The Road to Serfdom by [email protected] (With apologies to Friedrich Hayek) By Marshall Auerback The markets are again in free-fall and, once again, a lazy Mediterranean profligate is to blame. This time, it’s an Italian, rather than a Greek. No, not Silvio Berlusconi, bu this fellow countryman, Mario Draghi, the new head of the increasingly [...]
The biggest fear and objection to MMT ideas of non debt based government spending is - inflation. Even progressive cite inflation as the reason why a ECB distribution of debt free money on a per capital basis should not be attempted no matter how attractive it appeared. When one asks why these words are intoned in a very serious voice " the quantity theory of money'. To non economists the words sound impressive but harmless. But belief in the power of this mantra is pervasive in the political classes and because it is believed it has power much like the witch doctors magic. This article by Maddog in Money and Public Purpose on the Daily Kos blog goes to the trouble to give us an antidote to the power of these words by explaining the even bigger juju formula it relies upon. He then explains the circular logic used by the witchdoctors, oops, I mean neoliberal economist to make the formula deliver the outcome he wants. Maddog concludes thus..
Martin Wolf says : The eurozone confronts a choice between two intolerable options: either default and partial dissolution or open-ended official support. The existence of this choice proves that an enduring union will at the very least need deeper financial integration and greater fiscal support than was originally envisaged.
MMT does not consider it feasible to run a national economy in a way that advances public purpose at all times if the national government has surrendered currency sovereignty in any way.
One of the great paradoxes is that the periphery’s generally left-wing governments adopted so enthusiastically the ECB’s ultra-right wing economic nostrums – austerity is an appropriate response to a great recession.
David McWilliams latest article Memo to ECB: print money is right if a little simplistic. The ECB has been crediting banks in exchange for rubbish assets- their version of Quantative Easing - which is almost like printing money but that is not what we need. [...]