#Economics#AllYouNeedToKnow
— AXEC (@EgmontHandtke) October 7, 2025
“Economists think about what people ought to do. Psychologists watch what they actually do.” (Daniel Kahneman)
No, economists think about how the economic system behaves. Psycho-social behavior has NEVER been their job.
Economics has defined itself… pic.twitter.com/sME5voDw5I
Showing posts with label zPSY. Show all posts
Showing posts with label zPSY. Show all posts
October 7, 2025
Occasional X: The futile attempt to recycle behavioral economics (VIII)
March 5, 2019
Too much ado about deficit spending
Comment on Kenneth Rogoff on ‘Modern Monetary Nonsense’*
Blog-Reference and Blog-Reference Mar 6 and Blog-Reference Mar 8
For some time now, MMTers are shouting from the rooftops that deficit-spending/money-creation is the solution to almost all economic/social/environmental problems or, in the words of Kenneth Rogoff, to use “the Fed’s balance sheet as a cash cow to fund expansive new social programs, especially in view of current low inflation and interest rates.”
This is indeed stupid for several reasons:
• The government, needless to emphasize, is well aware of the advantages of deficit-spending/money-creation but plans to exploit them for other purposes. What naive MMTers do not know is that the free fiscal space is not free at all but has already been allocated “to fight a financial crisis, respond to a large-scale natural disaster or pandemic, or mobilize for a physical conflict or cyberwar.”
• “The US is lucky that it can issue debt in dollars, …” There is no use to awaken foreign suckers to the fact that they are taken for a ride. “If investors become more reluctant to hold a country’s debt, they probably will not be too thrilled about holding its currency, either.”
• Don’t rock the Fake-America-Great-Again boat: “For the moment, the world is quite content to absorb more dollar debt at remarkably low interest rates. How to exploit this increased US borrowing capacity is ultimately a political decision.” Not waiting for MMT-twits, this decision has already been taken for the benefit of the one-percenters.
• In addition: “The right approach … is for the government to extend the maturity structure of its debt, borrowing long-term instead of short-term.” Because the longer the maturity, the higher the interest rate for the bondholders, i.e. the one-percenters.
• In addition: “And if things get really difficult, it is far easier to inflate down the value of captive long-term debt … than it is to inflate away short-term debt, …” No need for MMTers to shout around that it is NOT the US government that will go broke and that public debt will never be repaid.#1
• Finally: “Misguided ideas may yet drag the issue of US central-bank independence to center stage, …” Even naive MMTers must understand that the last thing anyone wants is a discussion about who runs and should run the central bank.
So, MMTers get it, although your ideas “have a grain of truth” it is “just nuts” to make so much fuss about it.#2 A public debt of $22 trillion should tell you that FED/TREASURY know already for a long time how to max out the no-limit public credit card without domestic/ foreign bondholders and the general public getting too nervous.#3 After all, because Public Deficit = Private Profit, the so-called free market economy hangs on the life-support of the State, i.e. on a smoothly growing public debt.
MMTers stand for aggressive deficit spending, and Kenneth Rogoff stands for moderate deficit spending. In the final analysis, all are in the same camp. And it is NOT the camp of WeThePeople.
Egmont Kakarot-Handtke
* Project Syndicate
#1 Some nasty MMT surprises behind the time horizon
#2 MMT: The art of shooting oneself in the head
#3 MMT, money creation, stealth taxation, and redistribution
Related 'MMT-Refutation for Dummies' and 'Paul’s and Stephanie’s economic delirium talk' and 'A battle for hearts and minds ― economics redefined' and 'How counterfeiters save America with an extra profit and make WeThePeople pay for it' and 'MMT ― backstop or advanced life support for the Oligarchy?' and 'MMT: An overdose of public-debt tranquilizers for WeThePeople' and 'Fraud comes always in the cloak of philanthropy, salvation, or threat of doom'.
Blog-Reference and Blog-Reference Mar 6 and Blog-Reference Mar 8
For some time now, MMTers are shouting from the rooftops that deficit-spending/money-creation is the solution to almost all economic/social/environmental problems or, in the words of Kenneth Rogoff, to use “the Fed’s balance sheet as a cash cow to fund expansive new social programs, especially in view of current low inflation and interest rates.”
This is indeed stupid for several reasons:
• The government, needless to emphasize, is well aware of the advantages of deficit-spending/money-creation but plans to exploit them for other purposes. What naive MMTers do not know is that the free fiscal space is not free at all but has already been allocated “to fight a financial crisis, respond to a large-scale natural disaster or pandemic, or mobilize for a physical conflict or cyberwar.”
• “The US is lucky that it can issue debt in dollars, …” There is no use to awaken foreign suckers to the fact that they are taken for a ride. “If investors become more reluctant to hold a country’s debt, they probably will not be too thrilled about holding its currency, either.”
• Don’t rock the Fake-America-Great-Again boat: “For the moment, the world is quite content to absorb more dollar debt at remarkably low interest rates. How to exploit this increased US borrowing capacity is ultimately a political decision.” Not waiting for MMT-twits, this decision has already been taken for the benefit of the one-percenters.
• In addition: “The right approach … is for the government to extend the maturity structure of its debt, borrowing long-term instead of short-term.” Because the longer the maturity, the higher the interest rate for the bondholders, i.e. the one-percenters.
• In addition: “And if things get really difficult, it is far easier to inflate down the value of captive long-term debt … than it is to inflate away short-term debt, …” No need for MMTers to shout around that it is NOT the US government that will go broke and that public debt will never be repaid.#1
• Finally: “Misguided ideas may yet drag the issue of US central-bank independence to center stage, …” Even naive MMTers must understand that the last thing anyone wants is a discussion about who runs and should run the central bank.
So, MMTers get it, although your ideas “have a grain of truth” it is “just nuts” to make so much fuss about it.#2 A public debt of $22 trillion should tell you that FED/TREASURY know already for a long time how to max out the no-limit public credit card without domestic/ foreign bondholders and the general public getting too nervous.#3 After all, because Public Deficit = Private Profit, the so-called free market economy hangs on the life-support of the State, i.e. on a smoothly growing public debt.
MMTers stand for aggressive deficit spending, and Kenneth Rogoff stands for moderate deficit spending. In the final analysis, all are in the same camp. And it is NOT the camp of WeThePeople.
Egmont Kakarot-Handtke
* Project Syndicate
#1 Some nasty MMT surprises behind the time horizon
#2 MMT: The art of shooting oneself in the head
#3 MMT, money creation, stealth taxation, and redistribution
Related 'MMT-Refutation for Dummies' and 'Paul’s and Stephanie’s economic delirium talk' and 'A battle for hearts and minds ― economics redefined' and 'How counterfeiters save America with an extra profit and make WeThePeople pay for it' and 'MMT ― backstop or advanced life support for the Oligarchy?' and 'MMT: An overdose of public-debt tranquilizers for WeThePeople' and 'Fraud comes always in the cloak of philanthropy, salvation, or threat of doom'.
February 8, 2019
The day when WeThePeople sends debt-deranged economists to hell
Comment on Bradford DeLong on ‘Debt Derangement Syndrome’
Blog-Reference and Blog-Reference
After some name-dropping (Rogoff, Blanchard) and False-Hero-Worshipping (eminent, highly knowledgeable) the applause-troll Bradford DeLong offers a piece of economic wisdom: “Whenever the private sector stops spending enough to keep unemployment low and jobs easy to find, the public sector needs to fill the gap in aggregate demand.”
Now, good old Keynesianism stood under the premise of temporary deficit spending with budget-balancing over the business cycle. Somehow this did not happen and government debt rose worldwide faster than GDP. A permanently growing public debt means that a market economy is on the permanent life-support of the State. Some people got the uneasy feeling that permanent debt growth is unhealthy and cannot go on forever. They blew the panic whistle several times in the past decade but were always proven wrong.
At present, the loudspeakers of the profession are deeply relaxed and Bradford DeLong scolds the scaremongers: ”I now have hope that future economists will remember the sorry history of this past decade and prevent it from being repeated.”
In his utter scientific incompetence, Bradford DeLong completely ignores the massive immediate and delayed distributional effects of growing public debt.
To make the argument short, the macroeconomic Profit Law is given as Q≡Yd+(I−S)+(G−T)+(X−M) which reduces to Q=(G−T) with Yd, I, S, X, M blanked out for a moment. The reduced Profit Law says that the profit of the business sector as a whole Q is equal to the deficit (G−T) of the public sector. In a nutshell: Public Deficit = Private Profit. In other words, permanent public deficit-spending is a permanent free lunch for the Oligarchy.
As a rule of thumb, the financial wealth of the Oligarchy grows in lockstep with the public debt. In other words, fabulous wealth is the mirror image of fabulous public debt ($21.5 trillion).
The deficit spending on social measures does NOT benefit WeThePeople as a whole because the benefits of one group are paid for in real terms through unnoticeable stealth taxation via the price mechanism by the complementary group.
The permanent free lunch for the Oligarchy is beefed up with interest on a permanently rolled-over growing public debt. This amounts to reversed progressive taxation of WeThePeople by the IRS on behalf of the Oligarchy.
Finally, the national debt is NOT savings of WeThePeople but deferred taxes. In order to eventually redeem the national debt, the government has to eventually tax WeThePeople. This will be the day when WeThePeople sends debt-deranged economists to hell.
Egmont Kakarot-Handtke
Blog-Reference and Blog-Reference
After some name-dropping (Rogoff, Blanchard) and False-Hero-Worshipping (eminent, highly knowledgeable) the applause-troll Bradford DeLong offers a piece of economic wisdom: “Whenever the private sector stops spending enough to keep unemployment low and jobs easy to find, the public sector needs to fill the gap in aggregate demand.”
Now, good old Keynesianism stood under the premise of temporary deficit spending with budget-balancing over the business cycle. Somehow this did not happen and government debt rose worldwide faster than GDP. A permanently growing public debt means that a market economy is on the permanent life-support of the State. Some people got the uneasy feeling that permanent debt growth is unhealthy and cannot go on forever. They blew the panic whistle several times in the past decade but were always proven wrong.
At present, the loudspeakers of the profession are deeply relaxed and Bradford DeLong scolds the scaremongers: ”I now have hope that future economists will remember the sorry history of this past decade and prevent it from being repeated.”
In his utter scientific incompetence, Bradford DeLong completely ignores the massive immediate and delayed distributional effects of growing public debt.
To make the argument short, the macroeconomic Profit Law is given as Q≡Yd+(I−S)+(G−T)+(X−M) which reduces to Q=(G−T) with Yd, I, S, X, M blanked out for a moment. The reduced Profit Law says that the profit of the business sector as a whole Q is equal to the deficit (G−T) of the public sector. In a nutshell: Public Deficit = Private Profit. In other words, permanent public deficit-spending is a permanent free lunch for the Oligarchy.
As a rule of thumb, the financial wealth of the Oligarchy grows in lockstep with the public debt. In other words, fabulous wealth is the mirror image of fabulous public debt ($21.5 trillion).
The deficit spending on social measures does NOT benefit WeThePeople as a whole because the benefits of one group are paid for in real terms through unnoticeable stealth taxation via the price mechanism by the complementary group.
The permanent free lunch for the Oligarchy is beefed up with interest on a permanently rolled-over growing public debt. This amounts to reversed progressive taxation of WeThePeople by the IRS on behalf of the Oligarchy.
Finally, the national debt is NOT savings of WeThePeople but deferred taxes. In order to eventually redeem the national debt, the government has to eventually tax WeThePeople. This will be the day when WeThePeople sends debt-deranged economists to hell.
Egmont Kakarot-Handtke
September 19, 2015
Economists vs Economics
Comment on Dani Rodrik on ‘Economists vs. Economics’
Blog-Reference
The diversity of contradicting economic models is the very proof that economics is a failed science. Everybody knows by now that clueless model bricolage is simply a ridiculous exercise or what Feynman aptly called cargo cult science: “They're doing everything right. The form is perfect. ... But it doesn't work.” (Wikipedia)
Economists never grasped what science is all about. What the insiders of the profession think of their dilettantish constructs is just as irrelevant as what the busy producers of epicycles thought of their geocentric paradigm.
Science is defined by material and formal consistency. Economics fails on both counts. There is no way around Joan Robinson’s conclusion: Scrap the lot and start again.
Egmont Kakarot-Handtke
Blog-Reference
The diversity of contradicting economic models is the very proof that economics is a failed science. Everybody knows by now that clueless model bricolage is simply a ridiculous exercise or what Feynman aptly called cargo cult science: “They're doing everything right. The form is perfect. ... But it doesn't work.” (Wikipedia)
Economists never grasped what science is all about. What the insiders of the profession think of their dilettantish constructs is just as irrelevant as what the busy producers of epicycles thought of their geocentric paradigm.
Science is defined by material and formal consistency. Economics fails on both counts. There is no way around Joan Robinson’s conclusion: Scrap the lot and start again.
Egmont Kakarot-Handtke
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