Understanding The Modern Monetary System...
A few days ago, I complained that Matt Yglesias seemed to be ripping off Monetary Realism posts, or at least riffing on them. selise pointed out perhaps “great minds think alike” and well, I guess it is in the air. I then said he would start writing about automating fiscal policy because we were writing [...]
A few years ago I predicted the “Godzilla of all bond rallies” once QE II ended. Let’s revisit this prediction, and talk for a minute about a recent post a certain Mr. Roche concocted over at PragCap. First, how did the prediction fare? Excellent! After I posted about a huge rally in bond prices (and [...]
Of course, if you read this blog, you’ve already heard about the incredible (and not certain) actions taken by the government of Cyprus. Cyprus wants to “tax” every depositor in every Cyprus bank to pay for a banking bailout. The depositors would lose some part of their cash deposits in the bank, and get shares [...]
Matthew Klein has a great, last post up over at Free Exchange. It’s a frustrating post, because it lays out many of the themes and ideas which are floating around the world, and tries to tie them all together into a coherent whole that explains everything. It’s a long post, with lots of great charts [...]
Mark Thoma catches Tim Duy who catches an analyst saying: “”The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock,” Lynn Franco, director of economic indicators at The Conference Board, said in a statement.” One [...]
Izabella Kiminska has a great post up about automating fiscal policy: ”Compensate the unemployed with credit/debt/government spending and use automated fiscal stabilisers to tweak inflationary and deflationary side-effects. Or, alternatively, employ them — for the sake of humanity — in big mega projects that stimulate our creativity, scientific and academic knowledge, and culture. Fiscal policy [...]
I’ve been thinking a lot about this over last few weeks when I have the chance to think. It seems like we are on a real estate monetary standard. Much like how we can use assets like gold to create a commodity money system, it seems like we operate our current monetary system as a [...]
Noah Smith asks a funny question on Twitter: ”Hey, anyone remember the trillion dollar coin? ^_^ ” I’d say Paul Krugman and Steve Waldman remember the trillion dollar coin quite well. So do all of the people listed by Steve Waldman in the beginning (and the end, Frances and Ashwin!) of his post. The coin was [...]
Carlos Mucha of Monetary Realism discusses the Trillion Dollar Coin for the New York Times: “Under the Constitution, Congress is given the authority to create money. Congress has delegated this power to create money to two agencies: the Federal Reserve and the U.S. Mint. For decades, the Fed has issued paper money and assisted the [...]
We’ve had some discussions within the MR team on the costs of minting a coin vs. the costs of borrowing. It turns out it’s more expensive for the U.S. government to mint a coin than it is for the the government to borrow money. It sounds crazy, but it’s true. If the U.S. mints a [...]
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