so uncle joe wins in arizona and illinois, kicks ass in florida

looks like el tío bernie is toast

Christ, I hope he don’t “Bern” it down on his way out.

news: bernie “to assess campaign”

warren said the same the day before she dropped

I'm calling it now:

Biden-Warren.

Damn, I was reallllllly hoping for one of the Castro brothers. Would have mobilized a lot of Latinx voters, who are not, as yet, crowding into the Joe column

Just sharing again in case anyone is wondering where all the stimulus money being spent around the world due to Coronavirus comes from, if the government didn't call for more taxes or issue bonds.

oh hell yeah i noticed right away. i had been wondering if the age of mmt has officially arrived.

Unfortunately for the Bernie camp, he was having to pair M4A with 'tax the rich' in order to alleviate the concerns of those who wonder how it would be funded. (By all means tax the rich to remove their power and influence!)

After this crisis nobody is going to wonder where the money comes from. The next politician to propose ambitious universal programs won't have such a problem. Could have had one now but... you know what I think about that haha.

The major issue now is inflation due to a supply AND demand shock. There will be less resources to go around if people are isolating and not producing. This presents a real risk of runaway inflation, so governments will need to keep a very close eye on it during this period of huge government spending. But under normal circumstances with normal production, the government could deficit spend consistently with little concern

i promised to take a mental health day so i dont wanna go into details but im building in self-sufficiency right now to hedge that inflation

what’s not being produced are non-essentials like restaurants and other live entertainment

OTOH, walmart is hiring like crazy right now

and yeah to ambitious plans being possible now. we a need massive infrastructure overhaul.

Good luck mate. In Australia we are just about to get hit. I'm actually expected to show up to teach my class of 100+ Monday morning at this stage. TBD.

The takeaway message is: our governments have the capacity to get through this, and ease the burden on everyone. But will the conservative governments in our countries have the courage, since it forsakes 40+ years of their own ideology? Again, tbd

here all teaching is going remote and so will you inevitably, so set up your home office before there’s a run on desks :D

In Australia's most conservative newspaper

https://www.theaustralian.com.au/bus...1fb4319ae1947a

i try to open it and it asks me to subscribe...

please copypasta?

The Australian. blerrrrrgh

i haven’t read it but from our conversation seems like EVEN THEY are embracing mmt now. does it make sense?

In pure Gen Z style, I'm totally ignoring the economic issues and choosing to dismiss them for having a page dedicated to "gender issues" - no prizes for guessing what their main talking point is.

if what you mean is “whooosh,” then yeah... :D

All I'm saying is that if even The Australian is embracing MMT then we are certainly in the midst of a paradigm shift

It’s Modern Monetary Theory time as the state steps inALAN KOHLER

It hardly seems sensible to be putting numbers on how much the Morrison government will spend to support the economy, whether it’s the first effort of $17.6bn, the RBA’s $90bn last Thursday, or Sunday’s latest number of $66.1bn.

Moreover the precision of $66.1bn is meaningless, beyond being a number big enough that everybody might feel better for five minutes and the Prime Minister can have another one of those grave pep-talky press conferences.

And adding them all up to $189bn (rounded up from $188.7bn) is even more meaningless, since RBA quantitative easing, cash off the budget to pensioners and businesses, permission to withdraw from superannuation and the various other parts of the packages are not just apples and oranges, but a whole basket of fruit.

The economy is likely to be entirely shut down within a few days apart from essential services, in which case government support for businesses and jobs will have to be unlimited, as it is in other *countries. It’s likely that most, if not all, developed economies will soon be shut down, apart from essential businesses.


An economic depression seems guaranteed no matter what monetary or fiscal stimulus is applied, and governments everywhere will be forced to supply unlimited cash to stop people from dying of starvation or a lack of their usual medicines and therapies.

Capitalist, small-government economies like Australia’s will be replaced for a while by a socialist one, in which the state owns the means of production … of money, that is.

The question is going to quickly become: who is going to buy all the debt? Apart from anything else, with yields so low, the price of these bonds is high and the likely return from them very low indeed.

But in any case, the pile of sovereign debt that will be issued in 2020 and possibly 2021 to keep citizens alive will have to be colossal — Napoleonic in scope.

There will also be huge amounts of debt taken on by businesses and households, availing themselves of the various cheap loan schemes being promoted by governments.

So unless there is a wave of debt defaults — sovereign, corporate and personal — either during or after the crisis, to wipe the slate clean again, the lasting legacy of the coronavirus is likely to be much more global debt than we’ve already got, which is saying something (it’s currently more than $US250 trillion, or 320 per cent of world GDP).

Now think about the elements of the Australian rescue packages announced over the past week.

• The government is going to let individuals withdraw up to $20,000 from super, which is a form of borrowing from the future;

• There’ll be three new sets of government spending — cash to pensioners, income support for workers and cash flow support for employers, totalling $50bn;

• An SME loan guarantee (but only 50 per cent of the loans);

• RBA’s three-year facility of at least $90bn for banks to lend to SMEs;

• Quantitative easing by the RBA to target a three-year bond yield of 0.25 per cent.

All of it will be new debt … except for the source of the RBA’s QE, and presumably the $90bn facility. That money will be newly manufactured on the RBA’s computers before being dispatched to banks at the click of a mouse, to be dispatched by the bank at the click of another mouse — for a small margin of course.

It seems inevitable to this armchair epidemiologist that the RBA will have to end up buying the government’s debt as well: no one else will buy it at a yield of 1.1 per cent yield, unless it is stuffed down super funds’ throats — and that would be a form of borrowing as well, since the lower investment returns will mean smaller retirement outcomes.

In fact, I’d say all global central banks will have to buy bonds directly from their governments, instead of from banks as they do now, as part of quantitative easing.

This has a name: Modern Monetary Theory, in which deficits don’t matter because they can be funded with money manufactured out of thin air by central banks.

So far that magic has been confined to supporting share prices through central banks buying bonds from banks to “provide liquidity to the financial system”. More than $US20 trillion has been thus created and now sits as (mostly) government bonds on the balance sheets of four central banks — the US, China, Japan and *Europe. This has led to a historic boom in the US sharemarket, since money tends to flow to the asset with the greatest return, and in the past decade that has been American technology firms, thanks, ironically, to globalisation.

Up to now MMT has been mainly pushed by the lefties in US congress, led by Alexandria Ocasio-Cortez (Democrat, New York), and opposed by the Right, and all right-thinking economists, as the thin end of the socialist wedge.

But all bets are off now — something new has come along. Capitalism has to close for a while and the state has to step up.

Do governments just keep doing what they’ve always done, which is to scrimp and borrow, or do they try something new?

Alan Kohler is editor in chief of eurekareport.com.au

ALAN KOHLEREDITOR-AT-LARGE, THE AUSTRALIAN BUSINESS REVIEW
Alan Kohler is one of Australia’s most experienced commentators and journalists.

right, i got that unfortunately i could not read the article

but check this anyway

https://www.businessinsider.com/coro...-theory-2020-3s

—

o there it is! thanks!

Huge.

Paradigm shift well under way.

If we get through this chaos the world we build on the other side of it COULD be incredible. Full employment. Medicare for All. The government will never be able to use 'we don't have the money' to justify austerity ever again.

the question of having trust in the value of the currency still remains though

i mean, that’s all the is, isn’t it? trust. credit.

The legitimacy of currency comes, brutally, from the fact that you owe taxes in the currency of your country or you go to jail. You need to earn that currency in order to be a free subject of the state. This doesn't play well with the libertine instincts of the US people but it's nonetheless true.

so, full employment through compulsory work?

now you’re scaring me...

Or welfare payment. But either way the currency is legitimated via needing it. It's not nice and a libertarian would want to destroy this situation via returning to a gold standard or creating cryptocurrency etc. But that's how fiat currencies work and they have their advantages: the government is the monopoly issuer of them and thus has effectively an unlimited supply, as we've just seen

so you’re stuck in a labor camp living at welfare level?

please help me out here

i’m not a libertarian but i don’t want to be dictated to either

eta: originally i was referring to trust in the value of the currency to prevent hyperinflation but things suddenly took a dark turn with the threats of incarceration

You're misunderstanding me. This is how currency is legitimated right now, as we speak. MMT is only describing how currency comes to exist and is legitimated, not making any kind of normative judgements about it.

As long as the government is the monopoly issuer of the currency this is just the nature of floating fiat currencies

Hyperinflation doesn't come via our faith or non-faith in the value of the currency. We don't, on the whole, barter with it and make individual economic judgements at the micro level like that. It comes from resources becoming scarce, leading to a bidding war to secure those resources (or price gouging by opportunistic capitalists). Toilet paper prices are inflated right now due to resource scarcity, not people having too much money.

We may experience inflation or hyperinflation due to an external shock to the economy, such as a supplier of raw materials used in production collapsing due to the virus. However that won't be because too much money was printed, it will be because of the external shock. MMT advocates keeping a tight control of the money supply relative to the amount of resources available.... Just that under normal circumstances, under conditions of labour unemployment, there is a lot more 'fiscal space' for increased money supply and government involvement in the economy.

You can use MMT in our situation to do things like:

- Keeping businesses solvent via government grants, to keep people on the payroll.
- Giving people money to make essential purchases during great depression-levels of unemployment.
- Ensuring the producers of essential resources (food/medicine) are fully operational at this time, either via state ownership or covering loss in profits
- Freezing or paying off debts, rents, loans etc at a time of unemployment. This can ensure private banks don't collapse due to all their clients becoming insolvent (or maybe you want them to collapse since they are often predatory and engage in financial speculation)

But careful attention must be paid to the balance of money supply and real resources. This is the key to avoiding inflation at this time. This is why I'm weary of words like 'stimulus'. Stimulus without resources will lead directly to inflation

On the 'go to jail' question: capitalism makes it so that you die if you don't earn money. And it has been the aim of capitalists for 50 years to erode every social program which might keep people alive without needing to work 9-5. Housing, health, education and more are under constant attack, leaving us with the 'freedom' to find the job of our 'choice' to earn money.

The state is, by its nature, an incursion on absolute liberty. But at least it is or can be beholden to democracy. Free market capitalism leaves us at the mercy of a select few, who often achieved their power via inheritance. I personally opt for more state involvement in the economy, always working to make it as democratic as possible.

yeah i did, i was asking about something else. the jail/taxes is not a requirement for that though, all that is required is the monopoly on the currency. i guess, ok, yes, taxes, since you must pay them in the monopoly’s denomination (but only when you have to).

im not talking about toilet paper but devaluated currencies. latin american countries in the 20th century went through devaluation, inflation, and the population eschewing the local currency for the american dollar. argentina actually has continued the same patterns into this century, the poor fuckers.

so what i mean is that the american dollar could lose reserve currency status if the public did not believe its value is backed by a solid national economy vs other currencies. import prices would skyrocket bringing up domestic inflation. no?

bernie is quittin'

Well here's to four mo' years of Trump then

huh? bernie was never gonna defeat trumpet, we know that now.

i would have voted for him, but i’m in the minority here.

his youth mobilization failed spectacularly, which is why he had to bow out. they would have put pictures of him next to fidel castro, showed such montages to the boomers, and he would have ended up worse than corbyn.

unfortunately, you can’t rely on kids in america: fact. or on anyone else for that matter lololol.

remember occupy wall street?

He'd have more of a chance that Biden. He'd certainly have been able to convince a few people in the debates between the two anyroad. Even trump admitted last time round the last person he wanted to get the nom was Sanders.

i really don't think so.

trumpkins will be trumpkins no matter what at this point. they've been branded.

you keep thinking like a young person, but the election still belongs to the boomers.

what agent orange said doesn't matter. all sorts of bullshit spew out of his mouth at all times, and to use him as reference to any sort of reality would be misguided.