Sunday, October 17, 2010

Loose Ends (from my recent notes on MMT)


The problem is imbalance between money and credit. This problem cannot be solved simply by printing more money, because in a growing economy our financial system takes every new dollar and uses it to create $30 of new debt. The imbalance cannot be corrected unless a policy of "printing money" is accompanied by a policy for reducing the reliance on credit, and by a policy for accelerating the repayment of debt.

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For some time I've been wanting to write a book called The Management of Fiat Money but I don't yet know near enough about it. Mosler might; but he has yet to work out the theory behind it, or adopt the one I've worked out here.

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I loaned a friend $50 once, some 40 years ago. He never paid me back. Obviously I still remember it. And I do not hold that friend in high regard. So much the worse, if it was not my friend but my government that stiffed me.

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