When Congress directs the US treasury to do something that requires new money be created, what is the process of that new money coming into existence? This article is based on this interview with Warren Mosler. https://youtu.be/480sGei5ZsA The mechanics of how the US treasury creates new money Step 1: The US treasury sells bonds to … Continue reading How the US Treasury creates new money
Someone shared the tweet thread below with me on either Facebook or Twitter (can't remember) and it's EXCELLENT. So I've recreated it here, as faithfully as possible to the original as I can. I learned stuff and I hope you do too. To see the original tweet thread, click here. Tweet Thread About Reserve Accounting … Continue reading Understanding How Modern Money Works, Requires Knowing Reserve Accounting
We are not borrowing money from China...... What the Government is doing is creating its own financing to activate idle resources. Just like the private sector does.The Cowboy Economist (aka John Harvey Ph.D.) In this video lesson, the Cowboy Economist explains how the federal government finances its deficits. But before you watch this, you really … Continue reading Cowboy Economist Tells Us How the Government Finances Its Deficits
Did you know commercial banks create money out of thin air every time they loan money? You may have thought that when you take out a $30,000 car loan, the banks takes $30,000 from their vault, and loan you other people's savings. This is not the case. They literally create $30,000 out of thin air, … Continue reading Cowboy Economist Tells Us How the Private Sector Finances Its Deficits
This is really a question or inquiry from me. I'm not an economist. Both of these terms are new to me. Adam Smith spoke about Economic Rent. Rent-seeking is an individual's or entity's use of company, organizational or individual resources to obtain economic gain without reciprocating any benefits to society through wealth creation. As defined … Continue reading Is Economic Rent (Adam Smith) and Fictitious Capital (Karl Marx) the Same Thing?
I listened to an interview of Warren Mosler by Bob Murphy, for episode 18 of The Bob Murphy Show podcast. A link to the full interview is at the bottom of the post. The interview is easily divided into three sections, which can be listened to independently if desired, so I broke the interview audio … Continue reading Warren Mosler Interviewed about Modern Monetary Theory (MMT)
To be clear, this applies to currency issuing governments ONLY. This is true of the US Federal government. This is not true of the government of Texas. The US is the currency ISSUER. Texas is a currency USER, just like you and me. Having said that, the reason we have money is because the currency … Continue reading Government Deficit Spending Creates Private Sector Surpluses
That's not me talking. It's Frank Newman, former Deputy Secretary of the US Treasury. Per Frank, the US national debt is nothing more than the sum of outstanding Treasury Bonds. There isn't a national credit card where we borrow from the Bank of China. That simply isn't a thing. The audio quality of the clip … Continue reading US National Debt Never Needs To Be Paid Down
According to Michael Hudson, it means today almost the polar opposite of what it mean when Adam Smith used the phrase in The Wealth of Nations. In an interview during an episode of the podcast Guns and Butter, Michael Hudson spoke of a book he wrote titled J is for Junk Economics: A Guide to … Continue reading What Does “The Free Market” Mean?
The first published book describing how our modern economy works was published in 1993. The title is Soft Currency Economics: What Everyone Thinks That They Know About Monetary Policy is Wrong. The author is Warren Mosler. Who is Warren Mosler? Warren Mosler is identified as an Economist, when it seems that's true now in retrospect. … Continue reading Who Figured Out MMT? When? How?