"Modern Money Basics" in Modern Money Theory (M.M.T.)x

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Wossname
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Wossname »

gad-fly wrote: May 16th, 2020, 12:08 pm y gad-fly » 50 minutes ago

The theory of Money Supply can be found in most economic textbooks. Government's role in money supply cannot be independent of that played by the economy. If government collects $X and spend $Y, then money supply is reduced by $(X - Y), which can be described as deleted, removed, or destroyed.
If it collects X and spends X, money supply is not affected. It is a moot point whether X has been destroyed and recreated.

If Y exceeds X, it ha increased money supply by creating new money. Whatever its intention is a different issue.

I hope we can now focus on taxation.

Well, what do you want to know that has not been explained? Remember the B. of E. says many economics textbooks are wrong about stuff. You have the position from MMT (or at least, two key functions of tax). Do you have a question about this?
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Sculptor1 »

Steve3007 wrote: May 16th, 2020, 9:17 am
Steve3007 wrote:I didn't ever say that there was such a necessary relationship and I've no idea why you think that I did.

Words, words, words. All ignored. All a waste of time, I guess.
Yes, you did as it happens.

by Steve3007 » April 27th, 2020, 5:30 pm

"7. If we say that government spending creates money in the economy and taxation deletes money from the economy, this doesn't alter the fact that taxation pays for public services."

But I am glad that you seem to have come round to our way of thinking.
You should follow RM's blog

https://www.taxresearch.org.uk/Blog/richard-murphy/
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

Steve3007 wrote:I didn't ever say that there was such a necessary relationship and I've no idea why you think that I did.
Sculptor1 wrote:Yes, you did as it happens.
Steve3007 wrote:"7. If we say that government spending creates money in the economy and taxation deletes money from the economy, this doesn't alter the fact that taxation pays for public services."
Are we clear what we both mean by the term "necessary relationship"?
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

Wossname wrote:Don’t know why you keep insisting I’m pushing a political agenda.
I didn't say you were "pushing a political agenda", did I? I said that you appear to be interested in something different to me. That's not the same as telling you that you are "pushing a political agenda". Take another look at this example of me saying this:
Steve3007 wrote:I think you were looking for a practical political discussion about the politics of austerity, in the light of MMT, not an esoteric philosophical discussion about the respective natures of abstract and real entities.
That's not me telling you that you're pushing a politcal agenda, is it? Is there somewhere else where you think I've told you that you are pushing a political agenda? Is so, where?
Wossname wrote:I have just responded to your questions.
I honestly don't think you have. I don't mind that. I really don't. As I said, you're free to discuss what you're interested in. You're free to ignore my comments if you consider them to be off-topic, or just not very interesting. I've told you what I'm interested in and how it appears to differ from what you appear to be interested in.
Wossname wrote:As to movement or deletion, I have noted the other thread and the reason for it. Talking of people being strongly motivated to look for something to support their view, are you sure this is not you here?
Maybe. But I don't think so. As I said in one of the posts in that topic, one of the interesting things about philosophy (to me) is stepping back from the details of individual subjects and looking for wider questions that they throw up. To my mind, one of the wider questions thrown up by this topic about fiat money is the one I set out in the OP of that other topic. That doesn't mean I'm somehow bent on demanding that everybody accepts that cutting and pasting is the same (for abstract concepts) as moving. It's just an interesting question (to me).

I think it's possible to find a question interesting, and to discuss possible answers to it, without pre-insisting what the answer is, or even that there is a definite answer. If I think that the principles of fiat money elucidated by MMT result in a wider question which touches on such apparently unrelated subjects as teleportation, I see nothing wrong with starting a topic about it in a philosophy forum.
The government can write as many IOUs as it wants. Whenever it wants.
Just to clarify: You are aware that I have explicitly said this same thing myself many times, yes? I've also re-quoted myself saying it in case you missed it.
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Sculptor1 »

Steve3007 wrote: May 16th, 2020, 1:55 pm
Steve3007 wrote:I didn't ever say that there was such a necessary relationship and I've no idea why you think that I did.
Sculptor1 wrote:Yes, you did as it happens.
Steve3007 wrote:"7. If we say that government spending creates money in the economy and taxation deletes money from the economy, this doesn't alter the fact that taxation pays for public services."
Are we clear what we both mean by the term "necessary relationship"?
Yes.
It looks like this:
"that taxation pays for public services."
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

A necessary relationship is a relationship which is not optional. It necessarily obtains. So if we believed that there was a necessary relationship between goverment taxation and spending, we might say things like this:

"When governments raise taxes, they must spend that money on public services. Spending on public services can only rise if taxes rise. Public services can only be funded by taxation and nothing else. Governments can't create money for public services without deleting an equal amount in the form of taxation." etc.

Note the parts in bold. Do you agree that if we thought there was such a necessary relationship we would say something like this?


Now, here's that thing you quoted me saying:
Steve3007 wrote:If we say that government spending creates money in the economy and taxation deletes money from the economy, this doesn't alter the fact that taxation pays for public services.
And here it is in the context from which you quoted it:

viewtopic.php?p=356531#p356531
Steve3007 wrote:7. If we say that government spending creates money in the economy and taxation deletes money from the economy, this doesn't alter the fact that taxation pays for public services. If I have a quantity of something and I notice that it has vanished (been deleted) from one place and if I notice that the same quantity has appeared somewhere else, then I can reasonably take the position that this quantity has moved from the former place to the latter. Obviously, in the case of money, this is not the same as saying that a physical object has moved, because money is not a physical object. And there is no "law of conservation of money" as there is with matter, unless the government wishes to impose one on itself.

Therefore, in the absence of the creation of new money which is more than the amount which was "deleted", we can say that the government "moves" money from one section of the economy to another, via the mechanism of taxing and spending; cutting and pasting. The notion that this money is deleted in one place and an equal quantity of money is created somewhere else doesn't change this.

If a government wishes to keep the same quantity of money in the economy from an earlier time period to a later one - i.e. it wishes to enforce a conservation principle on the total amount of money in the economy, then it does this thing that we can call moving money. So, in that sense, money collected via taxation is spent on public services. Whether we refer to that process as deleting money from one place and creating money in a different place doesn't alter that.

Obviously government can also choose to delete more money than they create or vice versa.
Note, again, the parts in bold. Do you think that the person who wrote that is stating that there is a necessary relationship between taxation and public spending?
Wossname
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Wossname »

Steve3007 wrote: May 16th, 2020, 2:34 pm Steve3007 » Today, 7:34 pm

Oh there is nothing wrong with considering philosophical issues that arise in conversation. I am for that. Never said otherwise. Daft not to in a philosophy forum.

You say I appear to be interested in something different to you. To be clear, do you consider this thread still about MMT (which I am trying to outline), or about the issue you have raised in another thread? I think gad-fly is still asking about MMT. In as much as the other thread impinges on this, you have my answer.

If you feel I have not answered a question you have asked do please ask again. I have tried (honestly), and where I have disagreed I have always sought to say so and explain why (or tried to). Never said I was any good at it.
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

Wossname wrote:If you feel I have not answered a question you have asked do please ask again. I have tried (honestly), and where I have disagreed I have always sought to say so and explain why (or tried to). Never said I was any good at it.
Obviously I don't mind you disagreeing with me. But, where it happens, I would prefer it to be with something that I've actually said. Please consider again this quote from a recent post of yours:
Wossname wrote:The government can write as many IOUs as it wants. Whenever it wants. This explanation has been offered to you a number of times and on different links (if you visited them). But you are at liberty to think of these matters as you please, and if you are at odds with various economics professors that does not in itself make you wrong, but it may limit my confidence in your view.
As I asked in my previous post to you, with reference to the first sentence of the above:

Just to clarify: You are aware that I have explicitly said this same thing myself many times, yes? I've also re-quoted myself saying it in case you missed it.
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Sculptor1 »

Steve3007 wrote: May 16th, 2020, 4:17 pm A necessary relationship is a relationship which is not optional....
You can play sophistry as much as you like but this;
"that taxation pays for public services."
is false.
Wossname
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Wossname »

Steve3007 wrote: May 16th, 2020, 5:02 pm Steve3007 » 19 minutes ago

Wossname wrote:
The government can write as many IOUs as it wants. Whenever it wants. This explanation has been offered to you a number of times and on different links (if you visited them). But you are at liberty to think of these matters as you please, and if you are at odds with various economics professors that does not in itself make you wrong, but it may limit my confidence in your view.
As I asked in my previous post to you, with reference to the first sentence of the above:

Just to clarify: You are aware that I have explicitly said this same thing myself many times, yes? I've also re-quoted myself saying it in case you missed it.


You say you agree money is an IOU. The issue is to do with what this means. A cashed in IOU is just a worthless bit of paper (or whatever). It has no more use. If you agree, as you say, what is the point of moving it around or how can it pay for public services? Yet this is what you seem to be suggesting. There is a misunderstanding somewhere here. Can you clarify?
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

Wossname wrote:You say you agree money is an IOU.
Sorry to insist on this point before moving on but, no that's not what I said there either is it? I wasn't talking about money being an IOU and neither were you. (It is an IOU, but we weren't talking about that). Here it is again:
Wossname wrote:The government can write as many IOUs as it wants. Whenever it wants.
Steve3007 wrote:Just to clarify: You are aware that I have explicitly said this same thing myself many times, yes?
What is it that you're telling me and then I'm telling you I've said many times? I've said many times that the government can write as many IOUs as it wants. i.e. I've said many times that governments create money and therefore don't have to raise taxes when also paying for public services. And conversely, they don't have to pay for public services even if they're raising taxes. I've put that in various ways before. For example this:
Steve3007 wrote:Governments are allowed to cut without pasting. Governments are allowed to paste without cutting.
Sorry to keep homing in on this one point, but I can't see the point of any further conversation unless the reply to a post is actually a reply to what was written in that post. Otherwise we'll just end up with the same situation again.
Wossname
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Wossname »

Steve3007 wrote: May 16th, 2020, 5:55 pm y Steve3007 » 16 minutes ago

Wossname wrote:
You say you agree money is an IOU.
Sorry to insist on this point before moving on but, no that's not what I said there either is it? I wasn't talking about money being an IOU and neither were you. (It is an IOU, but we weren't talking about that). Here it is again:
Wossname wrote:
The government can write as many IOUs as it wants. Whenever it wants.
Steve3007 wrote:
Just to clarify: You are aware that I have explicitly said this same thing myself many times, yes?
What is it that you're telling me and then I'm telling you I've said many times? I've said many times that the government can write as many IOUs as it wants. i.e. I've said many times that governments create money and therefore don't have to raise taxes when also paying for public services. And conversely, they don't have to pay for public services even if they're raising taxes. I've put that in various ways before. For example this:
Steve3007 wrote:
Governments are allowed to cut without pasting. Governments are allowed to paste without cutting.
Sorry to keep homing in on this one point, but I can't see the point of any further conversation unless the reply to a post is actually a reply to what was written in that post. Otherwise we'll just end up with the same situation again.


I agree we need to clarify. I am seeking to do that.

But, back to cutting and pasting? You are suggesting the government would want to move around cashed in IOUs? If not, what are you saying? What do you mean by taxes pay for public services?

MMT says not. It can't be taxes pay for public services and taxes do not pay for public services. If you think taxes sometimes pay for some of them then that is not MMT.

Do you agree with MMT or not? I am still not sure.
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

I just don't seem to be able to get you to focus on what is actually being said, so I don't see any point in continuing. I could launch into yet another post about MMT but, based on current evidence, I don't think it would be read. I think it would be block-quoted and then followed by a comment that would be more or less irrelevant to its contents.
gad-fly
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by gad-fly »

The technical aspect of Money Supply is a technical concern. Call money destroyed and created, an IOU, or some reinvention. That can be allowed, though confusing. Does tax fund public expenditure, like me spending what is in my wallet? Strictly speaking, I do not have to. I can keep that in my wallet, and borrow to spend, too.

Money supply is the size of the economy, reflecting asset valuation of all there is. If government prints 10% more money, it does not increase the size of the economy by 10%, whether it keeps that or dole it out. Why? because you do not create value by fiat. If that is idle money, who cares? I f that is applied, you may see a ripple which would settle down soon. Why? Because no value has been created.

MMT theorists may compare government to maker, defender, redeemer, and friend, but it is no more than an apparatus created by us voters to do a job. We should be aware of its limitation.
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by gad-fly »

Wossname wrote: May 16th, 2020, 1:02 pm
Well, what do you want to know that has not been explained? Remember the B. of E. says many economics textbooks are wrong about stuff. You have the position from MMT (or at least, two key functions of tax). Do you have a question about this?

Are you referring to What is Legal Tender? I can agree with there being a narrow technical definition. Please resend link. If I do not agree with the two said functions, I owe you an explanation.
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