So France bounces Sarkozy and Greece bounces them all. A morality play for US austerity proponents.

[jeff47]

21. No, you only like to think it is

Fact is you're spouting the same wrong stuff as the Paulites. Doesn't really matter what you label yourself when you're saying the same things.

Have you really never heard of Minsky? Galbraith? Chartalism? Post-Keynesianism? Lerner? Modern Monetary Theory? L. Randall Wray? Bill Mitchell? This is not right-wing fantasy land. This is real word, 21st century economics.

So you are going to claim that people who have been proven utterly wrong by this current crisis should be listened to? The current crisis proves that MMT is wrong. Clinging to it demonstrates you aren't actually paying attention to economics.

If you want to talk economics with me, you need to get beyond this level of absolute ignorance. Take some time to try and actually comprehend the things that I've told you

Like the part where the IRS violates federal law by shredding currency? Why, exactly, should anyone listen to you when you can't even get that right?

Title 18 United States Code, Section 333:

Mutilation of national bank obligations

Whoever mutilates, cuts, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, or Federal Reserve bank, or the Federal Reserve System, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.

So, you put yourself up as an expert in economics and so well read, yet you can't get this very basic fact correct?

No wonder the economy is doing so terrible. People like you are claiming to be experts in how it works.

You're still missing quite a bit. Just stop and think about it for a minute. If the only way to get dollars into the economy was through banks borrowing from the Fed ("using one of the various ways the Fed loans money to banks&quot , what would our money supply look like? Explain how this would work, operationally.

You quoted how it works.

What do you think would happen if bank lending declined, the way it has since 2008?

Oh for fuck sake, you don't even understand the difference between loans from the Fed and private loans?

Private lending has declined. Lending by the Fed has MASSIVELY increased.

Reality. You, and everyone else espousing MMT, might wanna consider a visit.

In reality our sovereign government is the sole issuer of our currency, which it creates by spending

No, it creates money via a printing press. Remember, you were the one just a bit ago who was railing against electronic representations of money.

Or did you change your mind when that became inconvenient?

The debt crisis was a political crisis, not a fiscal crisis. There is no actual risk of our nation defaulting on its debts, except by choice.

Way to completely miss the point.

You: The government doesn't have any bank accounts. It shreds and prints money as needed.
Me: Then what was the debt ceiling crisis about? If you were correct, they'd just keep shredding and printing money. Instead, the "bank account" would be empty due to the political crisis, and the government would not be able to spend. The fact that there was a political crisis at all demonstrates you are wrong.

I'll let Edward Harrison explain to to you since he is more erudite than I am in this subject:

Well lookie here, you aren't reading this properly.

And the Fed wants to target rates i.e. price. It can’t do that unless it supplies banks with the reserves they desire to make loans at that rate.

This is private lending, not public debt. Public debt doesn't involve loans from banks.

Therefore, future overnight rates reflect

Lending from the Fed to banks. Not public debt. In fact, the exact opposite with private entities borrowing from the government.

Long-term interest rates are a series of future short-term rates

Correct, but not relevant to your argument.

I think I've explained this to you a few times now. Ireland, Spain and Greece are Euro member nations. They are not sovereign in their debts, which are denominated in Euro. Their sovereign currencies are tied to the Euro at a fixed exchange rate. What's more, the ECB has never functioned as a true central bank the way our Federal Reserve does. We are not Greece. We are not Spain. We have a sovereign flexible rate currency and a strong central bank.

You've completely avoided the question.

Your claim: Central banks can set the interest rate at which they sell public debt.
My question: Ireland, Spain and Greece have central banks selling their debt at massively high interest rates. If central banks can set whatever interest rate they want for public debt, how come they can't? I pointed out they don't have their own currency, but you never claimed those banks needed their own currency to set the interest rate.

If you'd prefer something without the currency problem, how come the Fed isn't selling our debt at 1% or less? Would save us a fortune in interest, and you do claim they have complete control over the interest rate for our debt.

Or maybe it doesn't work like you think it does.

Increasing the money supply is always inflationary. It may or may not change headline inflation based on other pressures.

Right, it's always inflationary. Except when it isn't.

You couldn't read the 2nd sentence? Or are you agreeing with me?

Tax hikes may or may not be popular, but it would be economically risky

The risk is demonstrably false. Because the economy has done much better when the top marginal tax rate was much higher. If a small tax increase on a small number of people has the destructive power you fear, you have to explain how the economy boomed with a 90% top marginal rate in the 1950s. If you'd prefer something more modern, Clinton passed a tax increase in his first year, and then the economy boomed.

If top marginal tax increases have the destructive power you claim, both of those examples are not possible - the tax increase would have crippled the economy. But that didn't happen.

History didn't start yesterday. This is something "Freshwater" economists forgot, and have so far failed to re-learn.

It took me many years of reading every economics book, article, blog and lecture I could get my hands on to get to the point where I am extremely comfortable with this subject

Given that most of what you've said so far is wrong, or you have dodged my questions, I really don't believe you are comfortable with this subject. The fact that you spent several posts shouting "fiat" and have since abandoned that distinction backs that up.

I find people who go to such lengths to describe their comfort with a subject tend to be the most wrong. They use their pontificating in an attempt to cover over their errors.