Gerald Epstein outlines his criticisms of Modern Monetary Theory (MMT). Paul Jay hosts
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Over full employment ? We have Medicare for all, etc. We will have to tax ? Lets take it a step at a time Epstein. Adds nothing of value to the conversation.
So what would this gentleman do if he was the grand wizard in charge? Print nothing? Have no purpose for the federal government? I'm honestly curious.
So trillions a year for a worldwide military machine of death and destruction and constant Wall Street bailouts and corporate welfare aren't free lunches to this gentleman? That's interesting.
So trillions a year for a worldwide military machine of death and destruction and constant Wall Street bailouts and corporate welfare are at free lunches to this gentleman? That's interesting.
Nobody asks how we're going to pay for it when discussing the last 200 years of the US Congress's federal annual budget. So what does that tell you?
Epstein is really biased and that's obvious. What else is a government for but to create money and fund ventures? These ventures can be positive or negative. Everything the federal government has been doing in my lifetime has been wholeheartedly negative and amoral as far as I'm concerned. The only thing it does that's positive is provide social security benefits and the VA. And food stamps. That's it. And none of those programs were created in my lifetime.
Is not a sovereign currency-issuing government's purpose to fund whatever proposals it deems necessary? Of course if DC wanted you could fund a GND and provide UBS, universal basic services to every man, woman, or child who needed them. Doesn't matter what the price tag of this would be. Whatever it is it's going to be manageable and it's probably going to be less than the current yearly budget which goes to nothing but Wall Street bailouts and the military machine.
I guess Epstein just doesn't want to see the American people thrive.
With hard price controls and rent controls by law opportunistic price-raising by companies and corporations would be prevented. Price-raising IS inflation that's all it is. Prices go up because companies and corporations who provide goods choose to raise them. That's all it is and it's nothing more mysterious than that. Regardless of what comes out of Congress these should just be standard policies to have in place to protect the consumer. As far as rent controls that would go about 90% of the way to ending homelessness. It's disgusting that rent is so out of control. I'm sorry I don't care if you are a landlord you DON'T deserve to charge an arm and a leg for occupancy of your unit!!!! You deserve to make a modest income and a small profit and that is it! 95% of the homeless problem is because people are being literally priced out of being able to afford anywhere to rent. It's disgusting and it DOESN'T have to be this way.
Watching Epstein is excruciating. That he's even employed as an economics professor is not surprising, but a travesty.
He simply has no clue about some simple and basic concepts; stuff I even learned as only a PPE undergraduate! He literally aimed to 'critique' the idea of spending on something like GND on the assumed basis that MMT apparently says you should just 'print money' even at the point of full resource capacity. A complete lie. Even the monetarists know that you can't purchase what doesn't exist to be purchased! To make the critique he's making you would have to assume there is already full resource implementation or close to it. And then he wheels 'they'll have to tax more to reduce demand'…And? That's the normal mechanism. If people aren't pinched taxation isn't a felt burden. MMT theorists (certainly Randy Wray) have also not ignored military budgets or the spending capacity of the very wealthy. It is fact a key part. This guy has a lot to say on the back of either no actual reading or reading through his stubborn filter. Clueless.
Not all spending is inflationary. If you have a shortage of widgets & you fund a widget factory, that would be deflationary. If you fund to increase production capacity, you create more real goods, that is also deflationary.
What a complete misrepresentation of reality
2008 crash was because the regulator was bough by those with cash in the financial sector, not because fed printed money
Jerry has engaged in simple deception. Who cares if the parasitic move away. They are not the ones who work. They are not the ones who innovate. People innovate when they are not artificially constrained by restrictions economic/military
No real arguments here.
I don't think Mr. Epstein is correct that the creation of USD for domestic spending is spilling out in to the global economy. US Dollars never leave the US, any trade deficits/surpluses will just be reflected on the Fed's balance sheet, outside of aggregate demand.
Would be nice if people in academia who are supposed to be trustworthy would actually read the damn authors of the theories they're bashing, because as some of the comments say most of the criticisms have been addressed by Kelton. Isn't that what we trust you for when you're in academia? To read and defend your positions reliably?
why were parts 3 and 4 suppressed?
The MMT point is not that there is a 'free lunch.' It's that there are still unutilized resources preventing growth in the economy.
I welcome robust debate about MMT, and don't axiomatically assume it is beyond criticism. However, the criticism from Gerald Epstein is poor. I was disappointed that he demonstrated a weak understanding of MMT. For instance, he effectively equates quantitative easing with federal deficit spending in general, and makes statements like '[they don't consider] the effect on financial stability' (not true at all, Hyman Minsky was a forerunner of MMT for goodness sake). He also makes the classic error of treating MMT purely as a set of policy proposals – MMT is fundamentally a description of fiat monetary systems. That description has implications for what policies are possible / what the consequences will be. I didn't learn anything by listening to Epstein and his, frankly, tired criticisms have been rebutted ad nauseum by MMT economists for literally decades.
In order to make sense of this interview, you have to keep in mind that when Gerry says, "They don't talk a lot about X," what he really means is, "I haven't read enough to know what they say about X." Once you realize that, it all makes perfect sense — but mainly as an embarrassing, unintentional confession of guilt.
The discussion of national priorities is a matter entirely separate from the mechanics of monetary policy.
The naivity of MMT is best shown in the idea that government spending is unlimited but admits the limit is set by inflation an therefore the government has to control inflation through taxes. When the government can spend money ad infinitum it would also have to raise the taxes ad infinitum to control inflation! A very absurd idea.
A government that spends year over year more than in collects through taxes can not control inflation, since all the money it collects is spent right away plus the difference that equals the deficit! In other words the government increases constantly the money supply (credit) but controlling inflation would require the opposite!
MMT claims that the government can create as much money as it wants… it is only limited by inflation! Believe me I can throw a baseball to the moon… I'm only limited by gravity!
Mr. Wray seems never heared about double entry accounting standards or he supresses the fact deliberately. The "key stroke" at the government (or Fed) is just one side of the account!
Furthermore he talks about the government like it is some "deus ex machina". He does not understand that the "government" is the entire population of a country and not some bureaucrat with an infinite wallet. We live in a real world that is bound to natural laws. On this planet there is nothing infinite. So even the ability to create money for a government is limited. The Weimar Republic has experienced that the money creation has an end at some point and if you try to push it ad infinitum it will end terribly. MMT is a political dogma but certainly not a scientific theory.
Um, this guy is strawmaning MMT. No sensible MMT advocate says that if you try to expand the economy beyond its carrying capacity you will not get inflation. MMT says that the government can in fact spend without limit, but you may get inflation. The advice from MMT is that the government can always buy "anything available for purchase" in its own currency. If a government tries to spend beyond the carrying capacity of the economy then you will see inflation and I don't know of any MMT supporting economist who says otherwise.
He is for the status quo and his arguments are very weak.
Firstly the UK had negative inflation for a time after the 08 crash, It bailed out the banks to the tune of over 1 trillion pounds, no inflation. So he is wrong there. It also shoots a hole in that only america can do it for now. Randy does not say america can print of money at will be cause the dollar is king. He says it can print off money because its has a central bank and the US owns its along with the dollar. This is the same for any country in the world which as a central bank and currency. Even the European Central bank bailed out major european banks during the crisis and that was not a national central bank but the EU's.
If Morocco wants to fund massive programmes within its borders using its currency its can do, as it has its own currency et al. So Epstein is wrong there. The only countries that cannot do this are the ones that do not have central bank, ie the EU countries,hence the problem of greece et al. He is ok for bailing out the rich but not the rest of us.
This cannot stand, you are getting very educated people homeless or going to work hungry and relying on food banks.You are setting the state for a revolution, just look at Great Britain it is in near revolutionary state, being neutral is being seen as a betrayal, either you are for brexit or not. Corbyn in has come neutral for staying or not leaving the EU both sides do not like this even though for a political leader it is a good stance.
So in conclusion Epstein has poor arguments, he wants to have comfortable life and MMT spoils his expensive meals
The whole idea that Tax deceases inflation is just an absurd one. – That is because taxes are re spent by the government and do not disappear from the economy. They merely transfer spending power from the private sector to the government sector who, as said, spend it again.
MMT has no proper understanding of the term "affordability". It's understanding is so narrow it is worthless. It is not having an ability to mark up digits on a computer. Affordability is looking at the resources available , being human, natural and other.
Countries that had their own currencies that went to absolutely no value at all due to excessive money expansion had the capacity to mark up digits on a computer and did so but they eventually could not afford to buy anything with that money since nobody wanted it. It had been made worthless by their government's bad financial management.
Randall Wray shows a moronic understanding of the term 'affordability' when he says the government can create money by keystrokes. Affordability is about having the resources to be able to afford something. That does Not improve with increases in the number of currency units.
Affordability only increases with greater efficiencies in production.
He states the government does not bid against the private sector to get employees into this program". This is clearly fantasy.
There is no separate market for employment in the economy where government does not compete with private enterprise for human resources. A demand increase for government human resources competes with private business since people take government jobs where they a cannot find a private sector job to suit them.
His claim that a fixed wage doesn't push wages up is also fantasy since it depends on the price of the wage.
We currently have a vast range of employments that are causing ecocide and homicide across the world. The JG could be used to aid the reassignment of these employees into more useful employment. There are surely ethical, social and urgent environmental reasons for the JG to compete with parts of the current private sector and to drive them out of the world economy before they drive us out of the universe.
You guys really should put links to all 4 videos in the description. It took me several minutes to find all 4 videos.
This is a strawman argument . Mmt advocates hava as a basic principle that the constraint on government spending is the availabilty of free productive resources . Once the economy is operating at full capacity the spending limit is reached. It is not reached when millions of people are unemployed. Mmt advocates argue that the buffer zone of near full employment be regulated by a job guarantee fixed wage buffer stock of jobs that provides a ready supply of currently employed, trained workers from which the private sector can recruit. This stabilizes the labour market without exerting inflationary pressure on wages. Political choices about what to prioritise within this real spending constraint are for politicians to decide not an economic theory of how money works.
Epstein is worried about 'investment', in other words, the RICH. He is MISREPRESENTING what MMT says, total tool of our corrupt establishment. Paul Jay does a GREAT DISSERVICE trying to tell people about MMT with this guy – smdh. And Liz Warren is a FAUXgressive, she will NEVER give us good things.
Epstein says it is 'printing money', but it is TYING the money issued to our REAL RESOURCES, like labor and goods/services! He is a bullshitter.
Let's tell the public about the SCAM of 'privatization' – and our many DOZENS of war companies are 'privatized'. And the progressives like Bernie and AOC and Tulsi Gabbard DEFINITELY talk about CHANGING our military spending and our GOALS of the people in the military. However, our system is run by corrupt sociopaths – privatization is NOT what they tell us it is. Privatization is the SCAM whereby people running any privatized company BILL THE FEDERAL GOVT ANY AMOUNT, providing massive exec salaries and INSANELY HIGH profits. Wall Street firms invest, knowing that profits are GUARANTEED via federal money! This is why the corrupt push to privatize EVERYTHING. So far we have all those war companies – and both parties shovelling unlimited money to them – many federal prisons, our detention centers, healthcare insurance and MORE! The bastards are now pushing to privatize public education, the VA, the Post Office, infrastructure. They want IT ALL for themselves, so they can siphon off federal money as much as they want.
Epstein is using all the establishment bullshit talking points and fearmongering – TOTALLY untrue and misleading! I guess his organization is one of those bullshit 'think tanks' set up to keep duping the public. SHAMEFUL!
So Paul Jay gets an establishment naysayer who misrepresents it. Paul Jay needs to get someone NOT trying to dupe the public!
MMT explicitly says that you always do need to tax, to create demand for money. Taxes do not fund spending, taxes "drive money".
Mr. Epstein is wrong. We didn't have a crisis in 2008-10 because government over spent. We had a crisis because of banking fraud. We need the government to control of the currency and control the power of the banks and the monopolists.
Unfortunately, this gentleman is mischaracterizing MMT because he doesn’t get it. He’s wrong about what MMT says. So, he’s not a help at all to the Progressive cause. MMT is not a policy. It’s a description. The description accurately describes our monetary system. It also shows us what’s possible and what the real constraints are. I think Jerrry needs to actually study MMT and speak directly with MMT economists before he tries to critique it. He’s simply way off.
Garald needs to get unstuck ! Lose your orthodoxy and your fear !
No debate MMT IS FACT !
The "MMT is an America First/Exclusive monetary policy" is a complaint I've also heard from Steve Keen.
Finally someone says cut back on the military. DUH
PRINTING MONEY, PRINTING MONEY, PRINTING MONEY. After about the 10th time he said PRINTING MONEY, I knew he was full of shit.
1:30 NO, Jay. MMT does NOT "propose" that "you don't have to do either [taxing or borrowing] of those things to pay for the GND". MMT actually observes that taxes and borrowing LITERALLY do not fund anything. Every dollar of federal spending is new money creation. Not old recycled tax money. EVERY dollar spent. Already. NOW. This is just how it works. Not a "proposal"!! There are no "choices" for how to pay for things. It is only done one way. Gravity is not a policy choice.
Mr Epstein is completely misrepresenting MMT. MMT talks about the internal speed limit of the economy. MMT looks at resources not money. It says if the resources are their the money should not be the limiting factor. MMT does not say you can just create money when there are no resources, it is very clear that there is a limit, but the limit isn't money when it comes to the Federal government's spending its resources. Inflation happens when you overburden the resources. It also says that limiting the supply of money when there are excess resources is a waist. When there is excess hoarding in MMT that means you have to "print" money to compensate for the lack of supply. A better option would be to limit the hoarding by taxation, because if the hordes decide to flood the market with their excess supply you could get inflation from an uncontrolled source after the fact. The principle is pretty basic, if there are available resources (typically labor) you make the money to let the resources work.
Not paying attention to the available resources in the current non-MMT model is the problem we have now. They create a bubble (the latest one was the derivative markets) by not limiting the speculative creation of fake money, as in leveraging 30x to 1 or in the AIG case XX to 0 since there was no capital requirement in the derivative insurance market. That is what causes the bubble-bust cycles we have been dealing with. In MMT at least you are paying attention to available resources. Also, the 2008 bailout involved the FED creating currency for banks all over the World, not just the US. During this latest financial meltdown, the derivative market created a bubble and the FED responded by filling in the bubble with an est range from $21-29 trillion… and it is a good thing or we would have had a money crunch. The problem is that under the current system they gave that money to the creators of the problem instead of tackling the problem head on by securing the loans and stabilizing the market from the bottom up. Doing the top down approach created a lot of multi-millionaires, over capitalized corporations and even a centibillionaire or two.
The other very disingenuous part of this conversation is the blame for the looming threat of an alternate default currency. There are a lot of factors that play into that, but the US turning off its production capacity and becoming more dependent on international labor will eventually reach its limits. We need a proactive government that supports the labor markets to keep that from happening, so by doing that MMT will actually strengthen the dollar, not weaken it. The derivative markets and the boom/bust cycles of thievery are the real culprits there.
Epstein doesn't know what he is talking about.
#MMT
If America can do MMT then the rest of the world can. My country was never in debt till world bankers and American oligarchs showed up with money and free trade. Now somehow we got to have austerity because of it, where we never did before. This MMT is just another rich man trick, because their backs are against the wall. MMT would, used properly, create utopia in the USA and as for the rest of the world too bad you just going to have to suck it up, work harder and accept austerity. If you can't except austerity then you will be bombed into the stone age. Must be nice to think because of the USA's military you can have a free ride on the backs of the rest of the world. Screw this free money give me jubilee or tax the shit out of the rich. Free money is never free somehow the only ones that get it are banks and the military industrial complex for more wars. What I get is enslaved by the responsibility of that debt. What happened in 2008? Fed's created free money, rich dicks got bonuses, and job security, the rest lost their houses family and everything that resemble any kind of dignity and an organised society. The masses never seen a cent of the free money, other than not quiet enough to pay the bills. TRUST US we won't come in your house. OBummer worst or worstest president ever. Where's GM this week, heading to Mexico with all that free money what did we get????
I'm sure everyone has asked themselves. Why the question of how to pay for this never comes up when it comes to the military budget. And I'm talking to both parties. All the decision makers.
Epstein is incredibly disingenuous in a literally sinister way. Seemingly so benign but people are dying now, today with the current policy. By creating a jobs program those in the military who would prefer not to be would automatically move to the jobs program as jobs were available. This does not "let the military off the hook." Everyone in this movement are of the staunchest anti-war advocates. Also, Japan has only a negligible military that does well to protect its own waters. To spread fear porn about it becoming a global currency that rivals the U.S. is not even close to real. The straw man argument regarding full employment is frakked because he knows the jobs program will shift to private sector jobs and become smaller which provides feedback as to spending and fine tuning of human resource options, such as allowing more people in to the country who have the requisite skills or would agree to be trained.
Epstein's arguments sound incredibly weak…
@15:50 Epstein is shooting progressives in the foot. Yes, CURRENTLY the USA purchases most produce from overseas. It is inherently exploitative. But that has nothing to do with MMT. If the USA funds it's own increase in domestic production, rejuvenating the manufacturing sectors, but with green energy, then it can cut back on imports. It can fund domestic sectors using deficit spending. It is anti-progressive to increasingly rely on imports.
What is new about MMT? The debate comes down to the same old issue of either you have a sound currency or you print money and have wars, folly, and inflation. It's the same old BS being rebranded, repackaged and resold as something new.
@8:25 Epstein is horribly wrong. He seems like a f___king neoliberal idiot. The financial crisis was not created by relaxing money supply, it was created by increasing household debt in ratio to GDP — which is essentially the opposite of increasing money supply. The 2008 crises was too much money in the hands of the 1 percent, and too much debt for the rest. If there was too much money floating around making a demand-pull inflation then the housing loan defaults would not have occurred. When government deficits are slashed, household debts rise and you get Minsky debt-deflation crises.