Woah anons... What do we do with this information...

[Anonymous No.53237619]

>The main claim of mmt is that "the only thing to worry about is inflation when offering cheap credit" Which is simply not true.
Cheap credit misallocates resources to undemanded/lesser demanded ventures, & at the same time as higher order production (thereby distorting our time preference/the structure of production). Monetary expansion also creates a dependency on continuous overvaluations. Not to mention distorts price signals, because of relative price stickiness, unequal velocity within different sectors, & circular demand within scarce demanded goods (assets). Then there's the cantillon effect, where wage & fixed-income earners see their savings relatively hurt & income lag behind, while rich asset owners see their net worth rise. It's a wealth transfer. Small businesses with less assets are hurt while large corps grow, leading to a privileged few with all the purchasing & bargaining power. Speculation also increases as lesser educated consumers borrow, invest, & consume, thereby exacerbating volatility & the misallocation of resources. They do this because borrowing is made less expensive & cause in many areas throughout the economy (especially assets) prices rise given time, so it's better to spend now. People are incentivized to save in assets instead of money, which is bad for productivity & ultimately satisfying customer demands. The housing & land people buy & flip nowadays could've been bought with actual use value by consumers & producers. Saving in money only aids in the production cycle.

>When these ever-growing malinvestments inevitably must end, & the spigots of cheap credit are cut, a 'deflationary death spiral' must ensue.
You have to allow resources to be freed up, consumption to be detered, & then properly allocate them to where they're demanded.

[Anonymous No.53237648]

>>53237619

Market set interest rates & a scarce divisible currency naturally fix this. Lenders & borrowers must compete for scarce savings. Through sound credit standards, based on proper price signals, these funds are allocated to demanded ventures. In direct proportion to how demanded they are & how much consumption is detered through saving. Since there's no inflationary effects, our time preference of consumption & production is balanced, thereby allowing projects to reach their full potential.

Monetary expansion interferes with needed corrections & exacerbates structural issues. We need to raise rates, default, & let the market properly restructure.
Building up our productive capacity is the only way to viably get demanded goods & services.
There's no shortcut.

[Anonymous No.53237666]

>>53237648
Mmters also define 'inflation' differently, which leads to a lot of confusion in the debate over their stupid policies. They define it as the cpi, & a terrible measure of it at that. There's obvious problems with this, as each (numerical) price can be affected differently by monetary expansion. Prices could drop, rise, or flatten out in various sectors. What they're not factoring in is opportunity cost & foreign investment.
Prices would've been lower had we not intervened.
Foreigners finance our reckless spending. We get most of our produce from imports & don't produce much of anything, especially that the world demands. Nor do we have any plan to in the future. Our trade & budget deficit grows evermore.
In other words, our entire economy is a bubble built on inflationary credit, at the world's expense, & we have no surplus coming anytime soon.

[Anonymous No.53237685]

>>53237666
The world would abandon us, if their job markets weren't built on fueling consumption & if the US wasn't their biggest buyer. Plus they have a huge amount of public & private dollar denominated debt, & will get sanctioned out of the global economy if they don't comply with the US's wishes. That or we pull a Bush & invade in the name of 'freedom'. This all started when the world decided to go on a iou system. A dollar-standard backed by gold. The US printed the ious (dollars), thereby encouraging debt, then defaulted by refusing to redeem them in gold. Leaving the world stuck in dollar-denominated debt & addicted to cheap credit to prop up their zombie markets. Combine that with the tyrannical petro-dollar system & it's clear why there's so much 'demand' for the dollar.
It's a global monetary order that should break down. Since it's conception real wages have comparatively stagnated, productivity has worsened, & the only way out of further global deterioration is to swallow the painful medicine of a credit crunch & freer markets. The longer we wait, the harder it will be to correct these malinvestments & put us on a better path.

[Anonymous No.53237691]

>>53237619
MMT is the truth, but it's a truth that destroys governments. It is true that the government creates demand for its currency via the obligation to pay taxes (among other things; the tax-model ignores the moneyness of bonds for international liquidity, etc.), and it is true that governments can print an arbitrary amount of currency.
But once they realize that, they've signed their death warrants, but it's the equivalent of giving a meth addict a magical meth pipe that never runs out.
I also agree with you that low interest rates lower the ROI of capital, since there's less of a hurdle any company has to clear to remain solvent. In practice, these companies don't even have to be profitable; they just have to have liquidity to keep rolling their debt, thus introducing a direct connection between interest rates and solvency in the overall economy.

[Anonymous No.53237709]

>>53237619
>>53237648
>>53237666
>>53237685
Good posts, anon, though you go over a lot very tersely.

[Anonymous No.53237805]

>>53237619
I'd add that monetary expansion via credit is not inherently bad. If you project that, say, you can grow the economy by 20%, then such a growth will have synergistic effects, since everyone in the economy will reap the fruits of the growth in the form of being able to buy cars, use new software, or whatever else was invested in. The lenders and borrowers consume a disproportionate amount of the new slice of the pie due to inflation brought on by the increase in the money supply, but we can treat that as the premium for taking on the operational risk of actually trying to produce something.
When the pie is projected to shrink, credit just produces inflation and gives people to purchase assets with printed money. The relationship isn't quite as simple, in reality: what matters is not by how much the overall pie of the economy will shrink, but the slice for which credit is being provided, e.g. the automotive sector. If nothing useful is being done by the credit, it's just theft via inflation.