The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
But the far more significant power is for the government just to credit checking accounts for purposes it chooses. It currently does this with income tax refunds, Social Security payments, Medicare, etc. The vast majority of "money" is just electronic credits and debits.
Modern Monetary Theory holds that governments can spend on socially necessary functions, especially in times of unemployment, up to the level that will start to produce increases in the cost of labor without having any inflationary effect. What happens is that socially needed tasks get done by labor that otherwise would have been unemployed. The economy and society thus benefit from production that otherwise would have been lost forever. People who are capable of doing useful things cannot go back and work on a previous day when they were involuntarily unemployed.
Bill Mitchell at BillyBlog and Randal Wray, Michael Hudson and others at New Economic Perspectives have written extensively on this subject. Crediting someone's account actually does not "print money" although the account holder could certainly turn the credit into cash should they so wish. A better term for this would be that by so doing the Government "spends money into creation", while taxes take money out of the economy. I don't pretend to understand all of the details of this but I can see that theories of economics that include monetary models that are not congruent with how the system actually works are not going to give good or useful results. Those who would criticize government spending in times of recession always resort to arguments based on false premises as to how our monetary system works.
"It is not necessary to have hope in order to persevere."
by Frank Schnittger - Sep 24 2 comments
by Oui - Sep 19 18 comments
by Oui - Sep 13 32 comments
by Frank Schnittger - Sep 11 5 comments
by Cat - Sep 13 9 comments
by Frank Schnittger - Sep 2 2 comments
by Oui - Sep 26
by Frank Schnittger - Sep 242 comments
by Oui - Sep 1918 comments
by gmoke - Sep 173 comments
by Oui - Sep 153 comments
by Oui - Sep 15
by Oui - Sep 1411 comments
by Oui - Sep 1332 comments
by Cat - Sep 139 comments
by Oui - Sep 126 comments
by Frank Schnittger - Sep 115 comments
by Oui - Sep 929 comments
by Oui - Sep 713 comments
by Oui - Sep 61 comment
by Frank Schnittger - Sep 22 comments
by gmoke - Sep 2
by Oui - Sep 1177 comments
by Oui - Aug 315 comments
by gmoke - Aug 302 comments
by Oui - Aug 304 comments