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From life's experience each theory is proven right until under duress the shortcomings come to light. I have lived through the Kennedy investment in America's Space Program and boost to technology, innovation, education and the sciences. The mistaken costs of the Vietnam War (Johnson) and domestic political unrest did likely offset much of the positive economic boost. The Nixon shock of economic measures and dollar conversion cut from the gold standard (1971) led to runaway inflation and the recession of the eighties.  The International shock of Middle East conflict, oil price spike of 1973, the Asian Stock crisis of 1987, the Savings and Loans crisis, recession of the nineties, the Internet bubble of 2000-2001, etc. added to a cyclical uncertainty.

My worry is the savings and pensions of those not involved in the workforce. The Dutch used to have the best pension benefits, but under Conservative policy of Mark Rutte, the younger generation are mostly "self-employed" and lacking social benefits. Absolute no room for a pension after 70+ years of age. This is not investing in a future for society, just reaping profits and not sowing seeds for improvement.

Some criticism from "the left" ...

Eric Tymoigne and Randall Wray's (2014) defense of MMT leaves the MMT emperor even more naked than before (excuse the Yogi Berra-ism). The criticism of MMT is not that it has produced nothing new. The criticism is that MMT is a mix of old and new, the old is correct and well understood, while the new is substantially wrong. Among many failings, T&W fail to provide an explanation of how MMT generates full employment with price stability; lack a credible theory of inflation; and fail to justify the claim that the natural rate of interest is zero. MMT currently has appeal because it is a policy polemic for depressed times. That makes for good politics but, unfortunately, MMT's policy claims are based on unsubstantiated economics.

[The Critics of Modern Money Theory (MMT) are Right - by Thomas I. Palley]

From the nineties ... Reagan's Voodoo economics now mainstream?

Modern Monetary Theory: A Critique

Oversupply of money - affordable housing - higher education - poverty level in affluent society.

The Covid-19 spending by government keeps unemployment low, because workers are on the government pay-roll ... this will not last. As one can witness in the stock market, a tectonic shift to the tech sector and everything digital. The shortage of microchips is already biting in manufacturing and the economy. People have their workplace at home, but the increase in road traffic increases due to retail shops going bust and goods we buy in the web shops need to be delivery by couriers. Are we just patching up the shortcomings until heaven of doom falls from the sky? Just as sudden as the Covid-19 pandemic was foreseen, but corporations and politics refused to act. Climate change, rising sea level, extreme drought and rainfall just to name some obvious challenges.

COVID-19 has created a new poverty class in Europe

Barcelona is a city known for its architecture, culture and thriving business sector.

But the city has recently revealed a darker side: people from all walks of life are suddenly finding themselves exposed to hardship and occasionally hunger.

The economic crisis caused by the pandemic is wreaking havoc, especially among the middle classes. Nearly half the people asking for social and financial help now are called the "new poor". They're people who, for the first time, are in a position of vulnerability.

The territorial impact of COVID-19: Managing the crisis across levels of government | OECD |

It's abundantly clear governments are setting policy in unchartered waters ... Dutch saying: "Op hoop van zegen." Just like a farmer sowing in seeds in either a dry field or extremely wet, hoping to harvest a crop of abundance.

PS Interesting to discuss the effect of American capitalism by controlling the spigot of fossil fuel: heavy sanctions on Iran-Libya-Iraq-Russia and possibly Turkey in the near future. Artificially keeps the price of a barrel of oil high and funnelling wealth to the sheiks of the Gulf States and the new oil barons of fracking in the America's.

by Oui on Thu Apr 29th, 2021 at 06:02:39 AM EST

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