MMT: Distribution is the drawback NOT Inflation

Reminder on ‘Jonathan Portes — Nonsense economics: the rise of modern monetary theory’

Blog-Reference on Jan 31

Jonathan Portes is wrong with regard to inflation. See
► Gov-Deficits do NOT cause inflation
► MMT and the inflation-red-herring

The government deficit causes a one-off price hike, but NOT inflation. Repeating the deficit period after period leaves the price at an elevated level. This holds for the current output. Deficit spending on investment goods is an entirely different matter. Both cases are constantly confused.

The lethal effect of MMT policy is NOT on inflation but on DISTRIBUTION. See
► Stephanie Kelton on how to become fabulously wealthy

Anti-MMTers are just as incompetent as MMTers. So
► Debunking idiots does not prove that MMT is valid


Egmont Kakarot-Handtke


For details of the big picture, see cross-references Profit/Distribution.

For more about "tax the rich", see AXECquery.

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REPLY to Andrew Anderson on Jan 31

You say: “You seem to assume that deficits shall be financed with sovereign debt?”

No. In the elementary case, Public Deficit = Private Profit, deficit spending creates first business sector deposits (= money) and government sector overdrafts on the balance sheet of the Central Bank. Whether the overdrafts are consolidated by selling bonds is a separate question. See
► MMT: Not a joke but a fraud
REPLY to Bob Roddis on Jan 18

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REPLY to Clint Ballinger on Feb 1

You say: “As far as AXEC, his basic point that spending in more than we tax out is bad IF WE ALLOW IT to accumulate to wealthy hoarders of our public good ("money"), is correct. We need far higher taxes on the rich, not for "paying for things," but to stop the wealthy from corrupting our political system …”

You directly contradict the official MMT doctrine, which says “Don’t tax the rich.” See
► MMT: Academic snake oil for the people

MMTers like to have it both ways. Schizo is the very logic of the political agenda pusher.

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REPLY to Clint Ballinger on Feb 2

You say: “I think you need to show sources ― any sources at all ― that show "MMT" saying/writing "Don’t tax the rich." I doubt you can.”

I have given the source already above. Here it is again for the illiterate/retarded
► MMT: Academic snake oil for the people

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REPLY to Clint Ballinger on Feb 2

MMTers in general and Stephanie Kelton, in particular, have a problem. As useful idiots for the Oligarchy, they have preached for years now 'make deficits―don’t tax'. Taxes are NOT needed for spending, only for inflation control, and there is NO inflation.

But now this happens: Alexandria Ocasio-Cortez and Senator Elizabeth Warren come forward with a marginal tax rate of 70% and a new wealth tax.

From the MMT standpoint, this is madness the super-rich have to blame themselves for. See
► Stephanie Kelton and the self-destructive stupidity of the super-rich
► MMT is NOT bold policy but spineless fraud

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REPLY to Greg on Feb 2

You say: “Pointing out that playing a zero sum game of finding tax revenue from someone before you fund something else is unnecessary is not the same as saying ‘dont tax the rich’.”

No, it is NOT the same, and I never said so. The fact is that MMTers say (i) don’t tax for revenue and (ii) don’t tax the rich: “Bill Mitchell is politically consistent. He not only promotes deficit spending but also downplays the idea of taxing the rich and closing their tax havens: ‘Do we need the rich’s money?’ ‘No’” #1

As good foot soldiers of the Oligarchy, MMTers see to it that the rich get their profits via deficit-spending/money-creation, their interest on government bonds, which the IRS conveniently takes from WeThePeople, and that the rich’s tax rates are low and the loopholes are big, and that the foundations/charities/think tanks/lobbies are tax-exempt.

The thing is that billionaire folks like Pete Peterson are really so daft that they complain about deficit-spending/money-creation. Capitalism has already been for a long time on the life-support of public deficit-spending.* Zero deficit means zero macroeconomic profit. Any complaints of the Oligarchy about the State saving Capitalism from breakdown are pure madness.

On this point, Stephanie Kelton is right: “The Wealthy Are Victims of Their Own Propaganda.”

From the standpoint of simple self-interest and because of Public Deficit = Private Profit, the one-percenters and their useful academic idiots should consistently argue FOR deficit spending, and the ninety-nine-percenters and their useful academic idiots should consistently argue AGAINST it. #2

Curiously, it’s just the opposite.


#1 MMT: Academic snake oil for the people
#2 Austerity and the political games Progressives play

* Twitter Feb 2

Source: Twitter

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REPLY to Greg on Feb 3

Why don’t you simply follow the links given?

Bill Mitchell’s piece is titled: “The ‘tax the rich’ call bestows unwarranted importance on them.” and “Do we need the rich’s money?” "No".” and FULL NODE says “MMT agrees. Taxing rich people for revenue is a silly claim.” Richard Murphy says: “The time for pussy-footing with new taxes to extract a little more from the rich is yesterday’s news. There is no time for that. This is the time to create money for change.”

This is three MMTers speaking out against taxing the rich.

This answers Clint Ballingers’ silly challenge: “Although, I think you need to show sources ― any sources at all ― that show "MMT" saying/writing "Don’t tax the rich."

And what does Stephanie Kelton tell her fabulously wealthy friends? If you want to avoid taxes you must accept deficits and not complain about them like this brainless billionaire Pete Peterson.

She is right. Pete Peterson simply does not understand that MMT is a wellness program for the Oligarchy. #1

#1 MMT: Redistribution as wellness program

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Twitter Feb 11

For detailed arguments, see Dean Baker on CEPR MMT and Taxing the Rich.

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REPLY to Clint Ballinger on Feb 16

Taxing the rich is contrary to the MMT agenda. According to the macroeconomic Profit Law Q=(G−T), MMT’s deficit-spending/money-creation feeds the Oligarchy permanently with profit, and therefore it makes absolutely NO sense to tax it away.

Perhaps the MMT salespeople still believe that MMT is for the benefit of WeThePeople. The fact is that MMT is a wellness program for the Oligarchy. Everyone can check how MMTers consistently argued against taxing the rich before the Green New Deal propaganda hit the headlines. #1

The philosopher Tom Hickey quickly adapted to the new situation and came forward with a new version of Hegel’s cunning of reason: “‘Taxing the rich’ through progressive taxation has another reason. That is, limiting the political power of wealth and reducing inequality.”

The question to MMTers: Why not simply stop deficit-spending/money-creation, the very producer of profit, political power, financial wealth, and inequality?


#1 MMT: Distribution is the drawback NOT Inflation

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billy blog Jun 12

Does this mean that we shouldn’t ‘tax the rich’?

The present authors’ values indicate we are all for taxing the rich. But not to get their money.

Rather, the rich should pay higher taxes in order to deprive them of their purchasing power, which translates into economic and political power.

This is not a minor issue.

Ultimately, fuelling the notion that we need the rich folk’s money to ‘[pay for] our schools and our caring services’, as the likes of Jeremy Corbyn and John McDonnell never tire of repeating, is a dangerous and misguided narrative for progressives to engage in.

Not only because it fuels damaging myths about how the monetary system works, but also because it elevates the rich and high-income earners to an indispensable status that is unwarranted.

As Pavlina Tcherneva, from the Levy Economics Institute, notes in her excellent response to Doug Henwood’s rather loopy attack on MMT – MMT Is Already Helping (February 27, 2019):

I would say that Henwood (like other “tax-the-rich-to-pay-for-progress” lefties) is tethered to the wealthy by an imaginary umbilical cord that holds his progressive agenda hostage to his oppressors. To me, this is the definition of a self-induced paralysis.

Time to cut the cord. MMT has a profound emancipatory power and the Left would do well to awaken to its potential.

Progressives should come to terms with the fact that the incomes and taxes paid by the rich do not enhance the capacity of a currency-issuing government to provide first-class public services and infrastructure.

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Twitter Oct 13

Source: Twitter

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Naked Capitalism

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Twitter Oct 21, 2019

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Twitter Jan 23, 2020

Get it: MMT-Progressives don’t tax the rich

Comment on Bill Mitchell on ‘Tax the rich to counter carbon emissions not to get their money’#1

Blog-Reference

Economics is NOT a science but agenda-pushing for the Oligarchy. Academic economists are NOT scientists but useful idiots. This is obvious for orthodox/mainstream folks like Paul Krugman who is on the payroll of The New York Times.#2 But it holds also for the heterodox/pluralistic folks who present themselves all over the social media as anti-oligarchic fighters for WeThePeople.

In order to verify this for MMT, in particular, it is sufficient to look at the recent speaking tours of Bill Mitchell and Stephanie Kelton.#3 MMTers do NOT what scientists are supposed to do but what propaganda agents are supposed to do.

MMTers push the Oligarchy’s agenda but can, of course, not say so openly. They present themselves as the good guys, as Progressives who hate and fight the evil of neoliberalism wherever it raises its head and they are among the front-runners of every social movement for the betterment and salvation of humanity.#4

It is pretty obvious that among MMT’s political duties is to try to capture and derail genuine grassroots movements.#5

Where MMT’s true colors become clearly visible is the question of taxation. All MMT’s policy guidance boils ultimately down to deficit-spending/money-creation. Proper economic analysis shows that deficit-spending/money-creation is ultimately to the advantage of the Oligarchy and to the disadvantage of WeThePeople.

The public deficit is in the elementary case defined as D≡G−T and it is equal to macroeconomic profit Q. Because of this, MMTers fight fiercely against budget balancers like Corbyn’s British Labour or the Swabian Housewife. A balanced budget, i.e. G=T, means zero macroeconomic profit.

MMTers argue that taxes are not a necessary prerequisite for spending because the government is the currency issuer. That is technically correct but does NOT economically justify deficit-spending/money-creation.#6 However small, there must be taxation because this is what gives the currency value in the MMT world. So T is always greater than zero.

Now, one would expect that, if taxation is necessary, a progressive MMTer would argue to tax the rich. This is NOT the case. MMTers argue consistently AGAINST taxing the rich’s income.#7 You cannot be more explicit than the MMT loudspeaker Bill Mitchell.

• “Tax the rich! That has become a misguided progressive Left mantra.”
• “That is one of many reasons [to tax the rich]. But you should never include among those reasons a need by government for their cash in order to facilitate spending. Any progressive who articulates that argument is just reiterating neoliberal frames.”
• “The answer is that we need to tax the rich more not because we want the government to get their money in order to spend more, but, rather, to stop the rich using it.”
• “To illustrate the confusion these groups elicit, this same group has signed up to another so-called progressive group and they advocate increasing taxes on higher-income groups to pay for the services we deserve. Meanwhile, in another guise, they hold themselves out as promoting MMT.”

Taxing the rich has always been the instinctive central political plank of genuine anti-Oligarchic movements. Needless to emphasize that fake Progressives are against it: “Any progressive who articulates that argument is just reiterating neoliberal frames.” This is the actual Orwellian newspeak of stupid/corrupt academic economists.#8

Egmont Kakarot-Handtke


#1 Billy Blog
#2 Links on Paul Krugman, proto-scientific impresario
#3 European and UK Teaching and Speaking Tour, February 2020 in #1. For more details enter Bill Mitchell/Stephanie Kelton in the search field of the AXEC Blogspot
#4 MMT: If you’ve got a problem, I don’t care what it is, let me help
#5 MMT: Corbynism is dead, British Labour is next
#6 Criminals and the monetary order
#7 MMT: Distribution is the drawback NOT Inflation
#8 Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks

Related 'MMT and grassroots movements' and 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'Bill Mitchell cracks the spending whip over the Swabian Housewife' and 'Is MMT good for WeThePeople or for the Oligarchy?' and 'How Bill Mitchell stalks Jeremy Corbyn' and 'Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy' and 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'Mainstream vs MMT ― another clown show' and 'The problem with economics as a discipline'. For the full-spectrum refutation of MMT see cross-references MMT.

For more on tax the rich see AXECquery.

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Source: Billy Blog

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Bill Mitchell's blog Jan 28

Twitter Sep 11 2020

Twitter Sep 29, 2020

Twitter Nov 21, 2020

Twitter Jan 22, 2021

Twitter Feb 24, 2021

Twitter Apr 1, 2021

MMTers do NOT tax the rich, it is just the other way round: they run a deficit because Public Deficit = Private Profit according to the macroeconomic Profit Law.

Twitter Apr 2

Twitter Apr 8 MMTers don't want taxes from the wealthy but deficits for the wealthy

Twitter May 2

ONE-PAGER NO. 67 | June 2021

EDWARD LANE and L. RANDALL WRAY,  Should Corporate Tax Hikes Be Included in Biden’s “Build Back Better” Plans?

"As Modern Money Theory claims, corporate taxes are not really used to finance federal government spending, and if their impact on reducing wealth inequality or inflation pressures is marginal, at best, why have them? We follow Hyman Minsky’s recommendation that taxes on corporations ought to be eliminated entirely."

Twitter Jul 12

Twitter Jul 13

Twitter Jul 21

 

Bill Mitchell's blog Jul 30, 2021

"But MMT is not a ‘movement’, nor, is it a progressive agenda.

I keep reading things like “MMT advocates taxing the rich”.

It doesn’t.

What an understanding of MMT will allow one to conclude is that there is no contingency between the provision of public services or infrastructure by government and tax revenue it might receive from high income or wealth individuals."

"When I talk about the need to ‘tax the rich’, I am expressing a value system, which is quite separate from when I am teaching the principles of MMT."

Twitter Sep 6, 2021

Twitter Sep 11, 2021

Twitter Oct 22, 2021

Twitter/X Jun 9, 2024

MMT: Academic snake oil for the people

Comment on Bill Mitchell on ‘The ‘tax the rich’ call bestows unwarranted importance on them’

Blog-Reference and Blog-Reference

MMT is a selection of trite slogans that have NO scientific support of any sort.

MMT’s key message for the people is: “A consequence of the fiat system is that governments that issue their own currencies no longer have to ‘fund’ their spending.” (Mitchell)

True, the government can replace taxation and in addition increase spending at any time for any purpose by deficit-spending/money-creation. This has two effects:

• The household sector = ninety-nine-percenters is taxed in real terms by an almost imperceptible price hike (NOT inflation). Open taxation turns into stealth taxation, and in real terms, NOTHING changes.
• Because Public Deficit = Private Profit, the one-percenters enjoy an immediate profit boost. In addition, part or all of the increased public debt can become a long-term source of interest income depending on whether and how the public debt is consolidated.

The replacement of taxation by deficit spending clearly benefits the one-percenters. The benefit is proportionally greater if the income tax is progressive. To replace progressive taxation with deficit spending is the non-plus-ultra of inverse redistribution.

So, from the standpoint of simple self-interest, the one-percenters and their useful academic/journalistic spokespersons should consistently argue FOR deficit spending, and the ninety-nine-percenters and their academic/journalistic spokespersons should consistently argue AGAINST it. This, of course, does not happen in the political realm.

MMTers as champions of deficit spending for the people are in effect agenda pushers for the one-percenters, no matter what they are saying or what they are thinking of themselves.

Bill Mitchell, for example, argues elsewhere: “A rising fiscal deficit is neither good nor bad. It all depends on the saving and spending desires of the non-government sector and the state of capacity utilisation. A rising deficit associated with a growing economy and full employment with stable prices is to be desired.”#1

Bill Mitchell’s mistake/error/fraud lies in the word “non-government sector”. There is NO such thing as the “non-government sector”, there are TWO sectors, the business, and the household sector. And the business sector does NOT save. Saving/dissaving is the balance of the household sector, profit/loss is the balance of the business sector. The word profit, though, does not appear once in Bill Mitchell’s analysis. That is too bad because the macroeconomic Profit Law says Public Deficit = Private Profit which means that Bill Mitchell and his academic colleagues ― wittingly or unwittingly does not matter ― argue on behalf of the one-percenters.#2

Whether MMTers are in a state of self-delusion or know full well what they are doing is anybody’s guess. Objectively, all of MMT is provably false proto-scientific garbage.#3

Bill Mitchell is politically consistent. He not only promotes deficit spending but also downplays the idea of taxing the rich and closing their tax havens: “Do we need the rich’s money?” "No".

No, because “we”, the ninety-nine percenters, pay for the social goodies that MMTers promise “us” through stealth taxation and transfer the newly printed money, which we do not need, via deficit spending and increased profits directly into “their” tax havens.

No, “we” do not need the rich’s money. The rich need it and Bill Mitchell and the MMTers are pushing their agenda in academia, in the econblogosphere, and in social media.#4

Egmont Kakarot-Handtke


#1 billy blog “Oh poor Britain …”
#2 Down with idiocy!
#3 For the full-spectrum refutation of MMT see cross-references MMT
#4 Are MMTers stupid or corrupt or both?

Related 'Deficits matter for distribution' 'MMT, money creation, stealth taxation, and redistribution' and 'Full employment through the price mechanism' and 'MMT: miscommunication, mistakes, misdirection' and 'Forget Keynes' and 'MMTers are NOT Friends-of-the-People' and 'Cryptoeconomics ― the best of Bill Mitchell’s spam folder'.

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Twitter Feb 2 (Don't) Tax the rich

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 “The time for pussy-footing with new taxes to extract a little more from the rich is yesterday’s news. There is no time for that. This is the time to create money for change.” (Richard Murphy)

Meet the MMT smart-arses

Comment on Kaivey on ‘Richard Murphy ― Steve Keen on MMT’*

Blog-Reference

The applause troll Richard Murphy introduces Steve Keen: “I think it fair to say that at a technical level you are quite right that Steve Keen is a smart arse: he is an incredibly intelligent man. … I don’t know Steve well, but I know well enough to be aware that what happens to the people and planet the matter to him, a great deal.”

The applause troll Kaivey introduces MMT: “MMT is a fantastic system for producing a fairer and wealthier society. Social democracy and capitalism can work together, strengthening both. We end up with far less suffering, a safer society, a well educated workforce producing wealth, less crime ― so less money spent on crime prevention ― more people in work, so the tax burden is spread more widely, less ill health ― because people are happier and less stressed ― and excellent infrastructure, etc. The job guarantee can get help people back into work, which won’t be a grind but an enjoyable social, work experience, and a way of meeting new people instead of being stuck at home with nothing to do. And the old and people with disabilities can get the help they require, and need never be lonely either. The countryside can be managed better, with any litter being cleaned up. …”

These, of course, are merely talking points for the MMT sales team. MMT claims to be a superior economic theory and therefore has to be seen against the background of present-day economics. The four major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the pivotal concept of the subject matter ― profit ― wrong.#1 Economics is a failed science, and MMT, as a relatively young approach, fits in this pattern. MMT is NOT a scientifically valid theory, but a political agenda pushing for the Oligarchy in a scientific/social bluff package. #2, #3, #4

Accordingly, MMTers and their supporters cannot be taken seriously. These folks are not so much smart-arses but either stupid or corrupt or both. For details about this motley crew of proto-scientific con artists, see Stephanie Kelton, #5, #6 Richard Murphy, #7 Warren Mosler, #8 Ellis Winningham, #9 Bill Mitchell, #10 Lars Syll/Dirk Ehnts, #11 Clint Ballinger, #12 Brian Romanchuk, #13 Steve Keen, #14.

Needless to emphasize that scientific standards do not exist for economists in general and MMTers, in particular. #15, #16, #17

Egmont Kakarot-Handtke


* Tax Research UK
#1 To this day, economists have produced NOT ONE textbook that satisfies scientific standards
#2 MMT is better than mainstream economics but still not good enough
#3 Refuting MMT’s Macroeconomics Textbook
#4 For the full-spectrum refutation of MMT, see cross-references MMT
#5 The Kelton-Fraud
#6 Stephanie Kelton’s legendary Plain-Sight-Ink-Trick
#7 Richard Murphy: the MMT fraudster dressed up as realist
#8 MMT: The one deadly error/fraud of Warren Mosler
#9 A clueless MMTer explains macroeconomics to clueless beginners
#10 Bill Mitchell, MMT’s fake scientist
#11 The public-debt and private-profit pushers
#12 What and where is profit?
#13 Economics: How to stop mental pollution and global dumbing
#14 Where advanced Heterodoxy — represented by Steve Keen — took the wrong turn
#15 Economists/MMTers: agenda pushers, distractors, blockers, muters, censors
#16 Economics: The proto-scientific mob embroiled in just another gang war
#17 Economics: 200+ years of scientific incompetence and fraud

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REPLY to Kaivey on Mar 23

You say: “Let’s assume all Businesses make 5% profit.”

That is your problem: you have no macroeconomic theory, to begin with, and therefore you have no idea how a 5% profit comes about.

The first question of economics is this: “How can they [the capitalists] continually draw 600 p. st. out of circulation, when they continually throw only 500 p. st. into it? From nothing comes nothing. The capitalist class as a whole cannot draw out of circulation what was not previously in it.” (Marx)

Marx did not answer the question correctly, and neither did Walrasians, Keynesians, Austrians, and MMTers.#1 What all these fake scientists lack for a proper analysis are the correct macrofoundations.

The correct macrofoundations are given with this axiom set: (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.

So, if the total wage income of the household sector Yw is 100 in a given period and the household sector spends all on consumption C=Yw, then the macroeconomic profit of the business sector Q≡C−Yw is zero. It does not matter whether there is full employment or unemployment. Profit is zero at any employment level.#2

If the total wage income of the household sector is 100 and the household sector spends C=105 on consumption, then there is a one-off price hike and the profit of the business sector is 5. This is how the business sector makes a 5% profit. Profit comes from deficit-spending/dissaving of the household sector. The macroeconomic Profit Law says Q≡−S for the most elementary case.

This is, in essence, how the monetary economy works. And economists, including MMTers, don’t get it to this day. #3

If the total wage income of the household sector is 100, and the household sector spends all on consumption, and the government sector applies deficit-spending/money-creation of 5, then there is a one-off price hike, and the profit of the business sector is 5.

If the total wage income of the household sector is 100 and the household sector spends all on consumption and if the government sector puts hitherto unemployed to work for cleaning up the environment and pays them 5 and these additional workers fully spend their income on the unchanged output O of consumer goods, then there is a one-off price hike and the profit of the business sector is 5.

Note well that this deficit-spending/money-creation has to be repeated in subsequent periods; otherwise, employment and profit fall back to their initial levels. This has the effect that public debt grows continuously. The mirror image of growing public debt is the growing financial wealth of the Oligarchy. This is what the smart-arse MMT policy of deficit-spending/money-creation amounts to. #4, #5

There is a better way to achieve full employment. #6


#1 The Profit Theory is False Since Adam Smith
#2 Essentials of Constructive Heterodoxy: Employment
#3 Refuting MMT’s Macroeconomics Textbook
#4 Keynes, Lerner, MMT, Trump, Biden, and exploding profit
#5 MMTers make Capitalism work
#6 Full employment through the price mechanism

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REPLY to Kaivey on Mar 23

You say: “Richard Wolff says the capitalists have to mark up prices more than they cost to produce, and so the wages of the wages will never be enough to buy all the products they make, and this leads to unemployment and poverty.”

To recall, the elementary production-consumption economy is, for a star,t defined by three macro axioms (Yw=WL, O=RL, C=PX), two conditions (X=O, C=Yw), and two definitions (Q≡C−Yw, S≡Yw−C).

Given the two conditions, (i) the market-clearing price is P=W/R (= macroeconomic Law of Supply and Demand), and (ii) monetary profit Q is zero because of C=Yw (= macroeconomic Profit Law).

The Law of Supply and Demand says that the price P is the dependent variable. On the other hand: “Richard Wolff says the capitalists have to mark up prices …”

In this case, the price is NOT the dependent variable but the independent variable. As a consequence, the quantity variable has to adapt. So, the condition of market-clearing X=O has to be skipped. With a markup price P>W/R, the business sector obviously can no longer sell the whole output, i.e. X<O, and the stock of unsold output accumulates. Profit, though, is still zero because of C=Yw.

Markup pricing does NOT produce a higher profit, only a higher inventory. This, of course, is not a stable situation. If the business sector reduces employment, this only slows down the growth of inventory. The economy is in a death spiral.

The methodological point is that economists cannot make up their minds between two incompatible models: (i) market-clearing and price as dependent variable, (ii) markup price-setting and change of inventory as dependent variable. Supply-demand-equilibrium Walrasians and markup Keynesians simply blather past each other in all eternity.

The upshot, however, is that all this has no bearing on profit because profit Q depends alone on deficit spending, i.e., on C>Yw.

MMTers, though, have not realized anything. The proof is in the MMT sectoral balances equation, which reads (I−S)+(G−T)+(X−M)=0. In this equation, the balance of the business sector Q ― the key variable of Capitalism ― is missing. Not so smart, the MMT smart-arses.

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REPLY to Calgacus on Mar 24

You say: “As the Robinson-Kalecki saying goes, Workers spend what they get. Capitalists get what they spend. And the last includes capitalist, rentier spending on taxes. The tax take has to be put back into the economy or there will be unsustainable surpluses and depressions.”

The first point to notice is that the Kalecki profit equation is provably false.#1, #2

Secondly, you do not properly differentiate between wage income Yw, and distributed profit income Yd. Roughly speaking, wage income goes to the ninety-nine-percenters, and distributed profit income goes to the one-percenters.

It is generally agreed since Kalecki that the spending out of wage income is proportionally higher than spending out of distributed profit income. So, let us assume that the taxation of wage income is reduced and the taxation of distributed profit is increased by the same amount such that total taxes remain unchanged.

Because of the different spending propensities, the increase in spending of the ninety-nine-percenters is higher than the reduction of spending of the one-percenters, and the net effect is an increase of overall demand, which has a positive employment effect. So there will NOT be “unsustainable surpluses and depressions”.

The fact that tax-the-rich has, before AOC, not been a prominent element of MMT economic policy guidance #3 is another indicator that MMTers are, contrary to their social rhetoric, agenda pushers for the Oligarchy.

Your attempt to psychologically defuse the tax-the-rich issue is not very convincing: “Sure progressive taxation is good, but what is really important is the job guarantee, the spending on the non-rentiers. That is what the rentiers hate above all, above progressive taxation.”

You are in line with Bill Mitchell: “The ‘tax the rich’ call bestows unwarranted importance on them.” So MMTers, let’s forget taxation and return to our main job, i.e., to crank up deficit-spending/money-creation and thereby profit.

You say: “The rentiers and the MMTers are the only ones who understand what’s going on.” Yes, these smart-arses are well aware that Public Deficit = Private Profit.


#1 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
#2 The axiomatically correct macroeconomic Profit Law is given by Q≡Yd+(I−S)+(G−T)+(X−M) with Q as monetary profit and Yd as distributed profit income.
#3 MMT: Distribution is the drawback NOT Inflation

Occasional Tweets: How MMTers serve the Oligarchy (II)

 

#HowMMTersServeTheRich

The 3-sector #ProfitLaw Q≡(G−T)+(I−S)+Yd implies #PublicDeficitIsPrivateProfit. Thus, the #MMT policy of #DeficitSpendingMoneyCreation is a #FreeLunch for the #Oligarchy. Consequently, MMT scammers claim: “We need not a cent from the rich.” pic.twitter.com/CVYAjuZ5AC

— E.K-H (@AXECorg) July 12, 2021

 

Get it: MMT-Progressives don’t tax the rich.

For more about don't tax the rich see AXECquery.

For more about stealth taxation of WeThePeople see AXECquery.

For more about how economists/MMTers serve the rich/Oligarchy see AXECquery.

Another MMT shitshow

Comment on Mike Norman on ‘Mnuchin says US must cut spending and reduce the deficit: Recipe for guaranteed recession’

Blog-Reference

Tom Hickey posts: “Zero Hedge: Trump Says Middle-Class Tax Cut To Be Announced Within Three Months”

Mike Norman posts: “Mnuchin says the U.S. government must cut spending and reduce the deficit.”

The latter message triggers a mass Pavlovian reflex in the MMT troll yard (S400, Bob, Matt Franko, Ralph Musgrave, Andrew Anderson) and unanimous condemnation of Mnuchin.

Folks, calm yourself, Trump/Mnuchin are playing a little communicative joke with you. It is known as good cop/bad cop. Don’t be afraid, there will be MORE deficit spending. After all, Public Deficit = Private Profit, and Trump/Mnuchin are BOTH the tried and tested useful idiots of the Oligarchy.#1

Egmont Kakarot-Handtke


#1 Keynes, Lerner, MMT, Trump, Biden, and exploding profit

Related 'Get it: Progressives don’t tax the rich' and 'Links on MMTers push Wall Street’s agenda' and 'MMT: For the record'. For the full-spectrum refutation of MMT see cross-references MMT.

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REPLY to Andrew Anderson on Jan 24

You say: “If fiat is NOT to be created by deficit spending for the general welfare then HOW shall fiat be created FAIRLY in your scheme? If you say an equal Citizen’s Dividend distributed by the Central Bank then I’ll agree.”

First of all, we are NOT in the like/dislike or agree/disagree opinion poll business but in the true/false business which is defined by material/formal consistency.

To bring money into the economy at the demand side is false because it has humongous distributional consequences for the present and the future. The proof has been given elsewhere. For example
► The right and the wrong way to bring money into the economy
► Criminals and the monetary order
► Nick Rowe’s soapbubbling about money.

Alternatively one can search for transaction money here.

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REPLY to Andrew Anderson on Jan 24

You say: “And when un-ethically financed automation has eliminated the need for almost all human labor, then what?”

You bring up an entirely different question in order to avoid the crucial conclusion. The takeaway point is: the MMT policy of deficit-spending/money-creation is the wrong way to bring money into the economy because macroeconomics tells us that public deficit-spending is a free lunch for the Oligarchy.

MMT policy is unethical, to begin with.

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REPLY to S400 on Jan 25

You say: “So what does the ethical policy look like? Are going to answer that or do as you always do ― avoid the question?”

I answered the question long ago and have given the references above.

Obviously, you are unable to follow a link. Go back to troll school and take the advanced course.

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REPLY to Matt Franko on Jan 25

Above, you refer the audience to Wikipedia/Mathematical Maturity. This implies that you think of yourself to possess this qualification.

If so, it should not be a problem for you to tell the audience which of the two sectoral balances equations is true (i) (X−M)+(G−T)+(I−S)−(Q−Yd)=0 or (ii) (X−M)+(G−T)+(I−S)=0.

Of course, you are allowed to ask S400 for help or perhaps the brainies of the next kindergarten near you.

MMT, Warren Mosler, and the little helpers from Wall Street and Academia

Comment on Katia Dmitrieva/Bloomberg/Businessweek on ‘A Hedge Fund Guy Lefties Can Love’

Blog-Reference

There is the entertainment industry, and it is about personalities/emotions. There is science, and it is about knowledge/consistency. There are not many people who prefer science over entertainment. In order to appeal to the majority, one has no choice but to gossip about personality.

Accordingly, Warren Mosler is introduced: “He ran a hedge fund, lives in a Caribbean tax haven, and loves fast cars and yachts ― not obvious qualifications for a left-wing guru. But that’s what Warren Mosler is rapidly becoming.”

And this is his message: “Its [MMT’s] main argument is that governments with their own currencies can’t go broke. They have more room to spend than is usually supposed and don’t need to collect taxes (or even borrow) to pay for it. One thing they can, and should, spend money on is a jobs guarantee ― offering work to anyone who wants it.”

All this, of course, is way beside the point. Economics claims for 200+ years to be a science, and MMT claims to be a superior scientific theory, so the point at issue is NOT the personality of Warren Mosler but whether MMT is true/false according to well-defined scientific criteria.

The unambiguous answer is: MMT is materially/formally false, MMTers are fake scientists, MMT’s policy proposals boil down to deficit-spending/money-creation, and this translates to money-making for the Oligarchy because the macroeconomic Profit Law implicates Public Deficit = Private Profit, which follows straight from the axiomatically correct sectoral balances equation (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0. #1…#7

In sum, MMT is refuted as proto-scientific garbage, its social rhetoric is a plain political fraud, and its effect ― intended or unintended, does not matter ― it is to undermine genuine grassroots movements. MMT lacks valid scientific foundations and is no more than gossip/entertainment/fraud in the political Circus Maximus.

Deficit-spending/money-creation has always been a program for the self-alimentation of the Oligarchy #8 and quite naturally enjoys the support of Wall Street in general and Bloomberg in particular.

According to Stephanie Kelton, the MMT snake oil works just fine: “Democrats are beginning to see that all the stories they’ve been told, and that they in fact even repeated themselves, weren’t good stories.” #9

Indeed, but the MMT story isn’t one iota better. #10

Egmont Kakarot-Handtke


#1 MMT: agenda-pushing and money-making for the Oligarchy
#2 Rectification of MMT macro accounting
#3 MMT and the single most stupid physicist
#4 MMT and the promotion of Wall Street's idea of social policy
#5 MMT: The one deadly error/fraud of Warren Mosler
#6 MMTers are NOT Friends-of-the-People
#7 For the full-spectrum refutation, see cross-references MMT
#8 Keynes, Lerner, MMT, Trump, Biden and exploding profit
#9 The Kelton-Fraud
#10 MMT: How the Oligarchy communicates with WeThePeople

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AXEC142c

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REPLY to Kaivey on Oct 14

You say: “Egmont offers no answer, just more poverty for most people.”

The task of the economist as a scientist is to figure out how the economy works. Unfortunately, economists have done nothing of the sort over the last 200+ years because they were preoccupied with agenda-pushing.

As a result, the answers economists have offered from Adam Smith/Karl Marx onward have NO scientific content and have never been more than brain-dead political blather.

Needless to emphasize people with some scientific instinct have realized this long ago: “What is now taught as standard economic theory will eventually disappear … because it simply doesn’t work: were it engineering, the bridge would collapse.” (McCauley)

But economists have NO scientific instinct. They are clowns and useful idiots in the political Circus Maximus.

This is quite obvious in the case of Warren Mosler. Yes, he gives answers and offers solutions. The humanitarian mission of Warren Mosler, Stephanie Kelton, and the rest of the MMTers is to end the poverty of the one-percenters by deficit-spending/money-creation.

To be sure, I have no qualms with MMTers pulling off a political fraud. #1 Politics is NOT the issue! What has to be made clear is that Modern Monetary Theory is NOT a valid theory and that MMT has NOTHING to do with science.

MMT is failed science, MMTers are fake scientists, MMT academics are campaigners for Warren Mosler, and Warren Mosler, in turn, is a campaigner for Wall Street. #2

#1 MMT is ALWAYS a bad deal for the 99-percenters

#2 Lying for money: a generalization

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REPLY to Kaivey on Oct 14

You say: “Now, if the government taxes the people and spends it on public services, doesn/t that money also end up the pockets of the rich.”

I have presented the axiomatically correct Profit Law on more than one occasion. #1 It reads Qm≡Yd+(I−Sm)+(G−T)+(X−M) and answers ALL your questions. If the government taxes the household sector and thereby balances the budget, then G=T and the profit effect is ZERO. It is deficit-spending/money-creation that produces the macroeconomic profit of the business sector and benefits the Oligarchy immediately and exactly by the same amount. Get it: Public Deficit = Private Profit.

The Profit Law also tells one that it does not matter whether deficit-spending is private or public. The effect on profit is the same.

In the MMT balances equation (X−M)+(G−T)+(I−S)=0, profit does not appear. Isn’t that a bit curious? An economic theory that is completely silent about profit? #2

The MMT balances equation is mathematically false. And exactly at this point, MMT is outside of science. If profit theory is false, the whole analytical superstructure is false, including employment theory. #3 A policy that is based on a false theory is a fraud. This also holds for the MMT Job Guarantee. #4

So, the matter is settled. Warren Mosler is a political fraud, and MMT academics are his useful idiots.#5

#1 For the full-spectrum refutation of MMT, see cross-references MMT

#2 Why the MMT benefactors of humanity never talk about profit

#3 Employment theory as an example of proto-scientific soapbubbling

#4 Full employment through the price mechanism

#5 MMT: The one deadly error/fraud of Warren Mosler

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REPLY to Calgacus on Oct 15

Bloomberg presents Warren Mosler as the “guy Lefties can love”.

Calgacus presents himself as a class-fighter who can read the minds of the enemies: “But the purpose and action of such neoliberals and business leaders is NOT to enrich themselves in absolute terms, but rather in relative terms, to keep themselves in the saddle, to create and maintain rigid class divisions.” #1

Bill Mitchell presents himself as a Progressive, i.e. as a true Left who brings the somewhat naive and disoriented Socialist Parties back on the right path. #2

Tom Hickey uses every opportunity to make it clear that MMT is more than macroeconomic accounting and has deep philosophical roots in Hegel/Marx. #3

Stephanie Kelton presents herself as the Mother Teresa of economics who cares about everything between babies and global warming and promises a golden MMT future with “a pony for every American”. #4

All this is crappy personality marketing.

The fact is that MMTers are NOT in any sense Left or social or caring or fighting for WeThePeople. MMT is objective ― i.e., independent of what MMTers think or say of themselves ― agenda-pushing for the Oligarchy.#5 Calgacus is part of it.

#1 If we only had classes

#2 How Bill Mitchell stalks Jeremy Corbyn

#3 Note on Amy Willis ‘Can majoring in philosophy make you a better person?’

#4 The Kelton-Fraud

#5 Rethinking MMT

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REPLY to Kaivey on Oct 15

You say: “Did you watch the Spiders Web video I put out, which was about Britain’s second empire? These are the real issues if today.”

That Britain is NOT a sovereign nation but the annex to the money-making and money-laundering machine called the City of London is a well-known fact since the founding of the Bank of England.

The real issue of today is how economists helped to bring this state of affairs about. The curious fact of today is that Warren Mosler lives in a tax haven and promises full employment for WeThePeople by applying perpetual deficit-spending/money-creation. And he is supported by incompetent academics and brain-dead trolls like Kaivey.

The real issue of today is that the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” has been awarded. This has to be put in perspective.#1. Provably false:

• profit theory, for 200+ years,

• microfoundations, for 150+ years,

• macrofoundations, for 80+ years,

• the application of elementary logic and mathematics since the founding fathers.

For everyone with some scientific instinct, it is quite obvious:

• Economics is a cargo cult science,

• Both Nordhaus and Romer are fake scientists,

• The economics Nobel is a fraud.

MMT perfectly fits into the big picture. The political fraud of MMT, the corruption of the British banking system, and the agenda-pushing since Smith/Marx are bad, but the worst thing of all is the scientific corruption of economics in all its variants from Walrasianism, Keynesianism, Marxianism, Austrianism, Pluralism, to MMT.

This is the real issue of today

#1 Where economics went wrong

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REPLY to Calgacus on Oct 16

You say: “Attacks on deficit spending are almost always on ‘MMT welfare spending’ or ‘New Deal spending’ In that case that Egmont AND the oligarchs attack ― it is VERY clearly the opposite of the truth.”

The smart folks in the kindergarten already know that nobody can give a sh* about what politicians say about deficit spending or austerity.#1, #2 This has always been propaganda and NOT economics. My argument is NOT about deficit spending but about the profit effect of deficit spending.#3 It is exactly here, where the MMT fraud sneaks in.#4

You say “… if there is a Job Guarantee there is no unemployment. Period.” Agree, but that is not the point at issue. There can be a Job Guarantee with a balanced budget and then the profit effect is ZERO. Or, there can be a Job Guarantee with deficit spending. In this case, the Profit Law tells us that Public Deficit = Private Profit#5, and therefore the Oligarchy benefits biggly from the Job Guarantee. This is a bit ‘irrational’ for a social policy measure.

I have no qualms with the Job Guarantee. This is a political decision of the Legitimate Sovereign, which the economist as a scientist does NOT comment on but simply takes as a datum. My point is that the Job Guarantee is abused by MMTers to push the agenda of the Oligarchy. There are distributionally neutral ways to achieve full employment.#6

The fraud of MMTers consists of promising social benefits and hiding the fact that WeThePeople themselves pay in real terms for every single benefit, either through open or stealth taxation, and by hiding the fact that deficit-spending/money-creation feeds the Oligarchy.

The social policy of MMT is a fraud. I am NOT arguing against the goals of social policy but against the fraud.#7 Whoever claims that Warren Mosler is a guy WeThePeople can love or that MMT policy benefits WeThePeople is either stupid or corrupt, or both.

#1 Austerity and the idiocy of political economists

#2 MMT-Progressives: stupid or corrupt or both?

#3 Why the MMT benefactors of humanity never talk about profit

#4 Keynes, Lerner, MMT, Trump and exploding profit

#5 The profit effect of a Job Guarantee

#6 Full employment through the price mechanism

#7 For details of the big picture, see cross-references MMT