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Is the EconViz web site reliable?

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Cullen, the EconViz.org website looks like it has a well-done tutorial on how the economy works. At the same time, it says it is an “MMT-inspired guide”. I have read a lot of your critique of MMT on your website and wonder if this makes the EconViz website unreliable for a beginner trying to learn about how the economy really works. Thank you.

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Posted by Jay Hattler
Posted on 09/03/2017 2:43 PM
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I took a look at the sections entitled “how loans create money” and “why central banks don’t control money supply” and they seem ok. I wouldn’t say they have much to do with MMT, more monetary realism.

They seem to be a work in progress and could definitely be improved. For example, it might be useful to show the full circuit of money as Joe borrows to buy his car – the example doesn’t go any further than Joe receiving a new deposit in his account. It needs to show how deposits are transferred within the banking system (which is how deposits can be used as a means of exchange). It could show how Joe has to earn the money back to make interest payments and loan repayments (which destroys money), how the bank’s net worth is distributed as new deposits when dividends are paid by the bank (creating money again) and how money is finally destroyed when Joe eventually repays his loan.

As I said, it looks to be a work in progress and I might provide some feedback with some suggestions. It’s certainly helpful explaining the money creation process with animated balance sheets, but currently, I find the best resource in this area is still the BofE paper, “Money creation in the modern economy”
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

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Posted by Robert Pearson
Answered on 09/03/2017 5:02 PM
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    Thank you, Robert. I’ve been looking at it some more. When you get to the “Balance Sheet Visualizer,” they say:

    “For more on the economics theory, please visit the blogs of MMT authors such as economist Bill Mitchell or Warren Mosler. Mosler’s book, Seven Deadly Innocent Frauds of Economic Policy, is a longer introduction geared toward a broad audience. A multi-part Modern Money Primer is available at New Economic Perspectives. There are also papers from the US Federal Reserve and other “authoritative” sources (such as this BIS paper) that support this modern understanding of bank loans, reserves, and related concepts.”

    I think Mitchell is one of the big MMT gurus.

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    Posted by Jay Hattler
    Answered on 09/03/2017 5:39 PM
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      I’ve now watched the “how the economy works” sections and section 2 starts to go full MMT. It does the whole “government spending has to precede government borrowing” thing, implying that govt spending creates the money that is then borrowed by the government – whereas the section on “how loans create money” makes no mention of the government at all.

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      Posted by Robert Pearson
      Answered on 09/03/2017 6:01 PM
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        Jay, just absorb this section: https://orcamgroup.com/understanding-money/
        Of years of Prag Cap refined comprehensive, reasoned understanding of how the modern system actually functions and you will be light years ahead of the laymen.
        With that being said, you will still be miles behind the MOB in a MOB Rules Enviroment…..LOL

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        Posted by Cowpoke
        Answered on 09/04/2017 3:13 AM
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          Hi Jay,

          It’s generally good. You have to be careful with it in some sections as they do promote a MMT world view. They’ll say things like “taxes don’t fund govt spending”, but once you understand my MMT critique you can use that site reliably. It’s very good on banking and the stuff I totally agree with MMT about so it’s fine.

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          Cullen Roche Posted by Cullen Roche
          Answered on 09/06/2017 11:59 AM
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