September 17, 2017

MMT: The economics moron as problem solver

Comment on Zero Hedge on ‘Even Bernie Sanders Thinks ‘Medicare For All’ Would Bankrupt America’


MMTers do not know how the profit- and price mechanism works but they offer a one-size-fits-all solution for all economic problems: A sovereign currency issuer has, as a matter of principle, a monopoly on the issuance of the currency and can exercise this monopoly through unrestricted deficit spending for any chosen purpose from basic income to healthcare to warfare.

This, of course, is trivially true and just another wording for what sovereignty entails. Sovereignty, though, is the pivotal concept of Political Science and NOT of economics. The subject matter of economics is how the economic system works and NOT how the political system works.

Fact is, to begin with, that economists do NOT know how the economy works. Economists cannot until this very day tell the difference between profit and income. And these mentally retarded folks, who do not understand the foundational concepts of their subject matter and the elementary mathematics of accounting, tell their fellow citizens how best to organize the economy.

Economists have NOT produced anything of scientific value since Adam Smith but award themselves each year a prize for their non-existing scientific achievements: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.

Economics is a failed science, and MMT is NO exception:
  • MMT’s sectoral balances equations are mathematically false,
  • because the formal foundations are false the whole analytical superstructure is false,*
  • because MMT is materially/formally inconsistent, MMT policy guidance has NO sound scientific foundations,
  • because MMT has no scientific content whatsoever it is nothing more than brainless political blather,
  • because it holds that Public Deficit = Private Profit, MMT is a straightforward program for the unabated enrichment of the one-percenters,
  • to claim that MMT delivers a scientific underpinning of the political program of Bernie Sanders or Jeremy Corbyn is just one more absurd/fraudulent claim in the long history of the fake science called economics.

Egmont Kakarot-Handtke

* For details see cross-references MMT

Related 'Solving Mill’s starting problem' and 'Who or what exactly did Keynes save?' and 'Why Bernie Sanders is unintentionally a godsend for the one-percenters' and 'Endtime for soap box economists' and 'Banana economics' and 'Krugman is not an economist' and 'Turning the bananatization of economics around' and 'Hayek was not an economist' and 'Corbynomics' and 'Time to get rid of political economics' and 'The new macroeconomic paradigm'. For details of the bigger picture see cross-references Scientific Incompetence and cross-references Profit.

REPLY to Matt Franko on Sep 18

The title of my post is ‘MMT ― the economics moron as problem solver’. This, obviously, means you.

You say: “Egmont doesn’t understand Basis of Accounting” and refer to Wikipedia’s entry about the difference between cash basis and accrual basis accounting.#1

You overlook that this difference plays NO role in the present context because, for a start, both accounting methods are synchronized in order not get distracted by the technicalities of shifting profit between periods. So, both accounting methods lead to the SAME result in the present context. The term monetary profit Qm makes it explicit that profit, as it appears in accrual accounting and profit as it appears physically in the cash box are numerically identical.

If you were not so stupid you would have realized that wage income as it accrues in the period under consideration is actually paid in this period.#2 The same holds for consumption expenditures. Hence it does NOT MATTER AT ALL whether accrual accounting or cash accounting is applied.

Fact is that MMTers got the macro accounting provably wrong#3 and this means that they are either morons or fraudsters. Take your pick.

#1 Wikipedia, Basis of accounting
#2 Economists: just too stupid for counting
Money and time
A tale of three accountants
#3 Rectification of MMT macro accounting