AXEC: New Foundations of Economics: MMT

Showing posts with label MMT. Show all posts

June 19, 2026

Occasional X: Clueless economists / Science (CCCXLVI)

“The tax is there to create a demand for the government’s currency. Before anyone can pay the tax, someone has to do the work to earn the currency.” (Stephanie Kelton)

“… this one neat trick to control an entire population.” (Robert Murphy)

This is the usual psychologism,…
— AXEC (@EgmontHandtke) June 19, 2026

“How is what I said about Kelton any different from what you said about me?” (Robert Murphy)

As a matter of principle, what you or I or anybody else said about Stephanie Kelton is irrelevant. Economics is not gossip about people but an analysis of the economic system. As Ricardo…
— AXEC (@EgmontHandtke) June 19, 2026

The point is that your economics, and that of MMT, is proven to be false, and that you are engaging in silly psychologism. What anybody's motives are is irrelevant as far as economics as a science is concerned. Your posts are disinfotainment.
— AXEC (@EgmontHandtke) June 20, 2026

June 17, 2026

Occasional X: The futile attempt to recycle MMT (CCIV)

“Jay Forrester, the father of System Dynamics, believed that in order to change a state's course on an issue, you have to change public perception first. To me, this is exactly what MMT community and fantastic ppl such as Stephanie Kelton have been doing.” (Shahin Ashkiani)…
— AXEC (@EgmontHandtke) June 17, 2026

May 8, 2026

Occasional X: The futile attempt to recycle MMT (CCIII)

“Did you not just recreate MMT’s 'public dept is private net savings' from first principles?” (Doxasryx)

No.

For MMT's full-spectrum refutation, see
Cross-references: MMThttps://t.co/eXlgPKrinA
— AXEC (@EgmontHandtke) May 7, 2026

May 4, 2026

Occasional X: The futile attempt to recycle MMT (CCII)

You don't need a book to refute MMT. The two fatal mistakes are:

• The MMT balances equation is provably false.
• The MMT policy of deficit spending/money creation is to the advantage of WeTheOligarchy and the disadvantage of WeThePeople.

MMT is scientifically and politically… pic.twitter.com/27xR0GAlRc
— AXEC (@EgmontHandtke) May 4, 2026

Occasional X: The futile attempt to recycle MMT (CCI)

“I doubt your little pamphlet debunks the extremely erudite Textbook, MACROECONOMICS, by PHD MMT Economists from the USA & Australia, Professor s Mitchell, Wray, & Watts!” (Theresa Sanders)

The MMT textbook has already been refuted. Theresa Sanders is somewhat behind the curve.…
— AXEC (@EgmontHandtke) May 3, 2026

May 2, 2026

Occasional X: Clueless economists / Science (CCCV)

“None of these accounting details alter the consolidated government budget constraint, the intertemporal solvency condition, or the equilibrium conditions pinning down prices and quantities.” (MFZ)

The founding fathers have defined economics as a social science, and accordingly,… pic.twitter.com/RQEJRKErvz
— AXEC (@EgmontHandtke) May 2, 2026

Occasional X: The futile attempt to recycle MMT (CC)

For MMT's full-spectrum debunking, see
Cross-references: MMThttps://t.co/eXlgPKrinA
— AXEC (@EgmontHandtke) May 2, 2026

Occasional X: Clueless economists / Science (CCCI)

“Modern Monetary Theory #mmt is a seductive economic theory that's making the rounds around the world. It was popularized by Stephanie Kelton …” (Emmanuel Maggiori, quoted by Douglas Padgett)

There is no such thing as MMT's Private Sector, but only the household sector and the… pic.twitter.com/AI1G12TeUj
— AXEC (@EgmontHandtke) May 2, 2026

The posts are from 2017/2016. The time between MMT's unassailable refutation and its abolishment is a metric for economists' stupidity/corruption. Actually, MMT's precursors have already been provably false.

Strictly speaking, economics violates scientific standards since the founding fathers.

“In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern, 1941)

April 29, 2026

Occasional X: The futile attempt to recycle MMT (CXCIX)

“The free market economy uses money, which is in fact a public monopoly.” (Megas Alexandros)

You understand nothing. To begin with, there are two monies: Central Bank money and Commercial Bank money.
— AXEC (@EgmontHandtke) April 29, 2026

Occasional X: The futile attempt to recycle MMT (CXCVIII)

“Mmt is a mechanism that is currently occurring, it is not an ideology!” (Mathew Rouge)

Yes, it's a mechanism, more exactly, balances mechanics, but MMTers misrepresent it intentionally by inventing the “Private Sector”. MMT is not an ideology but a fraud. See the post…
— AXEC (@EgmontHandtke) April 29, 2026

April 28, 2026

Occasional X: Clueless economists / Money (CXXXIV)

“If you studied economics and learned about loanable funds theory and quantity theory of money, but didn't learn about reserve accounting, private debt or govt monetary operations, then you were taught a bunch of outdated crap.” (MMT for Progressives)

Yes, the loanable funds…
— AXEC (@EgmontHandtke) April 28, 2026

April 23, 2026

Occasional X: The futile attempt to recycle MMT (CXCV)

“And MMT reveals that the public deficit is only currently good for the oligarchy and that spending needs to be redirected for public purpose and for sustainability of our modern living. Kenton’s ‘The deficit is always good for someone’ epitomises this point!” (D Laws)

Dear MMT…
— AXEC (@EgmontHandtke) April 23, 2026

Private banks can create money just like the Central Bank. It is no coincidence that the Industrial Revolution and the explosive growth of the bankings system happened at the same time.

For details, see
Basics of monetary theory: the two monieshttps://t.co/I3icKeOQLP
— AXEC (@EgmontHandtke) April 23, 2026

April 16, 2026

Occasional X: Clueless economists / Science (CCXCXXII)

“Public debt is not debt; it is simply the amount of money injected by the States through their public spending and which becomes savings for families and businesses.” (Eduardo Garzon, quoted by ?whispers?)

No, that's decrepid macroeconomics. The axiomatically correct… pic.twitter.com/UOP4NeVPpS
— AXEC (@EgmontHandtke) April 16, 2026

Occasional X: The futile attempt to recycle MMT (CXCIII)

MMTers are confusing sequence with balance.

Whether spending G or taxes T comes first is a liquidity issue. In a period of given length, not the sequence but the balance between the household sector and the government sector is relevant. The 3-sector Profit Law…
— AXEC (@EgmontHandtke) April 16, 2026

April 8, 2026

Occasional X: The futile attempt to recycle MMT (CXCII)

“The correct identity is (S−I)=(G−T)+(X−M).” (?whisper?)

No. The balance of the business sector Qm is missing. ⇓ Qm is the most important balance in Capitalism. MMT's equation was refuted long ago.

Rectification of MMT macro accountinghttps://t.co/zze3NFF9Ap

Learn to… pic.twitter.com/7snfViUJJi
— AXEC (@EgmontHandtke) April 8, 2026

April 7, 2026

Occasional X: The futile attempt to recycle MMT (CXCI)

“MMT isn’t left or right – it is simply an accurate description of the way our economy works since we left the gold standard.” (David McNab)

No! The description of the economy is not accurate; more specifically, MMTers messed up macroeconomics. Because MMTers are too stupid for…
— AXEC (@EgmontHandtke) April 7, 2026

Occasional X: Clueless economists / Money (CXXVI)

“Deficit spending=money hoarding. By identity.” (Warren Mosler)

This is nonsensical. MMTers never understood the interaction of macroeconomic balances.

The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law / Balances… pic.twitter.com/Gc4HkTbs38
— AXEC (@EgmontHandtke) April 7, 2026

March 19, 2026

Occasional X: The futile attempt to recycle MMT (CXC)

“Taxes do not 'raise money' they destroy money. Framing is important.” (MMT for Progressives)

This is the usual MMT blubber.

Correction: A government budget deficit (G−T)>0 creates money; a surplus destroys money.

For MMT's full-spectrum refutation, see
Cross-references: MMT…
— AXEC (@EgmontHandtke) March 19, 2026

March 4, 2026

Occasional X: The foul spirit of political economics (CCXXX)

“You forgot Yan Liang. Another strong female MMT economist.” (Thibault Laurentjoye)

There is no such thing as a 'strong female MMT economist'. All MMT genders are weak-brained political agenda pushers. They do not understand how the economic system works.

The free-market…
— AXEC (@EgmontHandtke) March 4, 2026

March 1, 2026

Occasional X: The foul spirit of political economics (CCXXVIII)

“Paranoia is only an appropriate diagnosis if your fears are unfounded.” (MMT for Progressives)

Whatever this is, it is not economics.

MMT for Progressives does not understand profit and, as a logical consequence, how the economic system works. This is self-disqualifying.

The…
— AXEC (@EgmontHandtke) March 1, 2026

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Knowledge only — no opinion

Science does not explain everything, but non-science explains nothing.

Neither orthodox nor heterodox economics satisfies the scientific criteria of material and formal consistency.

Economists cannot explain how the economy works. The Profit Theory is false since Adam Smith. There is much opinion and little knowledge.

Opinion is the realm of political economics, knowledge is the realm of theoretical economics.

Political economics is scientifically worthless.

Theoretical economics is built upon clearly stated premises, i.e., upon a set of axioms.

Orthodoxy got the axiomatic foundations wrong and Heterodoxy has none at all.

Economics is a failed science. Economists are incompetent scientists.

Profit

Neither Classicals, nor Walrasians, nor Marshallians, nor Marxians, nor Keynesians, nor Institutionialists, nor Monetary Economists, nor MMTers, nor Austrians, nor Sraffaians, nor Evolutionists, nor Game theorists, nor EconoPhysicists, nor RBCers, nor New Keynesians, nor New Classicals ever came to grips with profit. Hence, they all fail to capture the essence of the market economy.

Because of this, economists have nothing to offer in the way of a scientifically founded economic policy guidance.

The hybrid science

As a first approximation, one can agree on the general characteristic that the economy is a complex system.

However, with the term system one usually associates a structure with components that are non-human. In order to stress the obvious fact that humans are an essential component of the economic system the market economy should be characterized more precisely as a complex hybrid human/system entity.

The scientific method is straightforwardly applicable to the sys-component but not to the hum-component. While it is clear that the economy always has to be treated as an indivisible whole, for good methodological reasons the analysis has to start with the objective system-component.

In gestalt-psychological terms the economic system is the foreground, individual behavior the background. Common sense wrongly insists that the hum-component must always be in the foreground. This fallacy compares to geo-centrism. The economic system has its own logic which is different from the behavioral logic of humans. The systemic logic is what Adam Smith called the Invisible Hand.

There are systemic laws but no behavioral laws. Systemic laws have the same methodological status as physical laws.

Neither Orthodoxy nor Heterodoxy can tell what the systemic laws of the actual monetary economy are.

Whether the outcome of the human/system-interaction is good or bad is a politcal question that lies outside of theoretical economics. Theoretical economics explains how the actual economy works - no less, no more.

Narrative vs.Theory

Psychological, sociological or behavioral assumptionism cannot yield anything other than a gossip model of the world. Second-guessing the agents is not economic analysis.

Science deals exclusively with propositions that can in principle be decided by objective means. The rest is opinion, faith, phantasy, motive speculation, allegation, hallucination, myth, paranoia, ink-blot association, psychology, philosophy, in one word: storytelling.

Storytelling is the original mode of communication in the social realm — except science.

Political economics is storytelling and, by default, the natural habitat of confused confusers. Walrasianism, Keynesianism, Marxianism, Austrianism are social narratives and not scientifically valid representations of reality.

"The truth is, most persons, not excepting professional economists, are satisfied with very hazy notions." (Fisher)

In marked contrast, theoretical economics lives up to the standards of material and formal consistency. A scientific theory is the best mental representation of reality that is humanly possible.

Theory starts with a set of objective and consistent axioms.

Paradigm Shift

"The problem is not just to say that something might be wrong, but to replace it by something — and that is not so easy." (Feynman)

"As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction." (Nell)

"The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory." (Blaug)

"Is it not a fact, which stares at us from the histories of all sciences, that it is much more difficult for the human mind to forge the most elementary conceptual schemes than it is to elaborate the most complicated superstructure when those elements are well in hand?" (Schumpeter)

"The task of producing knowledge against the grain requires imagination." (Mirowski)

"A new idea is extremely difficult to think of. It takes a fantastic imagination." (Feynman)

"The scientific imagination dreams of explanations and laws." (Peirce)

"It is brilliance of imagination which makes the glory of science." (Evans)

"... we know little more now about ‘how the economy works,’ ... than we knew in 1790, after Adam Smith completed the last revision of The Wealth of Nations." (Clower)

Selftest and to watch for

You apply one of these items

• supply-demand-equilibrium,

• general equilibrium,

• marginal utility,

• well-behaved production functions,

• total income = value of output,

• total income = wages + profits,

• I=S,

• wage rate down - employment up,

• behavioral axioms?

Then you are out of science because of unnoticed material or formal inconsistency.

Every economist who uses the concept of equilibrium is scientifically incompetent because she/he failed to notice that equilibrium is an economic nonentity.

Practically this means: as soon as the word equilibrium appears in an economic text it can be thrown into the waste basket. The same holds for all other nonentities.

The vast majority of economists deals mainly with nonentities. This is why Walrasianism, Keynesianism, Marxianism, Austrianism is scientifically worthless.

Since Adam Smith, economic policy guidance has no sound scientific foundations.

To be replaced (1)

The core premises of Orthodoxy are uncertain and false and this fully explains the failure of the research program.

“As with any Lakatosian research program, the neo-Walrasian program is characterized by its hard core, heuristics, and protective belts. Without asserting that the following characterization is definitive, I have argued that the program is organized around the following propositions: HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)

The inescapable Paradigm Shift consists of the move from this obsolete hard core to the superior set of structural axioms.

To be replaced (2)

The fundamental equations of macroeconomics have been formulated by Keynes in two lines.

"Income = value of output = consumption + investment. Saving = income - consumption. Therefore saving = investment."

This elementary syllogism is demonstrably false. The demonstration consists in the proof that Keynes could not solve the Profit Puzzle. Neither did Post-Neo-New-Keynesians.

In the most general terms, the economics Paradigm Shift consists in switching from the behavior-centric bottom-up approach to the structure-centric top-down approach. This is comparable to the Copernican turn from geo-centrism to helio-centrism.

Consensus

Economics is a science without scientists. Because they are ignorant of the elementary difference between profit and income, the present generation of economists has not made and cannot make a significant contribution to the discussion about how the actual economy works.

Every orthodox or heterodox economist can convince himself/herself that their profit theory is defective.

Every non-economist can — by applying elementary logic — convince himself that conventional profit theories are false. See 'How the intelligent non-economist can refute every economist hands down'.

Because the profit theory is false the whole of conventional economic theory has to be rejected.

"What is now taught as standard economic theory will eventually disappear, no trace of it will remain in the universities or boardrooms because it simply doesn’t work: were it engineering, the bridge would collapse." (McCauley)

No scientist will ever accept Walrasianism, Keynesianism, Marxianism, or Austrianism. These approaches are logically and/or empirically refuted. This is the actual methodological state-of-art. Walrasians, Keynesians, Marxians, or Austrians are still at the proto-scientific stage. These approaches cannot be improved, only abandoned.

Economists are a public nuisance because they have an opinion on everything but knowledge of nothing.

About me

“Bottom line is that your profit law is just a definition you made up nobody else agrees with, nobody. You are all alone with your precious tautology.” Barkley Rosser

“In any event, your entire theory is based on you doing macro accounting in wacky fashion that nobody agrees with.” Brian Romanchuk

"Your stuff is at least original: it's quite cool after a couple of decades at this to see a fresh Economics. But real promises are not advanced: they were around for millennia until the Greeks obscured them with Metaphysics." Chris Cook

"No mate, they're you-blockers. You have all the personality traits of a crank, and the rest of them have tired of you. You could be 100% right, and you'd still die as your only follower." Steve Keen

"What you are doing fills is all with joy, your constructive critique is most welcome!"

Achim Truger,

German Council of Economic Experts,

in a failed attempt to be ironic

"200+ years of thought and yet you are the only one who gets it—or even understands your argument. Thank god we have you, pseudonymous Twitter user. Otherwise no one would know."

William Luther

Assistant Professor of Economics

in a failed attempt to be funny

"Egmonts profit law is the perfect equation that demonstrates this in action. Put the equation into a spreadsheet and then add government spending and watch how it flows into profits. Enter in some debt (-Sm) and watch too how that flows into profits. It can't go anywhere else."

Dean

About the rest of economics

Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, Pluralism are mutually contradictory, axiomatically false, materially/ formally inconsistent. Economics is a failed science.

“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” Leonardo da Vinci

In economics, the overwhelming majority belongs to Class III. This explains why economics is after 200+ years still at the proto-scientific level.

The obvious task for every economist is to advance from cargo cult science and political agenda-pushing to science. This is absolutely beyond the means of Class III people.

For 200+ years now, economists are not scientists but agenda pushers, useful idiots, clowns in the political Circus Maximus.

Nopopop

This blog does not add to any popular/un- popular opinion.

This blog does not hand out advice about how to avoid taxes, to get rich on the stock market, to be successful in business, to increase the wealth of nations, to run an economy, to maximize welfare, to prevent national/global bankruptcy, to improve the institutional setup of society, to get out of national/global depression, nor about how to save humankind or any subgroup thereof.

This blog is about the true theory of the actual monetary economy.

"In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion." (Stigum)

Focus

Science is of primary interest and importance. Scientists are of secondary interest.

With regard to science, most people lose focus easily because of a natural preference for anecdotes and gossip over facts or subjectivity over objectivity.

Hence, Schumpeter once considered it necessary to remind his habitually disoriented fellow economists: “Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.”

Science is about true/false and nothing else.

Disclaimer

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Texts: Parts of arbitrary length of any of the author's texts is and will be used again by the author in papers, books, websites, blogs, and other media without explicit reference. The right to make corrections or minor textual improvements on reutilization is reserved. Therefore, it is always a good idea to double-check for the latest version.

Caution: Do not expect a corroboration of your political view. Neither a refutation. Political economics has been scientifically worthless since Adam Smith. Politics has to be separated from economics because it is categorically different from science. The best science can do and has always done is to prove beyond reasonable doubt that you have been objectively wrong or ignorant until now. Science goes beyond the naive common sense of today and becomes the sophisticated common sense of tomorrow.

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Outlook

To recall, while political economics is storytelling, theoretical economics adheres to scientific standards.

The first task of theoretical economics is to get the axiomatic foundations right. This is what J. S. Mill called the opus magnum. Neither Orthodoxy nor Heterodoxy came up with a reasonable solution to this day. This explains the secular stagnation of economics.

There is no serious alternative to structural axiomatic economics. This is not a matter of opinion but of proof. The sole criteria are material and formal consistency.

All of economics has to be reconstructed from the ground up.

Major economic policy implication

The price mechanism does not work as standard economics hypothesizes. The axiom-based Employment Law states that overall employment increases if the average wage rate increases relative to average price and productivity. This gives one the lever to improve the employment situation all over the world and to fend off deflation without rising debt and without artificial capacity growth. To increase the average price relative to the average wage rate and productivity increases unemployment.

Right policy depends on true theory.

“In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)

Lacking the true theory, economists promote for more than 200 years opinion instead of knowledge.