[Discussion] Modern Monetary Theory

Disclaimer: I am not an economist, but I took some classes in college. I have been reading and learning about MMT for several months.

What is Modern Monetary Theory?

MMT is a framework, or lens, on how to view the monetary operations of a government that controls its own fiat currency, like the US, or UK, or Japan, etc. It is a description of how things work in practice and a predictor of outcomes for certain behaviors. It is NOT a policy prescription, or a magic solution. It doesn't say what we should do, but it makes clear what the lies are, and makes some suggestions as to what's possible.

The basics:

  • A fiat currency itself is a simple public monopoly.  
  • The US government levies taxes payable in US dollars.
  • The US dollars to pay those taxes or purchase US Treasury securities can only originate from the US government and its agents. 
  • The economy has to sell goods, services or assets to the US government (or borrow from the US government, which is functionally a financial asset sale) or it will not be able to pay its taxes or purchase US Treasury securities. 
  • Governments that control their own fiat currency can never become insolvent, because they can always print more of that currency.
  • Government monetary operations are nothing like a household budget, and shouldn't be talked about like one.
  • Currency enters the economy when it is spent or loaned by the government, and taxed out later.
  • That currency is created by plussing up a number in a spreadsheet, it doesn't come from anywhere.
  • Deficit spending increases the balance of savings accounts in the private sector and public agency funds.
  • Governments set the value of their currency by the prices they are willing to pay to procure their resources, and the tax burdens they levy to create demand for that currency.
  • Deficits are not "leaving a burden on our children" because they don't have to actually be paid off, and we could pay it off at any time by printing the money and editing the spreadsheet.

Getting Started:
Papers
White Paper
Soft Currency Economics by Warren Mosler
Seven Deadly Innocent Frauds by Warren Mosler
http://moslereconomics.com/

Books
The Deficit Myth by Stephanie Kelton
Modern Monetary Theory and its Critics

Podcasts
The MMT Podcast

Critiques

Discuss!

I’m happy to throw a first set of questions in here, because I really don’t understand it.

The idea that spending and intake don’t need to be related seems bonkers to me. I know that a government can just ‘make more money’, but that’s problematic if continued ad infinitum. If the cost of government-provided services is $10b, and taxes bring in $5b, how is that sustainable in any practical way? The extra $5b has to come from somewhere, correct? And of the government piggy bank doesn’t have it, either $5b is printed (which has its own ramifications) or there is a permanent -$5b on the books, which seems like it should come due at some point.

What don’t I know?

What are the ramifications of poofing the extra 5 billion into existence? For a currency backed by physical goods that’s relatively easy to answer. Each dollar now represent a smaller chunk of those goods so is inherently worth less. Maybe the answer is the same for a fiat currency, but if so I don’t understand why.

Removed. Gonna keep my hot takes out of the more scholarly thread. As you were.

Think of a fiat currency more like points in a foot ball game. They are an abstract concept that represent something (a government-issued tax burden), not a physical object. When the score goes up in a game, no one asks, "but where did those points come from?" because they are just a token that represents a point and not backed by anything. It's not that spending and and revenue aren't related, they definitely affect each other. If you tried to take more money out of the system than you put in, people would get screwed and go to jail because there wasn't enough supply to go around. It's just that you don't HAVE to collect it before you spend it, they are separate actions in the system. There's no physical reason for it, or a constitutional one in our case.

In fact, if paid your taxes to the IRS in physical bills, they count it, they record it in a computer, and then they shred the cash. It doesn't go anywhere. The Fed and the IRS barely talk to each except to lie about running out of money because of the stupid debt celing.

Another thing is that the debt doesn't actually have to come due. We have been going like this for decades with no ill effects due strictly to the deficit, and in fact, you can see personal savings go up over that time to exactly match the deficit, and most would argue that's a good thing as long as it is distributed well.

Entities pay us for securities in the same currency, so when someone buys a bond, all the central bank does is lower the number in their cash account and increase the number in their saving account. They just move numbers around. There's no mechanism for it all come due, and even if it did, the fed just updates the spreadsheets to lower numbers in the savings account and increases their cash account. The mint could make a 100 trillion dollar coin, drop it off at the fed to move the debt back above zero, and nothing would change about the actual economy because it doesn't effect the actual flows of money in and around the system.

There ARE ramifications for printing too much money too quickly, and MMT is very clear about that. But we have a variety of tools for dealing with that, mostly taxes and interest rates on loans. If you pumped 5 billion in by, say, paying unemployed people to do useful work, and then increased the overall tax burden by a similar amount, you actually have gained something. Putting people to work lowers crime and Healthcare bills, stimulates the economy, and, depending on what you paid those people to do, can be a net gain on GDP if they are improving infrastructure or educational resources or providing day care or installing high speed broadband or whatever.

The point of MMT is to recognize that a fiat currency fundamentally works differently than a hard currency, and we should understand and use those differences to our advantage.

My biggest fear is how open are we to foreign governments using debt as a strategic weapon against us. For example, China bullying the US into not getting involved with Taiwan.

That's only if we act like our money is a limited hard currency. The reality is that if China tries to claim all their bonds at once, we can just update some bank accounts and move on.

The other metaphor that is commonly used by MMT scholars to describe a fiat currency is that of a parent giving out tokens for doing chores. Let's say you have a box of extra business cards and you tell your kids you'll give them X numbers of cards for doing Y chores. At first the kids will just ignore you, because the cards have no value. But if you tell them that they have to give you 10 cards back at the end of every week or they will be punished, then the cards have some value and they will do some work. The British Empire did exactly this same thing in some of their colonies to force people to farm coffee, or else their houses got burned down (essentially a real estate tax).

The parents control the amount of cards going in and out of the system, and can just print more cards if they need them. They don't collect the cards from the kids first before spending them to pay for labor. If the parents "spend too much" then the kids have savings and can use them later, or trade them between themselves.

In the beginning of this talk, Mosler walks through the British colony case study and answers questions about MMT.

I love the chore token analogy. What’s the analogy for adding multiple households (countries), if there is one?

Short answer is I don't know. I have heard a lot of talk about foreign currencies and imports/exports, but in connection to that analogy.

Mixolyde wrote:

In fact, if paid your taxes to the IRS in physical bills, they count it, they record it in a computer, and then they shred the cash. It doesn't go anywhere. The Fed and the IRS barely talk to each except to lie about running out of money because of the stupid debt celing.

My understanding is that the only organizations that are allowed to destroy money are the Fed, the Bureau of Engraving and Printing, and the US Mint. Where in the world does this information come from?

Robear wrote:
Mixolyde wrote:

In fact, if paid your taxes to the IRS in physical bills, they count it, they record it in a computer, and then they shred the cash. It doesn't go anywhere. The Fed and the IRS barely talk to each except to lie about running out of money because of the stupid debt celing.

My understanding is that the only organizations that are allowed to destroy money are the Fed, the Bureau of Engraving and Printing, and the US Mint. Where in the world does this information come from?

Then the IRS presumably gives it to the BEP for processing. They don't have giant vaults to hold the cash, and they don't give it to the Fed to pay bills. It just goes into a spreadsheet. It comes from Warren Mosler who worked for a bunch of banks and hedge funds before moving into academia to study and describe real monetary operations.

MMT is essentially a political opposite of austerity theory and is just as poorly configured, but in the opposite direction. This paper summarizes the usual critiques of MMT in a useful way. The big ones are that MMT assumes that policy changes are instant; that the economy is static rather than dynamic in various ways; that taxes do not actually fund government operations (they do - if you don't actually collect taxes but just print money, inflation issues arise); that it does not take into account behavioral factors that exist in consumers, markets and trade; that it does not admit that governments are fiscally and financially constrained by market and international trade factors; that it assumes situations that violate the Phillips Curve (which describes the relationship between employment and inflation, and notes that as an economy moves towards full employment inflation rises as supply becomes more scarce - an outside constraint on government policy if there ever was one); and a bunch more issues with it. Palley cites Mosler numerous times.

Basically, Palley believes that MMT is a *political* theory which has been simplified and exaggerated as a Progressive fringe response to austerity. He argues that it simply goes too far to one side, where austerity goes too far on the other, and we need to be somewhere in between.

I will dig into the paper when I have some time, but several of those points sound like mischarachterizations of MMT and critiquing something that the framework doesn't actually say, like not having to collect taxes, or that the policy suggestions are built into the theory somehow. I'll write more when I can dig into it.

I’m curious about what worries you about MMT in the critique I posted.

Well if several of the critiques are strawmen, that doesn't bode well for how serious to take the rest of it. Calling the whole thing a political theory because of some policy implications or because it points out the lies that both major parties use to scare up donations is pretty ridiculous. The theory describes how monetary operations actually work and make predictions about changes to that system, not what to do about it.

Does the counter to the theory *depend* on it being a political theory? I believe the criticisms are more substantial than that. They *conclude* that the theory is in part politically motivated, but that's because of its characteristics.

The criticisms of the mechanisms of the theory are independent of it's political appeal. Any thoughts on those?

I am still reading through the original papers to get a better idea of what MMT actually does and does not say about monetary operations and their implications, before I dive too deep into that critique paper. But my initial reaction is that it's mostly strawman arguments with a few good points about the difficulties of implementing some of the policy ideas that many proponents of MMT would like to see. Some of the people pushing policy based in part on MMT are definitely latching onto for political reasons. But the original MMT economists are usually quick to point out that there are lots of policy options that you have when you realize that a balanced budget isn't necessary, or even ideal, in a growing economy and MMT doesn'tsay which you should do. MMT is a lens to make predictions, not a prescription.

Wow, if there ever was a discussion to get me back into D&D, this would be it.

Aetius wrote:

Wow, if there ever was a discussion to get me back into D&D, this would be it. :)

My goal all along!

I'll start by responding to points in the thread.

absurddoctor wrote:

What are the ramifications of poofing the extra 5 billion into existence? For a currency backed by physical goods that’s relatively easy to answer. Each dollar now represent a smaller chunk of those goods so is inherently worth less. Maybe the answer is the same for a fiat currency, but if so I don’t understand why.

All currency is backed by physical goods and services. That's the reason it exists, as a medium of exchange so that people can trade goods and services more easily and thus increase the mutual benefits they receive from trade. In fact, all money is simply goods that are particularly useful as a medium of exchange.

To understand the ramifications of "poofing" money into existence, a short thought experiment is enough to show the problem. Assume that you have 1,000 people in the country. It has a typical economy - people buy and consume and invest at a steady rate, and have 1,000 dollars to use as currency to make that easier.

Now the government prints another 1,000 dollars. They give 1 person the 1,000 dollars in exchange for some widgets they want. Now that person can buy whatever they want, right? The problem is that the extra money doesn't create any new goods or services, so now there are 2,000 dollars chasing 1,000 dollars worth of goods and services, which eventually will cause the price of everything to double. For the people who didn't get the 1,000 dollars initially, they are facing prices that are twice as high, and any savings they had were reduced in value by 50%. This is inflation.

There are many, many problems that spring from inflation. People with hard assets (land, capital, stocks, etc) are essentially immune to inflation - their assets simply rise in price. This results in a subtle transfer of actual wealth from those who hold money to those who own assets. Next, prices are really important in the economy, because they are the basis of the calculations that people do every day to keep their businesses functioning. When you screw with prices, you cause all kinds of problems for economic calculation which causes uncertainty, confusion, and sometimes outright panic. Finally, inflation benefits those who borrowed money by making it easier to repay with the now more prevalent money, and conversely hurts those who lend by reducing the value of their loans.

That's why this:

Mixolyde wrote:

We have been going like this for decades with no ill effects due strictly to the deficit, and in fact, you can see personal savings go up over that time to exactly match the deficit, and most would argue that's a good thing as long as it is distributed well.

is not true. The effects of deficit spending and the inflation it causes have been many and far-reaching, including numerous recessions, heavily distorted markets, real wage stagnation, and wealth transfers from poor to rich. Just because our economy can tolerate interference like this because of its size and power doesn't indicate that more interference is a good idea.

You can go here and plot personal savings versus the federal debt - it's not even close even using the government's numbers.

This:

Mixolyde wrote:

The reality is that if China tries to claim all their bonds at once, we can just update some bank accounts and move on.

is also not true. If they claimed all their bonds at once, they would have a trillion dollars that they'd probably be wanting to spend or invest. In the grand scheme of things that's not a huge number (really), but it would definitely be a shock if China decided to buy all the real estate in Southern California, for example.

I'll also point out that this:

Mixolyde wrote:

But if you tell them that they have to give you 10 cards back at the end of every week or they will be punished, then the cards have some value and they will do some work.

is a pretty horrifying way of establishing your currency.

Second post:

Let's talk a bit about Mosler's book.

Mosler wrote:

Deadly Innocent Fraud #1: The federal government must raise funds through taxation or borrowing in order to spend. In other words, government spending is limited by its ability to tax or borrow.

The way he describes this "fraud" is key to understanding one of the fundamental problems with MMT. The federal government operates inside the economy, not the other way around. The government doesn't "raise funds" in order to spend - it raises funds in order to acquire goods and services. Spending is not the goal, spending is the tool. Taxes are the direct confiscation of goods and services from the private economy in order to redirect them to the government's whims. Money is simply convenient for this for the same reasons it's convenient as a medium of exchange - they don't have to go out and physically collect pigs and chickens like governments did a long time ago.

MMT posits that the government can spend as much as it wants. However, the amount of goods and services the government can confiscate is limited - the private economy will only tolerate so much even under threat of punishment. So what happens when the government tries to take (spend) more than the private economy can be coerced into surrendering?

People stop accepting your currency, in the worst case. And the consequences of that are economically pretty catastrophic, especially for the government in question. See Mexico in 1982, Russia in 1998, Argentina in 2001, and Zimbabwe in 2008 (and the present, for that matter).

Mosler wrote:

Where else do we see this happen? Your team kicks a field goal and on the scoreboard, the score changes from, say, 7 points to 10 points. Does anyone wonder where the stadium got those three points? Of course not! Or you knock down 5 pins at the bowling alley and your score goes from 10 to 15. Do you worry about where the bowling alley got those points?

This analogy, referenced above, is HUGELY flawed. The obvious problem is that points in sports games are not a medium of exchange. They are not used to facilitate trade, and people don't hold them and trade them. Other people are not holding points that you are devaluing by adding more points to a closed system. EDIT: Also, one of the major flaws of using such a system as a medium of exchange is the very ease with which new points can be created.

Mosler wrote:

Now let’s build a national currency from scratch. Imagine a new country with a newly announced currency. No one has any. Then the government proclaims, for example, that there will be a property tax. Well, how can it be paid? It can’t, until after the government starts spending. Only after the government spends its new currency does the population have the funds to pay the tax.

As I noted above, this again exposes one of the core flaws in MMT. This statement is quite clearly nonsense. If a government didn't have a currency, they would simply collect other things of economic value as taxes. This is, in fact, what was done for thousands of years. And after that, as various forms of money came into being, governments took that instead.

In fact, the history of fiat currency is largely one of forcing these currencies on people when "paying" for goods and services, long before they are usable as payment for taxes. And many fiat currencies never actually made it to that point - Continental dollars, for example.

Further, it should be obvious that taxes are not the only way a fiat currency can be reduced. A government could, for example, sell land priced in the currency in order to recover the currency and dispose of it, or exchange it for another currency. (Though it should also be obvious why this doesn't actually happen.) It could also simply confiscate or demonetize the currency, which has happened numerous times in history ... and almost without exception has caused great economic damage.

Mosler wrote:

In fact, a budget deficit of perhaps 5% of our gross domestic product might turn out to be the norm, which in today’s economy is about $750 billion annually. However, that number by itself is of no particular economic consequence, and could be a lot higher or a lot lower, depending on the circumstances. What matters is that the purpose of taxes is to balance the economy and make sure it’s not too hot nor too cold. And federal government spending is set at this right amount, given the size and scope of government we want.

What he's saying here is actually pretty simple: we should inflate the currency forever at a very high rate. He casually mentions 5% of GDP as a possibility. This is essentially a guarantee of economic and governmental instability, with prices going up and up while wages lag behind. And he straight up admits that taxes will never be high enough to keep inflation from happening.

I'm not well versed in MMT but I am okay in Keynesian economics.

The problem with believing that money is backed by goods and services is that you see situations of complex financial derivatives like what occurred during the sub-prime mortgage reinsurance problems that triggered the GFC; that happened then and I have no doubt a large part of the financial sector rests upon the shoulders of other exotic instruments. It also doesn't quite explain, in my limited understanding, the rise of blockchain currencies.

I do think government's role is to intervene in reallocating assets and to smooth out the booms and busts. But that is not to say it's the most efficient tool - it falls apart whenever there is corruption and I don't think anyone here is naive enough to think developed economies are not rife with corruption and grift. It's also prone to pork barrelling electoral objectives and downright votebuying.

Bfgp wrote:

The problem with believing that money is backed by goods and services is that you see situations of complex financial derivatives like what occurred during the sub-prime mortgage reinsurance problems that triggered the GFC; that happened then and I have no doubt a large part of the financial sector rests upon the shoulders of other exotic instruments.

What good is money without something to buy? And what good would all those complex tools do if the dollar was no longer accepted as a currency?

Bfgp wrote:

It also doesn't quite explain, in my limited understanding, the rise of blockchain currencies.

Blockchain currencies are goods that offers various benefits specifically as a medium of exchange - primarily cryptographic security that validates ownership and transactions. This is a HUGE step up from current monetary systems, which to use Mosler's analogy are basically spreadsheets with little protection as to who edits what, specifically designed to allow the kind of shenanigans he is promoting.

Continuing with Mosler's book:

Mosler wrote:

OK, so the risk of running a deficit that is too large is not insolvency - the government can’t go broke - but excess aggregate demand (spending power) that can be inflationary. While this is something I’ve never seen in the U.S. in my 60-year lifetime, it is theoretically possible. But then again, this can only happen if the government doesn’t limit its spending by the prices it is willing to pay, and, instead, is willing to pay ever higher prices even as it’s spending drives up those prices, as would probably the case.

This is a HUGE red flag, especially coming from someone who lived through the 1970s. Deficit spending is, by definition, inflationary - no excess aggregate demand is required. Further, the government cannot limit its spending by the prices it is willing to pay, because it is both locked into existing spending (often by law), and is competing with the private economy for goods and services. If the government is legally committed to buy widgets and widgets are in short supply, government must pay the higher prices - it cannot simply say "no, we're only paying this price". To do so would mean the private sector would buy all the widgets at higher prices and the government would be left with none. (This is assuming, of course, that the government doesn't force the pricing into place, which would be worse.)

Mosler wrote:

But let’s return to the first part of the statement - “the price level is a function of prices paid by govt. when it spends.” What does this mean? It means that since the economy needs the government spending to get the dollars it needs to pay taxes, the government can, as a point of logic decide what it wants to pay for things, and the economy has no choice but to sell to the government at the prices set by government in order to get the dollars it needs to pay taxes, and save however many dollar financial assets it wants to.

There's a logical problem with this that he doesn't address. Under his system the government is always printing more money than it is taking back in taxes. That means that the "economy" does have a choice about the price it sets for the government - there are always dollars that can be used to pay taxes without selling the government anything. The government will always eventually be subject to its own inflation.

To summarize:

MMT's basic premise is that we can print our way to prosperity. This is a common problem with people in the financial sector because they often believe that money is the same as wealth, and thus adding more money adds more wealth. Simple, right? Unfortunately, this is not true, and pursuing this kind of policy has been historically disastrous.

Here's an example of the problem, again from his book:

Mosler wrote:

When it comes time to make Social Security payments, all the government has to do is change numbers up in the beneficiary’s accounts, and then change numbers down in the trust fund accounts to keep track of what it did. If the trust fund number goes negative, so be it. That just reflects the numbers that are changed up as payments to beneficiaries are made.

He's right, but completely ignores the consequences of such an action. While the government can simply print more money to fund Social Security, the effect of that will make current Social Security payments worth less. And that is, in fact, what is happening.

the article in 2016 wrote:

According to a study by the Senior Citizens League, since 2000, seniors have lost a good 31% of their buying power, largely because their Social Security benefit increases have failed to keep pace with the nagging beast that is inflation. Furthermore, since 2000, COLAs have increased Social Security benefits by only 41% while senior living expenses have climbed 84%, leaving many beneficiaries to somehow pick up the slack.

His solution would be ... print more money and accelerate the process of decline.

Thank you, Aetius.

Aetius wrote:

If the government is legally committed to buy widgets and widgets are in short supply, government must pay the higher prices - it cannot simply say "no, we're only paying this price". To do so would mean the private sector would buy all the widgets at higher prices and the government would be left with none. (This is assuming, of course, that the government doesn't force the pricing into place, which would be worse.)

Pricing for products for sale to the government in general cannot exceed the actual commercial price or previous prices paid without special circumstances applying specifically to the provision of the product to the government. So unless the government requirements actually add costs to the production of the goods or services, they can't be priced at more than is usual in the commercial world or than the government paid in the past. This of course is also modified by scarcity, supply chain issues, etc. but a general rule of thumb is that costs to the government are usually equal to or less than commercial prices, all other things being equal.

So if a company sets up a discounted price to provide a zillion widgets to Walmart, it then must offer the same discount to the government, is the upshot. Unless there's a lower price out there, in which case the government can request that be used. However, the government cannot accept free services or products except when those are also offered to commercial customers.

Need to dig into the initial resources more before I weigh in too heavily but many of Aetius points resonate with me but I'm fairly certain we don't see exact eye to eye on overall economic policy.

Big sticking point for me is extra money in the system does have large rippling effects. One of the first things we learned in an Economic Development class I took was the knock ons of extra cash in a system.

Model was pretty straight forward. If a country accepts foreign aid directly that their government can spend or its coming in via a charity that spends within their market there's increased prices because of crowding out.

Simple 1 good example was concrete. You give an African country money specifically to build a hospital what could be wrong about that? That spending soaks up a certain amount of the supply of concrete and now all related investments requiring concrete are more expensive. Obvious variables would be how much extra demand is this injection creating and the elasticity of the supply.

I feel like MMT light is plausible in principle but one of the tricks might be you actually don't admit and label that is your strategy so you don't erode your own market confidence. Growing/inflating your way out of debt is possible so why not spend more for people now (lots to unpack there on potential side effects)? Also the time horizon of debts countries carry are not normal. Too often people get stuck on its size and it's relative share per population. Change your time horizon to something beyond your own life expectancy.

Robear wrote:

Thank you, Aetius.

Aetius wrote:

If the government is legally committed to buy widgets and widgets are in short supply, government must pay the higher prices - it cannot simply say "no, we're only paying this price". To do so would mean the private sector would buy all the widgets at higher prices and the government would be left with none. (This is assuming, of course, that the government doesn't force the pricing into place, which would be worse.)

Pricing for products for sale to the government in general cannot exceed the actual commercial price or previous prices paid without special circumstances applying specifically to the provision of the product to the government. So unless the government requirements actually add costs to the production of the goods or services, they can't be priced at more than is usual in the commercial world or than the government paid in the past. This of course is also modified by scarcity, supply chain issues, etc. but a general rule of thumb is that costs to the government are usually equal to or less than commercial prices, all other things being equal.

So if a company sets up a discounted price to provide a zillion widgets to Walmart, it then must offer the same discount to the government, is the upshot. Unless there's a lower price out there, in which case the government can request that be used. However, the government cannot accept free services or products except when those are also offered to commercial customers.

Leaving aside the problems associated with that policy, I don't see where we disagree. In 2021, the government buys 1,000 widgets at $50 each - the prevailing market price. In 2022, the government is also committed to buying 1,000 widgets; however, in the meantime the price has gone up to $100 due to ... whatever. Mosler's argument is that the government can say "we're only buying widgets for $50 because that's our desired price" and that eventually widget prices will come down to that level. That's nonsense: no one will sell to the government at a loss (again, unless forced), and thus the government will get no widgets - they will all be sold for higher prices elsewhere.

jowner wrote:

Growing/inflating your way out of debt is possible so why not spend more for people now (lots to unpack there on potential side effects)?

This actually illustrates another of the key problems with MMT (and several other economic theories). I'll link one of Mosler's policy recommendations:

Mosler wrote:

The next recommendation of mine is to fund an $8/hour national service job for anyone willing and able to work; this will include child care, the current federal medical coverage and all of the other standard benefits of federal employees.
...
This would eliminate the dangerous forms of unemployment and allow us to put our young people, especially, to useful work.

There is an implicit assumption here: that government spending is always economically beneficial. However, that is emphatically not the case. Government spending can range from merely inefficient ("we have to spend all of this year's budget to avoid a reduced budget next year!") to apocalyptic (Holodomor, Killing Fields, etc). Governments are practically blind when it comes to economic calculation for themselves - they are not subject to profit/loss risks because their income stream is coercive and their spending is often coercive as well. Then, as jowner noted, the direction of that spending is further warped by political agendas, corruption, and graft.

And this is, in fact, the system that Mosler trusts to handle setting the "right" amount of spending:

Mosler wrote:

The reason I look at it this way is because the “right amount of government spending” is an economic and political decision that, properly understood, has nothing to do with government finances.

Ah, I see, Aetius. Yeah, the government is not in the business of cutting it's own nose off to spite it's face lol. If they need the widgets, they will get them, even if they have to redirect from commercial customers (or right off the factory floor) in an emergency. I've seen all that happen.

Just never, ever, try to transport a big, heavy computer server in a large military transport plane. One air pocket and you'll land with a crate of expensive garbage that can't be returned.