The
Foolishness of the Solitary Runner
Here is
Kohler playing the cowardly “two-bob each way” bet, now that he has been made
aware of how his foolish escapade on Modern Monetary Theory is making him a
target for lampoonery”. This is Kohler:
“The good news
about MMT is that it’s neither bollocks nor the answer to all our problems —
it’s simply an interesting, if challenging, way to look at how government
finances work. Not how they could work, but how they do work.”
So now Kohler
is hedging his bets: not bollocks, but not a complete answer. Good try, Alan!
Then he proceeds:
“In a country with a fiat currency, the amount of money in the
system is not fixed — it can be expanded, and usually is, constantly.”
This is complete
buffoonery! MMT does not merely say that governments expand monetary
mass. Of course they do! What MMT argues wrongly is that the expansion of this
mass - makes no difference to the profitability and efficiency of a country’s
economy! THAT is “bollocks”!
Now, here is
the coup de grace:
“This year,
during the pandemic, their assets have expanded by $US8 trillion, which is 80
per cent the new fiscal spending of their combined governments. In other words,
central banks have funded most of their government’s coronavirus fiscal support
with new money.
What they have not done, apart from a little bit of it by the
Bank of England, is to directly pay for fiscal spending by allowing the
government to run an ever-increasing overdraft, so the central bank overdraft
becomes the government debt instead of publicly issued bonds.
And central banks have bought the bonds on the secondary market,
so the new money has had to make a round trip to the same place.
Why not simply
fund the spending directly? Because the fiction that all government spending
must be financed by taxes or debt is a convenient way of controlling
politicians. If the buggers thought there was a money tree they’d be out
there all day long with basket and secateurs.”
Now, tell us
Alan, please: Why on this sacred earth would there be a need – any need
whatsoever – for central banks….”to control politicians” from printing money?
Game, set and
match Mr. Belbruno. Thank God Kohler doesn’t teach economics! Or LOGIC!
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