.In a non-convertible floating rate monetary system, the currency issuer is not constrained operationally. The only constraint is real resources. If effective demand outruns the capacity of the economy to expand to meet it, then inflation will result. If effective demand falls short of the capacity of the economy to produce at full employment, then the economy will contract, an output gap open, and unemployment will rise. It is important to note that MMT economists are NOT recommending the adoption of a Treasury-based monetary system. Rather, they are asserting that the present monetary system is already Treasury-based operationally, even when governments choose to impose political restraints that mimic obsolete practices and create the impression that these are operationally necessary.
First, the euro funding issue/crisis could vanish with a simple announcement, like: The ECB hereby guarantees all the debt of the national governments. But they won’t do that.
by Emer O'Siochru, from the Smart Taxes Network. The Irish have a lot of learning to do about property taxes. Following the 1903 Land Acts, the new largely Catholic landowners who displaced the largely Protestant absentee landlords, immediately sought to deny their obligation to the people of the nation that had helped them win their fine farms. [...]
In this week's Fleeing Vesuvius article, Nate Hagens and Kenneth Mulder explain why today’s prices and costs provide a very bad basis for making investment decisions. They reflect temporary relative market scarcities rather than long-run underlying physical ones. The world needs to abandon money as its measure when determining energy and economic policy if it is to invest its scarcest, most limiting resources in the best possible way.
By invitation of Smart taxes Marshall Auerback is coming to Dublin to speak at a public event on Friday the 23rd of September in Buswells Hotel. Be sure to put the date in your diary and watch this site for more info. He says " Rather than attempting to stave off a double-dip recession by easing fiscal and monetary policy, the European Central Bank (ECB) has gone careening off in the opposite direction." [...]
Michael Hudson is always worth the time to read. In this piece in New Economic Perspectives he eviscerates the rating agencies. Here are his concluding remarks.. …No less a financial publication than the Wall Street Journal has come to the conclusion that “in a perfect world, S&P wouldn’t exist. And neither would its rivals Moody’s [...]