Bill Mitchell’s political agenda has been and still is: the destruction of the European Union, fighting budget balancers all over the world, boosting deficit-spending/money-creation all over the world, and telling the general public that all this is for the benefit of WeThePeople.
Bill Mitchell calls himself a Progressive but MMT policy does NOT benefit WeThePeople but the Oligarchy. This is because of the macroeconomic Profit Law which implies Public Deficit = Private Profit and Public Debt of WeThePeople ≈ Financial Wealth of the Oligarchy. This implies that Austerity is bad for the Oligarchy and deficit-spending/money-creation is bad for WeThePeople.#1
Accordingly, Germany with her Black-Zero commitment is MMT’s arch-enemy.#2 Even more so, after Mr. Corbyn has been finished off in Britain.#3-#6
Bill Mitchell gives budget balancers the whip: “The interesting point, apart from the sheer idiocy of the German position, is that the way we think about these flows for Germany or any nation that uses a foreign currency is different to the way we would construct the situation for a currency-issuing government such as Australia or the UK. In both cases, a fiscal surplus means a net withdrawal of spending power by the government which squeezes the non-government sector for liquidity, and, once the transactions are completed causes non-government financial wealth to decline overall. But in the case of Germany, which uses the euro as a foreign currency, the surplus allows it to put the excess flow into bank accounts somewhere and increase its spending power in periods ahead. … The stock adjustments that accompany this result forces a reduction in net financial assets in the non-government sector and a reduction in debt-issuance, if the government is, unnecessarily, matching the deficits with debt sales.”
It is almost impossible to detect economic fraud in this argument. In order to see it, one has to replace the term non-government sector with business sector/Oligarchy: “… a fiscal surplus means a net withdrawal of spending power by the government which squeezes the BUSINESS sector for liquidity, and, once the transactions are completed causes OLIGARCHY financial wealth to decline overall.” and “The stock adjustments that accompany this result forces a reduction in net financial assets in the BUSINESS sector and a reduction in debt-issuance …”
As an agent of Oligarchy#7, Bill Mitchell cannot give Germany a pass but has to apply the defamation whip with the utmost rigor. This is pathetic theatrics because from the scientific standpoint Modern Monetary Theory is nothing but a load of proto-scientific garbage and MMT policy is a case for the application of RICO laws on academia.#8
With the reduction of the public debt, Germany has virtually eliminated the national/ international Oligarchy’s space for present/future financial suppression/blackmail. The Swabian Housewife has, at least for the time being, successfully outwitted Wall Street’s loan sharks.‡
* Billy Blog
#1 Links on Austerity
#2 Swabian housewife vs Wall Street loan shark
#3 MMT: Corbynism is dead, British Labour is next
#4 Mission accomplished: Economists as useful idiots of the Oligarchy
#5 Economic backstabbing: Bill Mitchell hits again
#6 Is MMT Alt-Right? No, worse, it is fake science
#7 Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks
#8 For the full-spectrum refutation of MMT see cross-references MMT
You say: “Bill Mitchell wants Germany to spend more on infrastructure …”
The decision about infrastructure spending in Germany is the business of the Legitimate Sovereign of Germany. What Bill Mitchell wants is irrelevant.
All the more so as Bill Mitchell is known to be an incompetent scientist who applies in his recent textbook a sectoral balances equation that is provably false since Keynes.
So, Germany and the rest of the world wants Bill Mitchell/Stephanie Kelton/Warren Mosler/Dirk Ehnts/etcetera to learn elementary algebra before they go on their deficit-cheerleading tours and, most of all wants that Australia spends more on her poor educational infrastructure and — dream of all dreams — keeps her academic imbeciles in the country.
You say: “Bill has math degree.”
“Economics is the study of the economy, not the study of economists.” (Ricardo Reis)
So, your argument “Bill has math degree” is irrelevant for the point at issue. The point is that Bill and the other MMT academics are too stupid for the elementary algebra that underlies macroeconomics. Obviously, this applies also to you. For a mathematically competent person, it is not too hard to understand that the MMT sectoral balances equation is false after following through the proof.
My conclusion from your irrelevant personal information “Bill has math degree” is that he must have gotten it from Trump University.
You say: “Egmont are you saying the surplus is good because it denies EUR to the “neoliberals!” Or “orligachy!” or wtf? Is that your basic point?”
The basic points are
- MMT macroeconomics is algebraically false. Therefore the propaganda line Government Deficit = Non-Government Surplus is provably false.
- Correct macro-accounting tells one that Public Deficit = Private Profit and as a consequence Financial Wealth of the Oligarchy = Public Debt of WeThePeople.
- So, the MMT policy of deficit-spending/money-creation is for the benefit of the Oligarchy. The empirical proof is the actual distribution of income/financial wealth.
- Thus, the MMT claim that MMTers are fighting for the benefit of WeThePeople is a political fraud.
You say: “Youre against ‘the oligarchy!’ (ie youre a conspiracy theorist like the rest of the morons here...)”
I use the term Oligarchy descriptively in the classical Greek sense as defined in Wikipedia.#1
Oligarchy is a term of Political Science. Because economics is dealing with the economy and NOT with politics, the ‘Oligarchy’ is of NO particular interest in the present context. To paraphrase: Economics is the study of the economy and NOT the study of economists and NOT the study of the Oligarchy.
A key concept for the study of the economy is profit. Now, it is a provable fact that Modern Monetary Theory gets profit wrong. Because MMT gets the foundational macroeconomic concepts wrong the whole analytical superstructure is scientifically worthless. As a consequence, MMT policy guidance has NO sound scientific foundations. From this follows that academic MMTers are out of science.
This raises the question of why they are busily touring the world and spreading provably false claims about the public deficit and the public debt and actively fighting against legitimate representatives of WeThePeople like Mr. Corbyn, for example.#2
Wikipedia continues with the description of present-day Oligarchy: “Simon Johnson wrote that ‘the reemergence of an American financial oligarchy is quite recent’, a structure which he delineated as being the ‘most advanced’ in the world. Jeffrey A. Winters wrote that ‘oligarchy and democracy operate within a single system, and American politics is a daily display of their interplay.’ The top 1% of the U.S. population by wealth in 2007 had a larger share of total income than at any time since 1928. In 2011, according to PolitiFact and others, the top 400 wealthiest Americans ‘have more wealth than half of all Americans combined.’”
This “financial oligarchy” is the intended or unintended product of the MMT policy of deficit-spending/money-creation. Everyone with basic mathematical competence can read this directly off the axiomatically correct macroeconomic Profit Law.
Whether the agenda-pushing of MMTers for the benefit of the Oligarchy is unintended or intended needs further research. This research is beyond the purview of economics. Economics is about how the economy works and NOT about how the Oligarchy works.
As a rule of thumb from history since the ancient Greeks, one can derive with a high probability the conclusion that almost all people who claim to fight for WeThePeople are actually agenda pushers for the Oligarchy. Because of the macroeconomic Profit Law, i.e. Public Deficit = Private Profit, this applies in any case to the academic MMT loudspeakers Bill Mitchell and Stephanie Kelton.
#1 Wikipedia “Some contemporary authors have characterized current conditions in the United States as oligarchic in nature.”
#2 MMT: Corbynism is dead, British Labour is next
News for you directly from Zerohedge: “There is no hiding anymore, the United States has become an oligarch owned banana republic with nukes, …”
Public deficit-spending/money-creation is a free lunch program for the Oligarchy. The fact is that the market economy is already for a long time on the life support of the State. Profit is in the main produced by public deficits. The Oligarchy, in turn, uses the opulent free lunches to corrupt the State’s legislative, executive, judiciary institutions in its favor. This constitutes a positive feedback loop and this, in turn, explains the exponential deterioration of distribution.
MMT policy is instrumental in this vicious circle. MMT is no good for WeThePeople.
REPLY to Ralph Musgrave on Jan 19
You say: “The truth is that when government spends on a new bridge or whatever, the ratio of money going to employers and employees is the same as for any other type of spending: i.e. a large majority goes to EMPLOYEES.”
Yes, this is common knowledge but absolutely irrelevant for the point at issue.
What you are doing is trivial micro, what has to be done is macro. In other words, you need a total picture.
The total picture tells one that the employees not only get income Yw but that they also spend C. And for the profit of the business sector as a whole Q only the BALANCE of the household sector counts, i.e. Q≡C−Yw, S≡Yw−C. Take notice that wage income Yw is a FLOW and that profit Q is a BALANCE. You should know the difference from Accounting 101.
With the government deficit/surplus included one has Q≡(G−T)−S. This gives Public Deficit = Private Profit when the household sector is for a moment taken out of the picture, i.e. S=0. In this case, the BALANCE of the business sector is equal to the BALANCE of the government sector. The flow of wage income Yw is IMPLICIT in the balances.
The truth is that your comment proves your bottomless stupidity.
You say: “Here’s news for you: there’s no such thing as ‘social justice’.”
Take notice that ‘social justice’ is a political concept. Now, there is the political realm and the scientific realm and both are disjunct. In the political realm, there is left/right, in the scientific realm there is true/false and NOTHING else.
“Economics is the study of the economy, not the study of economists.” (Ricardo Reis)
The sectoral balances equation describes the interdependencies of the macroeconomic balances. I have given the proof that the MMT balances equation is false. Because MMTers get the foundational macroeconomic relationship wrong the whole analytical superstructure of MMT is false. And from this follows that MMT policy guidance has NO sound scientific foundations. And from this follows that MMT is NOTHING more than political propaganda. And from this follows that MMT academics are NOT scientists but political fraudsters.
From the fact that this is not a big problem for you, I infer that you are as intellectually corrupt as the MMT academics.
Whoever thinks that my proof is false and can point to the exact spot is welcome. No valid refutation of the axiomatically correct balances equation#1 has been presented to this day.
Your comment is silent about how the monetary economy works. You do not even understand the point at issue but get lost in meta-communication about how to communicate with imbeciles. And this proves that you have NO idea of what science is all about.
You say: “Like Karl Marx and many other leftists you have a fetish for social equality.” Here’s news for you: Marx, too, got profit wrong and because of this Marxianism, too, is proto-scientific garbage — just like MMT and Walrasianism and Keynesianism and Austrianism and Orthodoxy and Heterodoxy and Pluralism and Hegel and Freud and the Analytische Sozialkritik.
#1 Wikimedia AXEC118d