MMT vs. Austrian School Debate

What a coincidence...I'm currently debating an MMT'er on another forum...Xero's Rule

Xero: Passages by J.S. Mill are nonsense? I don't share them because he's famous...I share them because they accurately describe the real world. If you think they are inaccurate in some way...then please feel free to articulate where they fall short. You won't be able to do so though. I know it for a fact. You have absolutely nothing intelligent to say about J.S. Mill's arguments.

JP Hochbaum: You are right I will never be able to prove to a bible pusher that god doesn't exist.

Xero: Paul Samuelson, a liberal economist, provided the definitive economic justification for the government. His assumption was that government planners are omniscient. So the irony here is that you are actually the bible pusher. My only argument is that government planners are not omniscient...therefore taxpayers should have the freedom to shop for themselves in the public sector.

You're welcome to try and prove that government planners are omniscient. But we've already established that you have absolutely no idea what Samuelson is talking about. Therefore, you don't understand market economists...and you don't understand liberal economists. Basically, you don't understand economics at all.

JP Hochbaum: I've never made the claim that government planners are omniscient. You continue to strawman me when ever you get backed into trying to prove anything.

Xero: I'm glad you agree that government planners aren't omniscient. Therefore, you agree that they are incapable of providing the optimal quantities of public goods. Therefore, you agree that MMT is a stupid idea. Me too.

JP Hochbaum: MMT actually doesn't say that government should spend but that they give the private sector more ability to spend via less taxation and a job guarantee bill so that private citizens can vote with their dollars.

Again you fail to understand what my message is and actually argue against yourself.

Xero: So you want to get rid of the government's printing press?

JP Hochbaum: No, that would be silly, there would be no more currency.

Xero: First you say that the government would not spend...

MMT actually doesn't say that government should spend but that they give the private sector more ability to spend via less taxation and a job guarantee bill so that private citizens can vote with their dollars.

Again you fail to understand what my message is and actually argue against yourself.
Click to expand...

But here's your response when I asked you whether you want to get rid of the government's printing press...

No, that would be silly, there would be no more currency.
Click to expand...

So you don't want the government spending money...but you want the government to keep its money making machine. You don't want me to spend money...but you don't want me to chop down my tree which magically has money growing from it.

If you don't want the government spending money...then what does the government do with the money that it prints? We need currency...so how does the currency get from the government to us without the government spending money?
 
Xerographica said:
What a coincidence...I'm currently debating an MMT'er on another forum...Xero's Rule

Xero: Passages by J.S. Mill are nonsense? I don't share them because he's famous...I share them because they accurately describe the real world. If you think they are inaccurate in some way...then please feel free to articulate where they fall short. You won't be able to do so though. I know it for a fact. You have absolutely nothing intelligent to say about J.S. Mill's arguments.

JP Hochbaum: You are right I will never be able to prove to a bible pusher that god doesn't exist.

Xero: Paul Samuelson, a liberal economist, provided the definitive economic justification for the government. His assumption was that government planners are omniscient. So the irony here is that you are actually the bible pusher. My only argument is that government planners are not omniscient...therefore taxpayers should have the freedom to shop for themselves in the public sector.

You're welcome to try and prove that government planners are omniscient. But we've already established that you have absolutely no idea what Samuelson is talking about. Therefore, you don't understand market economists...and you don't understand liberal economists. Basically, you don't understand economics at all.

JP Hochbaum: I've never made the claim that government planners are omniscient. You continue to strawman me when ever you get backed into trying to prove anything.

Xero: I'm glad you agree that government planners aren't omniscient. Therefore, you agree that they are incapable of providing the optimal quantities of public goods. Therefore, you agree that MMT is a stupid idea. Me too.

JP Hochbaum: MMT actually doesn't say that government should spend but that they give the private sector more ability to spend via less taxation and a job guarantee bill so that private citizens can vote with their dollars.

Again you fail to understand what my message is and actually argue against yourself.

Xero: So you want to get rid of the government's printing press?

JP Hochbaum: No, that would be silly, there would be no more currency.

Xero: First you say that the government would not spend...



But here's your response when I asked you whether you want to get rid of the government's printing press...



So you don't want the government spending money...but you want the government to keep its money making machine. You don't want me to spend money...but you don't want me to chop down my tree which magically has money growing from it.

If you don't want the government spending money...then what does the government do with the money that it prints? We need currency...so how does the currency get from the government to us without the government spending money?
Click to expand...
Do you ever debate the Georgist or the Venus Project/Zeitgeist Movement?
 
Honestly, I don't think either one did a good job. I feel like they debate should have been set up differently.
 
At least Xerographica pushes choice. That's a nice change from most people. Now if only we can rid him of the notion that choosing where your stolen money goes is a subordinate choice...
 
only 40min into it so far... and it's really annoying. the one guy is making so many stupid statements, but Murrphy doesn't seem to know enough to be able to point out the stupid things he's saying... he looks lost.

like the guy claims that the current interest rate for steel is 0%. this is not true at all. if this were true, i should be able to go and borrow 10,000 lbs of steel from someone and agree to repay them 10,000 lbs of steel in 10 years from now. so the interest rate for steel isn't zero. of course, we structure contracts in terms of dollars, so we don't have a set interest rate for steel... but the market would determine an interest rate if people decided to structure steel loan contracts that are repaid in steel.

like... the guy seems to think that the natural rate of interest for everything would be 0% if it wasn't for central banks / government setting them.

he thinks that if it wasn't for the fed, that people would be willing to loan money to the US government at 0%

he also thinks that deficits are good, and that the government should give everyone $5,000 per year. if schiff was debating him, he'd ask him, so why not give everyone $10,000 per year? why not $1million? if running $1 trillion deficits are good... why not $10 trillion? then ask him why it would be bad to give everyone $1million per year and run a $10 trillion deficit every year.
 
Last edited:
Henry Rogue said:
Do you ever debate the Georgist or the Venus Project/Zeitgeist Movement?
Click to expand...

I've debated a few Georgists. Like MMT'ers, they fail to understand the problem with allowing government planners to determine how the public's taxes are allocated.
 
Seraphim said:
At least Xerographica pushes choice. That's a nice change from most people. Now if only we can rid him of the notion that choosing where your stolen money goes is a subordinate choice...
Click to expand...

Thanks. I just fail to understand how we could end up at the wrong destination if taxpayers were put in the driver's seat.
 
I decided to e-mail Warren Mosler... though I could use a little help in this debate.

Here is what I wrote:

Though I guess my point is that just because they set the risk-free rate at a very low level, doesn't mean that savers have to lend it to them at that level. They can loan their savings to someone else for a higher rate and accept the higher risk.

Therefore, would you agree with the following:

The Federal Government (the risk-free issuer) competes with State Governments, Municiple Goverments, corporations, consumers, etc. to attract capital. If I have saved US dollars and I want to loan my savings at interest, the borrowers must compete with each other to attract my capital. I look at the risk assocaited with lending to each of these groups and the rate of return they will compensate me with.

So let's say that the total group of savers have saved one trillion US dollars. They loan the Federal Government $200 billion at 0.25% interest for one year (risk free). They loan various State Governments $200 billion at 1% interest per year (a little risk). They loan Municiple governments $200 billion at 3% interset per year (somewhat risky). They loan various corporations $200 billion at 5% interest per year (risky). And they loan a group of consumers the last $200 billion at an average rate of 10% interest per year (very risky).

At the end of the year, they collect their interest and plan on reinvesting their savings the same way. However, this year, the Federal Government now wants to borrow $400 billion instead of the normal $200 billion that the savers were willing to lend them at 0.25%. So if the Federal Government wants to borrow an extra $200 billion more than the savers were willing to lend, they have to intice the savers with higher rates. So in order for the savers to lend that additional $200 billion, the Federal Government maybe will have to offer the savers 1% interest on that additional money because then they'll lend to the Federal Government instead of the State Governments. But if the Federal Government does not want to borrow that additional $200 billion at the higher interest rate, their only other option it to borrow from the Federal Reserve who can print up an additional $200 billion out of thin air and lend it to them at whatever interest rate they want (0.25% in this case). But this option has the consequence of increasing the base money supply (M1) by $200 billion. This opition is more inflationary than simply borrowing the money already in existance at a higher interest rate from the group of savers.

So just because the Federal Government wants to borrow money at a set rate of interset, doesn't mean that savers are willing to loan at that rate of interest. My point is that if the Federal Government wants to issue more debt, it might have to offer a higher rate of interest in order to attract the capital. Alternatively, the Federal Reserve can step in and cover the shortfall with their printing press.

For example, I own Canada Savings Bonds (Canadian Federal Government bonds). And I'm willing to accept the low rate of interest that they pay me because I know that it's risk-free. But maybe when the bonds mature, I will want to loan my money to the City of Toronto for a higher interest rate because I'm willing to accept a higher risk. If the Government of Canada wants to borrow my money again, they will have to offer me a higher rate of interest or just borrow from the Bank of Canada.

Do you agree with what I've said?

----------------------------------------------

He replied: (my e-mail in italics, his response in bold)

Though I guess my point is that just because they set the risk-free rate at a very low level, doesn't mean that savers have to lend it to them at that level. They can loan their savings to someone else for a higher rate and accept the higher risk.

again, you don't understand monetary operations.
deficit spending in the first instance adds to member bank reserve accounts.
tsy secs offer alternative accounts, called 'securities accounts' by fed insiders, also at the fed.
that is, at the end of the day the funds net spent by govt will sit in reserve accounts or securities accounts, or actual cash. there are no other options.

The Federal Government (the risk-free issuer) competes with State Governments, Municiple Goverments, corporations, consumers, etc. to attract capital.
Absolutely not. As above.
Tsy secs are what's called a 'reserve drain'

If I have saved US dollars and I want to loan my savings at interest, the borrowers must compete with each other to attract my capital. I look at the risk assocaited with lending to each of these groups and the rate of return they will compensate me with.
dollars in reserve accounts at the fed can only go to other reserve accounts at the fed, or securities accounts at the fed.

So let's say that the total group of savers have saved one trillion US dollars.

let's say the deficit is 1t and the spending went to an account of jpm. the 1T is then in jpm's reserve account at the fed.

They loan the Federal Government $200 billion at 0.25% interest for one year (risk free).

the fed debits jpm's reserve account for that much and credits the appropriate securities account at the fed for that much.

They loan various State Governments $200 billion at 1% interest per year (a little risk).

the fed debits jpm''s reserve account for that much and credits the reserve account of the bank the state govt uses.

They loan Municiple governments $200 billion at 3% interset per year (somewhat risky). They loan various corporations $200 billion at 5% interest per year (risky). And they loan a group of consumers the last $200 billion at an average rate of 10% interest per year (very risky).

those $ sit in the fed reserve accounts at the banks used by the municipalities and corporations.

so all the dollars spent by the gov sit in their respective reserve accounts at the Fed unless any one of them buys tsy secs, in which case the dollars go to a securities account at the Fed.

there are only three choices for govt net spending, which by accounting identity = tsy secs+reserves+cash

At the end of the year, they collect their interest and plan on reinvesting their savings the same way. However, this year, the Federal Government now wants to borrow $400 billion instead of the normal $200 billion that the savers were willing to lend them at 0.25%. So if the Federal Government wants to borrow an extra $200 billion more than the savers were willing to lend, they have to intice the savers with higher rates.

the dollars to buy govt secs come from reserve accounts at the fed, and those dollars in reserve accounts come from the govt spending

it's a very simple spreadsheet.

So in order for the savers to lend that additional $200 billion, the Federal Government maybe will have to offer the savers 1% interest on that additional money because then they'll lend to the Federal Government instead of the State Governments. But if the Federal Government does not want to borrow that additional $200 billion at the higher interest rate, their only other option it to borrow from the Federal Reserve who can print up an additional $200 billion out of thin air and lend it to them at whatever interest rate they want (0.25% in this case). But this option has the consequence of increasing the base money supply (M1) by $200 billion. This opition is more inflationary than simply borrowing the money already in existance at a higher interest rate from the group of savers.

seems if base money per se was inflationary the 3.5t added by qe would not have resulted in core cpi decelerating?

anyway, your rhetoric is all fixed fx, not directly applicable to current monetary operations of non convertible floating fx currency.

So just because the Federal Government wants to borrow money at a set rate of interset, doesn't mean that savers are willing to loan at that rate of interest.

functionally, it doesn't matter.
govt is borrowing only after it spends, not in order to spend.

My point is that if the Federal Government wants to issue more debt, it might have to offer a higher rate of interest in order to attract the capital.

Yes if tsy wanted to sell more long bonds, it would probably pay a marginally higher rate. but it has no imperative to do so. it can sell all the 1 week bills at or less then the fed funds rate set by the fed.
and, again, close examination shows the govt as a whole spends first, and then borrows

Alternatively, the Federal Reserve can step in and cover the shortfall with their printing press.

the printing press used to refer to convertible dollars vs the actual gold in reserves. by 1971 the US had 'printed' 4x more convertible dollars than it has gold, so it suspended conversion before allowing France or anyone else to convert.

With floating fx, all gov spending is printing, and all taxing unprinting. borrowing just shifts balances between fed accounts.

For example, I own Canada Savings Bonds (Canadian Federal Government bonds). And I'm willing to accept the low rate of interest that they pay me because I know that it's risk-free. But maybe when the bonds mature, I will want to loan my money to the City of Toronto for a higher interest rate because I'm willing to accept a higher risk. If the Government of Canada wants to borrow my money again, they will have to offer me a higher rate of interest or just borrow from the Bank of Canada.

Do you agree with what I've said?

no
do you follow anything I've said?
you need to get up to speed on your monetary operations to have any credibility at all on this stuff seems?
 
Last edited:
whippoorwill said:
HAHAHAHAHAHA!

http://www.youtube.com/watch?v=CuIWUArl2g4&feature=player_embedded
http://mikenormaneconomics.blogspot.com/
Click to expand...


LOL, this guy will hear whatever he wants to hear. Its funny that he is the guy in the 'Schiff was Right' video. I bet that just eats at him daily. The guy just needs to let go.

Now that I think about it I believe he is the guy behind the SchittReport channel on youtube, where he smears Schiff in each video. Schiff is really in this guys head.
 
You must log in or register to reply here.

Similar threads

PAF
The Mises-Hoiles Correspondence: What Might Have Been
Replies
0
Views
896
PAF
PAF
Occam's Banana
Mises University 2023
2 3
Replies
54
Views
13K
Occam's Banana
Occam's Banana
donnay
Mike Rowe Is on a Mission to Reverse the 'Unspeakable Stupidity' of Devaluing Work
Replies
2
Views
301
donnay
donnay
osan
The Beginning and End of Postmodern America
Replies
0
Views
648
osan
osan
PAF
A Rothbardian Dissection of Javier Milei
Replies
2
Views
2K
PAF
PAF
Back
Top