillion worth of adult diaper changing services without any concern for the source of those funds BECAUSE THE GOVERNMENT CREATES DOLLARS AND HAS AN UNLIMITED SUPPLY. The only “constraint” possible is price inflation, but that’s easily controlled and only fools worry about that. Further, the underlying theoretical foundation of MMT is just the nitwit Keynesian jargon and categories of “thought”. Thus, they conclude that “demand” can easily be fixed because the government has an unlimited supply of funny money dollars to “spend”. That’s MMT. That’s it. There is nothing more to it.

They have no familiarity with or understanding of even basic Austrian concepts such as economic calculation, ignorance and human exchange. They don’t know and they don’t care. They ain’t worth the powder. In fact, they do us all a favor whenever they start their blabbing because it helps the public understand what an outrageous monetary system we have. Further, the American public does not believe that government spending causes prosperity and they should be the target of our concerns and outreach.

Keynes: A reduction in savings will cause post WWII prosperity.

These people are truly amazing.  The Imperious "Lord Keynes" has denounced Tom Woods:

In 1943 — the same year Samuelson got it wrong — Keynes was giving a lecture at the Federal Reserve and was asked by Abba Lerner about the possible economic problems of the post-war period. Keynes’s reply is significant:
“Keynes harshly rejected the risk of post-war stagnation, holding that because of Social security there would be a large reduction in private saving and so that would be no problem.” (Colander and Landreth 1996: 202).[emphasis added]
Woods, like other Austrian ideologues, seems utterly ignorant of this. What kind of analysis of the post-war boom ignores what Keynes — the founder of Keynesian economics — thought about this question? The truth is that Samuelson was simply wrong; Keynes was right.

Everyone got that?  Because of Social security there would be a large reduction in private saving and so that would be no problem.

I guess "Lord Keynes" told us. Seriously, average people simply do not believe that government spending and deficits cause prosperity.  Heck, average people don't even know that deficits and money dilution are purposeful government programs instigated by a gang of knuckleheads known as Keynesians.  It's our job to tell themAnd don't forget that LK still does not understand the basic Austrian concept of economic calculation.