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If you thought you were having a bad day ?

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It’s nowhere near as bad as the the Committee for a Responsible Federal Budget which a bipartisan group of budget experts concerned about this nation’s fiscal future.

They’ve gone into meltdown mode 🙂

What can we all do to stop this nonsense in it’s tracks? How can we all get the message across that puts this group out of business all together ? That just holds everybody back.

We’ve all made some progress but ultimately we have failed. How do we communicate our views better ?

Do we have to start at the grass roots level and start from the ground up ? Talking from the top down doesn’t seem to be working.

We’ve all been at this for a long time guys. MMT, Positive Money and yourselves. What are we doing wrong ? Whatever it is we are all making the same mistakes.

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Posted by (Questions: 5, Responses: 83)
Posted on 10/22/2017 10:06 AM
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The problem is that none of our arguments are really that convincing. What we’re basically all saying is that inflation is the real budget constraint. But what have Conservatives been screaming about for decades? The risk of inflation. So they don’t really care whether the budget constraint is inflation or solvency. It’s the same thing to them.

We’ve obviously been right so far. But they think they’ll be right eventually. That’s why the budget debate doesn’t move at all. And I don’t know how to fix that other than to make sound arguments that inflation isn’t a big risk these days. But people aren’t very convinced by that….

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Cullen Roche Posted by (Questions: 10, Responses: 1771)
Answered on 10/22/2017 2:45 PM
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It’s very difficult but we have to regroup and try our hardest to come up with something.

I think if voters actually knew the deficit and national debt was actually the countries net wealth and their savings. The language would have to change because nobody is going to vote to reduce their own savings.

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Posted by (Questions: 5, Responses: 83)
Answered on 10/22/2017 3:15 PM
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I don’t think that really helps people understand things. In fact, it sounds like you misunderstand this point as well. Saying that govt spending is non-govt “net wealth” is misleading if it’s not explained in a broader context. The govt is ultimately made up of all of us. So, within the USA for instance, it is kind of misleading to say that the government’s liabilities are our net worth because WE ARE the govt. It would be like saying that corporate bonds are not really bonds because they’re a net financial asset for the non-corporate sector. That’s not really accurate.

The way we create net worth is by creating real output and by revaluing our assets in a manner that reflects this increased output. You don’t just print net worth in the form of government spending.

Of course, govt spending can increase private sector net worth when it contributes to real output, but it is not helping our cause to have MMT people running around telling everyone that we can just print net worth. And this is why some of us are so critical of MMT. They create this fictional world that doesn't actually help the message. To anyone with any understanding of this stuff it actually hurts the message because it's so obviously wrong....

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Cullen Roche Posted by (Questions: 10, Responses: 1771)
Answered on 10/22/2017 3:23 PM
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I was talking about the debt and your debt to GDP analysis.

It was you yourself who said the other side of the debt to GDP is private sector net wealth.

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Posted by (Questions: 5, Responses: 83)
Answered on 10/22/2017 9:11 PM
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In a certain context it is. Corporate bonds add to the non-corporate sector’s financial assets. So does a govt’s debt issuance. But we collectively own the corporate sector and we are collectively the govt.

Now, the important aspect of private sector net worth, as I have emphasized in my many disagreements and debates with MMT people, is that it is investment and market revaluation that contributes mainly to private sector net worth. Govt deficits can help contribute to these factors in indirect ways, but it is not appropriate to depict this the way MMT does. MMT says deficits are necessary because they are the cornerstone of all private sector financial assets. They claim that all private financial assets are “leveraged” from the govt’s assets. This is incorrect.

In another thread you cited a Bill Mitchell piece that said the private sector cannot sustain permanent deficits against itself. This is absolutely 100% wrong. But these are the kinds of views one concludes when you depict the economy the way MMT does.

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Cullen Roche Posted by (Questions: 10, Responses: 1771)
Answered on 10/22/2017 9:39 PM
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In that piece I cited a quiz question that I didn’t agree with because of the interest income channels.

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Posted by (Questions: 5, Responses: 83)
Answered on 10/22/2017 10:31 PM
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Have you ever done a comprehensive study that breaks it all down to the bear bones ?

What makes up investment and market revaluation. As in where does the money come from that allows people to invest in the first place. From deficit spending, bank lending, etc, etc. Paying back loans and the likes.

Now that would be really interesting to see.

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Posted by (Questions: 5, Responses: 83)
Answered on 10/22/2017 10:40 PM