Ready for More Subsidies

Amtrak has kicked off a “ready-to-build” campaign, making it clear that the money-losing company faces close to $30 billion in major infrastructure projects in the Northeast Corridor on top of the corridor’s $11 billion “basic infrastructure backlog,” meaning tracks, signals, and power facilities. In addition to the $20 billion Hudson River tunnels project, Amtrak wants to spend $5 billion on a new tunnel under Baltimore, $1.7 billion on a new Susquehanna River bridge, $1.5 billion on another new bridge in New Jersey, and unspecified billions more for building or rebuilding train stations in New York (which alone is costing more than $2 billion), Philadelphia, Baltimore, and Washington.

 

In short, taxpayers are looking at a bill of well over $40 billion just to keep the supposedly profitable Northeast Corridor running. Amtrak must believe that “ready to build” sounds like a more positive message than “we need at least $40 billion just to keep the wheels turning.” No doubt Amtrak is relying on the image it has create that its Northeast Corridor trains make money, when in fact they merely cover operating costs, not the costs of maintenance or depreciation. Adding maintenance and depreciation not only eliminates profits, it brings subsidies to at least 10 cents per passenger mile–and that’s before counting the $40 billion or so needed to bring the corridor up to a state of good repair.

 

Amtrak divides its operations into three categories: the Northeast Corridor, state-supported day trains, and overnight long-distance trains. In addition to claiming that the Northeast Corridor makes money, Amtrak strongly implies that subsidies to the day trains are entirely covered by the states, leaving only the long-distance trains requiring federal subsidies. In fact, before adding depreciation and maintenance, federal taxpayers fund more than 20 percent of the subsidies to the day trains, and after depreciation and maintenance, it is more than half.

 

Perhaps because it believed Amtrak’s hype about Northeast Corridor and state-supported trains, the Trump administration proposed to end funding to Amtrak’s overnight trains. This was a mistake, but not for the reasons presented by the National Association of Railroad Passengers (NARP). Operating those long-distance trains cost taxpayers close to half a billion dollars a year (see p. C-1), and this doesn’t count depreciation on capital costs or maintenance.

 

NARP argues that, if the trains stopped running, “144 million American taxpayers — that’s 45% of our population — living in 220 communities would lose access to passenger rail service.” Transportation Today interprets this to mean that “cutting Amtrak would negatively affect nearly half of all Americans.” But how can people be negatively affected by cutting a service they don’t use? In Amtrak’s fiscal year 2016, long-distance trains carried fewer than 4.7 million trips (p. A-3.4). Assuming the average rider rode at least two legs (either a round trip or a one-way trip on two trains), that’s much less than 1 percent of all Americans, not “nearly half.”

 

NARP claims that Amtrak’s overnight trains produce all sorts of benefits that, in fact, are largely imaginary. Supposedly, employers and Millennials are more likely to locate in cities with Amtrak service. Yet Havre, Montana has had Amtrak service since the company began in 1971, yet its population has declined in every census since 1980. Meanwhile, Missoula and Bozeman, both of which lost Amtrak service in 1979, have seen their populations double since then. Their populations didn’t double because they lost Amtrak service, but the loss of service didn’t hurt them any.

 

NARP also points out that Amtrak provides jobs, employing more than 20,000 people. But jobs are a cost, not a benefit: the benefit is the income produced by those jobs. If nearly half of that income is the result of subsidies, as in Amtrak’s case, then it is a transfer payment, not a net social benefit.

NARP insists that all transportation is subsidized, so we should ignore the subsidies to Amtrak. “There is no transportation system in the world of any kind that pays for itself out of the fare box,” NARP quotes the former Amtrak board chair as saying. Tell that to America’s freight railroads, which get very little subsidy from anyone. For passenger service, consider the Atlantic City JitneysNew York Waterway, Puerto Rico’s Carros Públicos (which returned to service before the public transit after Hurricane Maria), all of which are private, unsubsidized operations in the United States.

 

Japan’s JR Central is unsubsidized in any way, as fares cover both operating and capital costs. Hong Kong’s transit system is also profitable.

 

In the United States, NARP correctly points out that highways and airlines are subsidized, but measured per passenger mile those subsidies are tiny compared with Amtrak’s. Federal, state, and local highway and airline subsidies average between 1 to 2 cents per passenger mile, while Amtrak’s state and federal subsidies average around 25 cents. Moreover, most highway and airline subsidies go to local roads and smaller airports; people driving on interstate highways or flying between major cities actually pay more highway or air travel taxes than the systems they use cost.

 

The Trump administration’s mistake was in targeting the long-distance trains to the exclusion of Amtrak’s other money-losing trains, which is all of them. By focusing on the overnight trains, the administration was as much engaged in as much central planning as those who propose to build high-speed rail in selected corridors at everyone else’s expense.

 

What the administration should have done, as the Antiplanner has suggested before, is to simply offer to pay Amtrak a fixed amount for every passenger mile it carries. Federal subsidies to Amtrak currently average more than 20 cents per passenger mile. Trump should propose to pay Amtrak 10 cents for each passenger mile it carries, which Amtrak could spend on capital and operating costs of any route. This would give Amtrak incentives to cut costs and emphasize trains that carry the most passenger miles, while giving states incentives to increase their subsidies if they believe Amtrak service is so vital to their economies. After taking those steps, it should be up to Amtrak, not politicians, to decide what routes to keep and which ones were not viable.

 

Politically, offering Amtrak a fixed subsidy per passenger mile also changes the debate. The proposal to cut long-distance trains would eliminate service from about half the states that have Amtrak service, potentially raising the ire of 46 senators and 180 representatives. A proposal to offer a specific subsidy turns the debate from “where should Amtrak trains go?” to “how big a subsidy should Amtrak riders get?” That could potentially expand the debate to subsidies to other forms of travel as well.

 

Ultimately, the federal government should phase out subsidies to all forms of transportation. As the most heavily subsidized, transit is the place to start, followed by Amtrak. For fiscal year 2019, Trump should propose a fixed subsidy to both kinds of transportation. If passed, that subsidy could be gradually reduced over time along with subsidies to roads and airports.

Comments

John G Added Oct 6, 2017 - 3:15pm
(Federal) taxes pay for nothing. Government spending is private sector income and creates the money that pays the taxes.
wsucram15 Added Oct 6, 2017 - 6:06pm
But where would our money go? Bombs and guns?
John G Added Oct 6, 2017 - 6:11pm
Ultimately, the federal government should phase out subsidies to all forms of transportation. 
Why?
Rusty Smith Added Oct 6, 2017 - 8:32pm
Very nice article Antiplanner, I'm glad someone else understands how much tax money it takes to keep most forms of "public transportation" running.  NONE break even with the fares they charge customers, and it's doubtful most come close to being worth what taxpayers have to spend to build, maintain and subsidize them.  
 
For most big cities their transportation is an even bigger money pit than they imagine because it's ability to provide subsidized transportation to people who can't afford their own transportation often attracts the poorest of the poor to those cities with the highest subsidies.  Then those cities get hit with a tremendous increase in social service costs because those types of people also can't afford to pay for any of the other stuff they consume, like free medical care.
George N Romey Added Oct 6, 2017 - 9:51pm
Jeanne you’ve got that right. China has bullet trains we’ve got the Canon Ball Express from Petticoat Junction. And we wonder if the US is on the decline.
John G Added Oct 7, 2017 - 3:38am
Smith: Very nice article Antiplanner, I'm glad someone else understands how much tax money it takes to keep most forms of "public transportation" running.  
How do tax payers produce this 'tax money'?
Saint George Added Oct 7, 2017 - 4:39am
Government spending is private sector income and creates the money that pays the taxes.
 
Another Modern Monetary Theory Moron.
 
It's a fringe theory — the Scientology of macroeconomics — with little support by anyone, including other macroeconomists.
 
Skiddy-g is simply a cult member, endlessly repeating his mantra. He's stuck on stupid.
Saint George Added Oct 7, 2017 - 4:40am
China has bullet trains we’ve got the Canon Ball Express from Petticoat Junction. And we wonder if the US is on the decline.
 
You're too easily impressed and always by the wrong things.
John G Added Oct 7, 2017 - 4:43am
Oh good god, scat boy and his obsession with human faeces is back to misinform.
Saint George Added Oct 7, 2017 - 4:57am
It's not obsession; it's association: I read one of your posts and I automatically associate it with shit.
MJ Added Oct 7, 2017 - 11:27am
You should invite China to build a rapid rail link all over the  US--Amtrak is far too slow for the times we are living in---so old fashion!
Jeff Jackson Added Oct 7, 2017 - 11:31am
Think of all the subsidies the airlines get. Do you really think what they pay for airports, runways, air traffic controllers and such is the real cost? Airlines are subsidized drastically as well. Amtrak has never made money, that it needs more is no surprise at all.
Dino Manalis Added Oct 7, 2017 - 12:02pm
We need bullet trains along the East Coast and it should be funded privately by companies to complete the works sooner and more cheaply for taxpayers.  Eventually, high-speed trains should be available across America!  Traveling at high speed would increase job opportunities; workers; and customers over a wider geographical area.
Katharine Otto Added Oct 7, 2017 - 12:06pm
Antiplanner,
First, I'm a big fan of passenger rail, especially for long distances.  I've preferred trains over other forms of transportation wherever they are available and have traveled Amtrak here in the US.
 
An important fact is that the rail infrastructure is owned by the private freight companies, but the highway system is owned and maintained by federal, state, and local governments.  Because of this, passenger trains must defer to freight trains on the rails.  Also, because Amtrak--which became an "independent" entity in the 1970s--has a monopoly on passenger rail, there is no room for competition.
 
Before Amtrak, there was daily rail service from Savannah to Atlanta, with trains returning in the evening.  Now, there is no passenger rail through the South.  You basically have to go through Chicago to get from Savannah to Dallas.  This is government-controlled transportation at its typical.
 
There are many ways passenger rail could be re-vitalized, including car-cars for long distance.  Speed rail is high-cost and low-yield, because of the necessary infrastructure changes, and the fact that all trains have to come to a complete stop to load and unload passengers.
 
No one except me thinks this is realistic, but I believe the rail lines should be eminent domained, and passengers given preference over freight.  If the government can eminent domain land for pipelines, it can certainly do it for the rail system, to bring it more in line with the highway system, in terms of cost and maintenance.  If the rails are publicly owned and maintained, private lease-holders could operate the trains themselves in different states or communities.
 
Finally, trains are the most energy-efficient transportation system we have, safer, and more conducive to socialization, relaxation, and enjoying passing scenery.
Katharine Otto Added Oct 7, 2017 - 12:10pm
By the way, these proposed expenditures along the northeast corridor are a good example of public-private control gone bananas.  If this were a purely private enterprise, they could not justify the costs.
Bill Kamps Added Oct 7, 2017 - 2:31pm
I agree to give them a fixed number of cents per passenger mile.  I dont mind government subsidizing things, I mind when Congress micro manages rail, air, and road transportation, outside of safety regulations which should be left to the appropriate agencies.  I mind when Congress micro manages the Post Office, etc.  All that Congress does it run up the cost, and decrease the quality of service.
John G Added Oct 7, 2017 - 3:32pm
Congress has micromanaged the Post Office into bankruptcy for private interests.
The Antiplanner Added Oct 7, 2017 - 4:12pm
Katherine,
 
I'm a big fan of passenger trains to: see my other web site. But trains aren't the most energy-efficient form of travel; buses are. Also, many cars are more efficient than the most efficient trains. 
 
John G asked why government should phase out all subsidies to transportation. One answer is that, once subsidies begin, they go to the politically powerful, not to whoever really needs them. The best thing government can do is create a level playing field. 
 
A 1958 Interstate Commerce Commission report called the Hosmer report concluded that passenger trains were no longer viable. It is sad, but I have to agree. We've seen all kinds of technology transitions in our lifetimes: typewriters to word processors, land lines to cell phones to smart phones; phonographs to CDs to internet music distribution. Some people might like to still type on an old typewriter or listen to music on vinyl, but they don't demand billion dollar government subsidies to support their preferences. For some reason, we've been able to let go of those other technologies, but not passenger trains. It is time to let go.
John G Added Oct 7, 2017 - 5:01pm
One answer is that, once subsidies begin, they go to the politically powerful, 
Not with a government owned entity though.
 
The Antiplanner Added Oct 7, 2017 - 7:53pm
John G,
 
Are you kidding? When Mike Mansfield was senior senator from Montana, he made sure Montana had two daily trains when some states had none. When Richard Byrd was senator from West Virginia, he made sure West Virginia had some of the best passenger service in the country, including the United Aircraft TurboTrain. The location of Amtrak routes has always been politicized.
John G Added Oct 7, 2017 - 7:57pm
You said the subsidies go to the politically powerful. What you're talking about is a politician effectively representing the interests of his electorate, surely?
Not the same thing at all.
The Antiplanner Added Oct 7, 2017 - 8:04pm
Read what you just wrote: "Politically powerful". . ."Politician"--what's the difference? If subsidies go mainly to states represented by politicians who are "most effective at representing their electorates," rather than where they are really needed, then most of them by any economic definition are wasted. (Though they aren't wasted in the sense that they help get politicians re-elected, I'm not interested in having my tax dollars support some distant politician's cling to power.)
John G Added Oct 7, 2017 - 8:16pm
You clearly implied that the spending i.e. actual money would accrue to politically powerful interests. 
But now you are saying that services are not being fairly distributed. I don't see that privatising the system would solve that problem. There is no market fairy.
There's no such thing as 'your tax dollars'. Taxes do not pay for government spending.
John G Added Oct 7, 2017 - 8:17pm
Like all successful advertising slogans, the phrase ‘tax-payer’s money’ invokes what psychologists call a schema…. a whole body of emotions, experiences and knowledge which mediate our response.
Hence, ‘Tax payer’s money’ is intended to create a direct link between government spending and the individual.  You are invited to visualise your hard-earned pennies being frittered away unwisely ……. which is hugely convenient for a politician intent on running down public services, so that they can be privatised.  Also implicit in the schema is the threat that if the government spends more, you’ll have to pay out, depleting even more of your income.
And like so much of neoliberal-speak, it is contaminated by deliberately confusing government spending with household spending.  The phrase ‘tax-payer’s money’ comes from the same stable as ‘maxing out the credit card’ or ‘mending the roof when the sun is shining’. It is bunkum.  Government is not like a household.
The Antiplanner Added Oct 7, 2017 - 11:22pm
It must be nice for you that you don't worry about your share of tax dollars being wasted when they go for pork barrel. I have enough of a conscience that I care about the effectiveness of both my tax dollars and taxes paid by other people, especially low-income people, since so many taxes end up going from the relatively worse-off to those relatively better-off.
John G Added Oct 7, 2017 - 11:33pm
There's no such thing as 'your tax dollars'. Tax doesn't go to anyone. It is merely cancelled government money.
If the government didn't spend it into existence, it wouldn't exist to pay the tax, would it?
The Antiplanner Added Oct 8, 2017 - 12:49am
I'm afraid you have a poor understanding of economics. If I produce something that someone is willing to pay me for, I've created value. If government taxes me and spends the money on something people aren't willing to pay for, government is destroying value. Societies succeed or fail by how much overall value they create. This doesn't mean government is always bad, but it is more likely to be bad than the market that you think is mythical.
John G Added Oct 8, 2017 - 1:13am
I'm afraid you have a poor understanding of economics.
I'm afraid you don't understand the monetary system.
John G Added Oct 8, 2017 - 1:16am
Or logical thinking.
Saint George Added Oct 8, 2017 - 1:40am
You're claiming that you understand (or practice) logical thinking? I don't think so, skid-mark. You're the most cognitively fucked up arse-wipe on this board.
Saint George Added Oct 8, 2017 - 1:43am
There's no such thing as 'your tax dollars'.
 
Completely wrong.
 
Tax doesn't go to anyone.
 
Nope. Wrong.
 
It is merely cancelled government money.
 
Only to Joe Government Bureaucrat; not to Mary Private Citizen. That you won't distinguish between private actor and public bureaucrat proves that you're pathetically ignorant.
John G Added Oct 8, 2017 - 1:52am
Go away scat boy.
John G Added Oct 8, 2017 - 3:31am
Federal 'tax dollars' do not exist. You do not fund the federal government. Your dollars do not go to the military, corporations nor welfare recipients.
Here are four fundamental things that you get in return for paying your federal taxes:
1.) A guarantee that you will not be pursued by the IRS, have your property seized, or be sent to prison by the federal government for not paying your taxes.

2.) The federal government provides you with a currency to use called 'the US dollar'.
3.) You get a market that produces goods and services, from which you can obtain the products that you need and desire using the US dollars that you've managed to obtain.
4.) You get a powerful, self-sufficient federal government that is not dependent upon private entities to fund it. It can never go broke because it is the dollar issuer, and so, it can fully provision itself with the goods and services that it needs to function as government at any point in time, by literally spending its own currency into existence at will to buy what it needs from the market.
Saint George Added Oct 8, 2017 - 8:24am
1.) A guarantee that you will not be pursued by the IRS, have your property seized, or be sent to prison by the federal government for not paying your taxes.
 
Wrong. You can STILL be pursued by the IRS and have your property seized even IF you have paid your taxes. You're not living in the real world.
 
2.) The federal government provides you with a currency to use called 'the US dollar'.
 
Wrong. Government didn't "provide" us with a currency. All it did was to declare all other currencies illegal, i.e., "not legal tender." That's not the same thing as benevolently "providing us with a currency." LOLzZ! You're such a knee-jerk Marxist zombie, it's kind of funny if it also weren't so pathetic.
 
A piece of paper called a "dollar" must already have some kind of value PRIOR to government telling everyone, "Use this to pay taxes with", otherwise no one would know how to price their own goods or services in terms of that piece of paper. Obviously, chucklehead, that piece of paper must have already had some sort of value in terms of some sort of commodity that people already valued (gold, silver, tobacco leaves, seashells, whatever). David Graeber won't save you on this, twit. No government anywhere can simply sashay into a private market and declare, "Here's a piece of paper with Good King NitWit's picture on it. We declare it's worth 10 Nits. Now go spend it and prosper — and don't forget to pay your taxes in it!"
 
3.) You get a market that produces goods and services,
 
Government doesn't give us markets. Markets are associations for the purpose of mutual benefits based on mutual contracts (explicit or implicit) between two or more people. A prison camp administered by government is not a "market", you dummy.
 
4.) You get a powerful, self-sufficient federal government
 
If it's "self sufficient" because it owns guns and has a monopoly on the printing presses, there's no point in requiring taxes. So it's not really "self sufficient". It's self-funding — it can print all the paper it wants and put on as much ink as it wants, and engrave as many zeroes to the right of a whole number as it wants . . . but that won't make it "self sufficient". Wanna know why, chuckle-knuckle-head? Because it can't produce anything, and even government bureaucrats have to eat, buy clothing, and tank up. So they still need the non-self-funding part of the economy — the private sector — to make stuff. So stop with the constant "Salam! Salam!" to government. You sound like a towel-headed communist zombie.
 
that is not dependent upon private entities to fund it.
 
Already answered above. It absolutely requires private entities to FEED and CLOTHE it. So paper money, per se, doesn't make it "self sufficient." Neither do guns. The guns, in fact, only ensure that it maintains its monopoly on money. If not for the guns, private entities wouldn't choose paper and ink as a medium of exchange.
 
It can never go broke
 
But it can starve. Because the real world of THINGS is a world of scarcity. And paper plus ink doesn't produce anything.
 
because it is the dollar issuer,
 
You mean, "because it has a coercive monopoly on the production of money." If a private citizen were to do the same thing, it would actually have exactly the same economic effect, but it would be defined legally — that is, for political purposes only — as the crime of "counterfeiting." Economically, there's no difference if Joe Private Citizen prints up a million dollars and spends it, or if Joe Public Official prints up a million dollars and spends it. 
 
it can fully provision itself with the goods and services that it needs to function as government at any point in time, by literally spending its own currency into existence at will to buy what it needs from the market.
 
Unfortunately for your kooky hypothesis, government cannot do these things without injurious consequences for the people who produce those goods and services, which means, it cannot do these things without ultimately injuring itself. Government spending is not dropped from helicopters and spread "evenly" over producers and consumers in the private sector; it's injected into the private sector at a specific point and for specific reasons, e.g., a billion dollars for defense in the tech sector. So tech sector people are the first to receive the new government spending; they in turn spend it (e.g., on more steak dinners) so the price of beef begins to rise; cattle farmers now have more money so they spend it on something, e.g., more trucks, so the price of cars begins to rise; etc. By the time it reaches
Saint George Added Oct 8, 2017 - 8:25am
Unfortunately for your kooky hypothesis, government cannot do these things without injurious consequences for the people who produce those goods and services, which means, it cannot do these things without ultimately injuring itself. Government spending is not dropped from helicopters and spread "evenly" over producers and consumers in the private sector; it's injected into the private sector at a specific point and for specific reasons, e.g., a billion dollars for defense in the tech sector. So tech sector people are the first to receive the new government spending; they in turn spend it (e.g., on more steak dinners) so the price of beef begins to rise; cattle farmers now have more money so they spend it on something, e.g., more trucks, so the price of cars begins to rise; etc. By the time it reaches the retiree on a fixed income in New Jersey, she's faced with higher prices for everything.
 
What you're omitting from your usual Marxist Monetary Tyranny mantra is the fact that government spending distorts the way different people in the private sector would have made decisions on spending/saving in the absence of that new spending, thus diverting resources into those new areas of spending (where prices are rising) and away from those areas they would normally have entered. The distortionary effect and "crowding out" effect of government spending have been well known and well understood for over a hundred years.
 
Read much? Guess not.
 
Your ignorance of basic economics is impressive, and your lack of talent in logical thinking, breathtaking.
John G Added Oct 8, 2017 - 2:43pm
Economic illiteracy.
Katharine Otto Added Oct 8, 2017 - 3:10pm
Antiplanner,
Thanks for your response.  I still say that if the rail lines were in the public sector, as the highways are, then rail would be more cost effective.  Buses depend on highways, as private automobiles do.  Also, Amtrak has a stranglehold on passenger rail, and while I can't prove it, I would contend it is busy running the system into the ground, as the USPS is doing to the postal service.  Your post about the northeast corridor affirms my belief that Amtrak is doing all it can do bankrupt itself, with the long-term plan to sell the northeast corridor for pennies to friends in the private sector.
 
I also believe rail could be profitable as a competitive private sector enterprise, if the tracks themselves are owned and maintained by the government(s).  Service between major cities, for instance, could be enjoyable, like a cruise.  The private sector can be much more flexible than government-controlled enterprises.
Katharine Otto Added Oct 8, 2017 - 3:14pm
John G.,
There is a difference between economics and the monetary system.  According to me, the "monetary system" is drowning in debt.  I agree with Antiplanner in that government destroys value by spending on things nobody wants.
John G Added Oct 8, 2017 - 3:43pm
KO: If you don't understand the monetary system you can't understand economics, particularly macro. Mainstream economists never study the monetary system and they believe falsehoods and myths about the banking system.
That's why they're always wrong about everything.
If the monetary system is 'drowning in debt' then it is also floating on credit. You can't have one without the other.
The statement by AP that you agree with is meaningless gibberish. It's nothing in the real world.
John G Added Oct 8, 2017 - 3:45pm
I also believe rail could be profitable as a competitive private sector enterprise, if the tracks themselves are owned and maintained by the government(s).  Service between major cities, for instance, could be enjoyable, like a cruise.  The private sector can be much more flexible than government-controlled enterprises.
Best get over to the UK to see how that worked out for them.
Saint George Added Oct 8, 2017 - 5:01pm
Economic illiteracy = Modern Monetary Theory cult members.
 
By the way, arse-wipe, even Warren Mosler understands and stresses the important difference between nominal wealth (numbers printed on pieces of paper that can be printed in any amount) and real wealth (food, clothing, shelter, medical supplies, mobile phones, computers, flat-screen TVs, automobiles, etc.). Mosler may be naïve and wrong about many other things in economics but at least he grasps the difference between a claim on real goods and the real goods themselves. You do not.
 
That's the reason you're a knuckle-headed chucklehead.
John G Added Oct 8, 2017 - 5:11pm
All you have is strawmen, inventions and outright lies.
Take your faeces fetish elsewhere.
John G Added Oct 8, 2017 - 5:25pm
the difference between a claim on real goods and the real goods themselves. You do not.
MMT is acutely aware of the distinction that you are attempting to describe. Far more so than any other strand of economic thought.
You're just a flat out liar, shit breath.
Saint George Added Oct 8, 2017 - 6:30pm
MMT is acutely aware of the distinction
 
But YOU are not, Venturist Church.
 
And you don't speak on behalf of "MMT" in general. You speak only for yourself, ignorant arse-wipe.
 
Mosler tacitly admitted to audience members during a discussion, that the only thing converting paper litter (e.g., his business card) into money is the fact that a friend of his with a gun is standing outside the only exit from the lecture room, and when someone wants to leave the room, he must exchange his labor, time, and productivity for that card in order to hand it to the guy with the gun; then he'd be permitted to leave the room. That's a prison system Mosler is advocating, not an economic one.
 
Additionally, Mosler admitted the only difference between Mr.-Joe-Private-Citizen printing up a million dollars in his basement and spending it on fast cars and loose women, and Mr.-Chucklehead-Public-Bureaucrat doing exactly the same thing, is that the latter has a monopoly on the initiation of gun-play to protect his printing presses while the former does not. That distinction is strictly political, not economic. As far as economics are concerned, when Joe-Private-Citizen prints up a million dollars and spends it, that's a million dollars in nominal wealth streamed into the economy. MMT-zombies would have to admit that "Joe-Private-Citizen's spending is everyone else's nominal income".
 
None of that alters the period-analysis of inflation, as it's injected into the economy at a specific point (e.g., Maserati car dealers and Elite Escort Services) and raises some prices, lower others, in ways that wouldn't have occurred in the absence of the injection. Aside from the fact that it's always the people on fixed incomes who ultimately subsidize everyone else's higher wages and salaries, the change in prices distorts investment decisions: obviously, investors will put their wealth into those areas in which they see prices rising and withdraw wealth from areas in which they see prices falling; yet those rises and falls were the result of Joe-Private-Citizen's paper-and-ink, and not the result of actual changes in productivity.
 
Significantly, Mosler also admitted that one of the great "benefits" of MMT is that it allows governments to finance their ability to make war, while a commodity-backed "fixed-exchange rate" currency allows private citizens to put a check on what their government can and cannot do (including, of course, making war). He favored the former and faulted the latter. In his view, it's good that government have unlimited financial means at its disposal to make war.
 
I'm not surprised at his views, given that he's a member in good standing of the super-elite 1% living in luxury in St. Croix, Virgin Islands.
 
I'm also not surprised that a power-lusting Marxist shill like you would admire him.
Saint George Added Oct 8, 2017 - 6:33pm
Far more so than any other strand of economic thought.
 
You're unacquainted with any strand of economic thought, including, by the way, MMT, which you advocate but misunderstand.
 
You're really just a dumb-arse shill.
John G Added Oct 8, 2017 - 6:37pm
MMT is the accurate description of the monetary system as it exists.
It is a lens, not an ideology.
And you are a shit mouthed liar with a faeces fetish.
 
Saint George Added Oct 8, 2017 - 6:59pm
MMT is the accurate description of the monetary system as it exists.
 
Nope. You're wrong. Even an articulate advocate like Warren Mosler admits that MMT is the system he DESIRES but not the actual system we have in place at the moment in the U.S.. That's why his lectures are so chock full of "policy prescriptions" that he would like implemented (e.g., elimination of "debt ceiling", etc., etc.). IF his policy changes WERE implemented, THEN MMT would describe the monetary system. IFF. That means MMT does not describe the system as it currently exists in the U.S.
 
Take your pin-head out of your arse and actually pay attention and listen to what someone like Mosler admits in his lectures and debates. You're only hearing what you want to hear and then regurgitating it.
John G Added Oct 8, 2017 - 7:17pm
Nope. You're wrong. Even an articulate advocate like Warren Mosler admits that MMT is the system he DESIRES but not the actual system we have in place at the moment in the U.S..
You're such a pathetic liar.
John G Added Oct 8, 2017 - 7:21pm
MMT is what is, not what might be
Posted on rel="bookmark"> by bill

One of the things I have noted with regularity is that readers and other second-generation Modern Monetary Theory (MMT) bloggers often fall into the error which we might characterise as the “When we have MMT things will be different” syndrome. Or the “we need to change to MMT principles to make things better” syndrome. Thinking that MMT constitutes a regime change is incorrect and steers one away from the core issues. In this blog, I reflect on that syndrome and some other aspects of the development of ideas, which I hope will provide readers with a clearer picture of what the core (early) MMT developers (Mosler, Bell/Kelton, Wray, Mitchell, Tcherneva, Fullwiler) had in mind when we set out in the early 1990s to construct a better way of doing macroeconomics. The point is that while MMT constitutes a regime change in economic thinking within the academy it does not constitute a regime change in the way the monetary system operates. We need to separate the operational principles exposed by MMT academics from their ideological values to really come to terms with the fact that MMT is what is, not what might be.
Saint George Added Oct 8, 2017 - 9:07pm
Thinking that MMT constitutes a regime change is incorrect
 
Not according to Mosler, who explicitly states that policy changes need to be implemented in order for MMT accurately to describe "the way things are." Pull you pin-head out of your arse, Venturist Church, and listen to what Mosler says; not what you think he says.
 
It's also amusing that a towel-head commie like you throws in with a super-elitist like Mosler: a guy who builds high-end racing cars and yachts in St. Croix.
 
Look up the word "hypocrite."
John G Added Oct 8, 2017 - 9:24pm
Not according to Mosler, who explicitly states that policy changes need to be implemented in order for MMT accurately to describe "the way things are."
 
You're just lying. You've probably been reading Robert Murphy's list of strawmen (again). You've never had an original thought in your life.
Saint George Added Oct 9, 2017 - 2:42am
You're just lying.
 
You're just in denial.
 
All you have to do, Venturist Church, is listen to what Mosler actually says, not what you think he says.
John G Added Oct 9, 2017 - 3:08am
You're just a faeces obsessed liar, scat boy.
Saint George Added Oct 9, 2017 - 5:29am
Not obsession, Venturist Church; just association. I read your posts and I think, "a chamber-pot of pure shit."
 
Mosler's monetary-crank scribblings have a similar stench; he's just more articulate and literate than you are. He asserts, for example, that, 
 
"Simply put, government deficits ADD to our savings (to the penny). This is an accounting fact, not theory or philosophy. There is no dispute."
 
(Heh, heh. Whenever anyone bangs his fist on the table shouting, "XYZ is true! There is NO dispute!" you can bet it's a hand-waving argument, because there is ALWAYS a dispute, even if you choose not to acknowledge it.)
 
Mosler continues:
 
"It is basic national income accounting. For example, if the government deficit last year was $1 trillion, it means that the net increase in savings of financial assets for everyone else combined was exactly, to the penny, $1 trillion. (For those who took some economics courses, you might remember that net savings of financial assets is held as some combination of actual cash, Treasury securities and member bank deposits at the Federal Reserve.) This is Economics 101 and first year money banking. It is beyond dispute. It’s an accounting identity."
 
Unfortunately, Mosler — who presumably took some economics courses, since he has an economics degree — is incorrect about his "accounting identity" (i.e., accounting tautology) because he is double counting. You cannot include Treasury securities along with cash when totaling "net savings" in the private sector.  It's very odd — downright weird — that Mosler does so. It's a bit like saying that if you buy a table for $100, that the table should be included in with your personal "net savings" because, heck after all, it was worth $100 (which is what you paid for it). But in fact, you exchanged $100 for something other than that $100; and the original owner of the table exchanged the table for something other than the table; your "net savings" decreased; his increased. If government were the owner of the table, you would pay government $100 in cash for a table, and government would now hold your $100 in cash. There are $100 fewer dollars in the private sector (though there is one more table in the private sector); so net savings decreased by $100; they didn't stay the same as before the exchange! You can't include the table in the total just because its price was $100. Yet that is what Mosler does with Treasury securities in that little throw-away line above. He's adding back into the private sector a Treasury security (qua exchange, no different from a table), when in fact, the value of the security is money removed from "net savings", not money included in it. Proof? Try this little experiment:
 
BEFORE BUYING A SECURITY FOR $100: take your hundred bucks and go to a local steak house and buy yourself a nice meal: I recommend starting with a vodka martini (Polish vodka, please), then a small appetizer; then the house filet mignon (garlic mashed potatoes, please). Dessert and espresso, a piacere as the Italians say. By all means, leave a generous tip . . . but don't spend more than $100 total.
 
Now, instead of buying that steak dinner, exchange the $100 for a Treasury security. Now,
 
AFTER BUYING A TREASURY SECURITY FOR $100:  take the Treasury security to your local fine steak house. Order a nice meal: vodka martini (Chopin Vodka, please; a hint of dry vermouth; olives). A delicate appetizer; filet mignon (rare, of course); garlic mashed potatoes; dessert (Tiramisu, perhaps?) double espresso. When the check arrives, reach into your blazer and instead of pulling out your wallet with cash or credit card, pull out the $100 Treasury security you just bought and try to pay for your dinner with it. First, the waiter will be flustered, but what does he know? He's never taken economics courses at University of Connecticut like Mosler. Then the manager will come by and say something like, "Regretfully, we cannot accept a $100 Treasury security in exchange for your meal. You need to give us cash or a credit card." To which you reply (innocently, of course): "You can't accept a Treasury security? But Warren Mosler said that Treasury securities are one of the financial assets that are part of 'net savings' in the private sector, along with cash and bank deposits! And Warren Mosler is a progressive MMTer who describes operational realities of finance!" To which the manager — and the kindly police officer whom he called — will lead you to the kitchen. "I understand, sir. You can discuss it with Jose as you and he wash dishes. By the way, Jose doesn't speak English, so he'll be
Saint George Added Oct 9, 2017 - 5:29am
Proof? Try this little experiment:
 
BEFORE BUYING A SECURITY FOR $100: take your hundred bucks and go to a local steak house and buy yourself a nice meal: I recommend starting with a vodka martini (Polish vodka, please), then a small appetizer; then the house filet mignon (garlic mashed potatoes, please). Dessert and espresso, a piacere as the Italians say. By all means, leave a generous tip . . . but don't spend more than $100 total.
 
Now, instead of buying that steak dinner, exchange the $100 for a Treasury security. Now,
 
AFTER BUYING A TREASURY SECURITY FOR $100:  take the Treasury security to your local fine steak house. Order a nice meal: vodka martini (Chopin Vodka, please; a hint of dry vermouth; olives). A delicate appetizer; filet mignon (rare, of course); garlic mashed potatoes; dessert (Tiramisu, perhaps?) double espresso. When the check arrives, reach into your blazer and instead of pulling out your wallet with cash or credit card, pull out the $100 Treasury security you just bought and try to pay for your dinner with it. First, the waiter will be flustered, but what does he know? He's never taken economics courses at University of Connecticut like Mosler. Then the manager will come by and say something like, "Regretfully, we cannot accept a $100 Treasury security in exchange for your meal. You need to give us cash or a credit card." To which you reply (innocently, of course): "You can't accept a Treasury security? But Warren Mosler said that Treasury securities are one of the financial assets that are part of 'net savings' in the private sector, along with cash and bank deposits! And Warren Mosler is a progressive MMTer who describes operational realities of finance!" To which the manager — and the kindly police officer whom he called — will lead you to the kitchen. "I understand, sir. You can discuss it with Jose as you and he wash dishes. By the way, Jose doesn't speak English, so he'll be very receptive to your kooky ideas."
 
Lots of other nincompoopery written by Mosler, but his double counting of Treasury securities is certainly one beautiful example.
 
And by the way, his mistake about Treasury securities being part of "some combination" along with cash and bank deposits has been pointed out to him by others with whom he's debated. He just chooses not to understand. He just wants to build rich-man's toys such as yachts, sports cars, work on his tan in Saint Croix, and pretend that scarcity of real goods is not a fact of reality.
John G Added Oct 9, 2017 - 4:13pm
Utterly clueless.
Saint George Added Oct 9, 2017 - 6:30pm
You mean, you can go to a restaurant and pay for your meal with a Treasury security instead of cash or credit card? Really? I don't think so. Therefore, Treasury securities cannot be part of private-sector "net savings." Mosler is wrong and you are wrong. Get over it, skid-mark-g.
John G Added Oct 9, 2017 - 9:15pm
Nope. He's absolutely correct, as you've acknowledged before when you claimed that MMT teaches you nothing new.
You want your cake and eat it. 
And you hold mutually exclusive beliefs simultaneously.
Dumb wingnut.
Saint George Added Oct 10, 2017 - 3:02am
MMT may or may not "teach us nothing new" arse-twit, but Mosler is certainly wrong about Treasury securities being part of "net savings" along with cash and bank deposits. Proof? Take your $100 Treasury security to a supermarket (you know, the kind that only exist in capitalist countries, not socialist ones) and try to exchange it for $100 worth of groceries at the checkout counter. Not liquid; not accepted; not part of "net savings." Mosler is wrong and you are wrong.
 
When you buy a Treasury security for $100, that $100 bucks has been removed (temporarily) from net savings. When the bond matures — or when you sell it earlier than the maturity date — it's added back in because you're exchanging it for cash . . . which you can then exchange for groceries.
 
I can understand Mosler not understanding this simple point: he took economics courses in college is therefore probably just confused. But you never did (that's obvious from your posts), so you should at least have an intuitive common sense grasp of economic activity like, duh, exchange (you know, buying stuff). Guess not.
 
Read much, by the way?
 
The only "truth" that MMT teaches is a true-ism: something that is both true and trite, and therefore, not worth spending lots of time discussing; viz., most governments have a monopoly on the use of their printing presses to create money. Mosler, et al., is obsessed by this idea. First he claims, "I'm not being ideological! I'm simply describing the 'operational realities' of today's monetary system, at least in the U.S. I don't even claim necessarily to approve of the system; I merely describe it . . . as well as its consequences!" Wrong. Mosler only claims that IFFFF we remove "self-imposed constraints" such as deficit ceilings (to take just one of his examples), THENNNNN we would have a true "Fiat Currency With a Floating Exchange Rate" and we could print all the money we wanted for any and all programs, and we could tax as much or as little as we pleased as a 'policy tool." 
 
Hey, arse-wipe, you dumb-shit flagrantly-phony-fuckall: the key words are "IFFFFF . . .THENNNNN". So Mosler admits that at the moment the US, in fact, does NOT have the kind of financial system "objective described" by MMT. Some "self-imposed restraints and constraints" would have to be abolished first for that to occur.
 
IFFFFF I didn't impose the constraint on myself of NOT robbing the neighborhood liquor store down the block to get some extra cash, THENNNN I could get all the cash I needed (from several liquor stores) and quickly pay off some of my credit card debt. Right. IFFFFF! (Hey, I'm not being ideological about "law n' order". I'm merely describing the "operation realities". I CHOOSE to be bound by the constraints of respect for someone else's private property, non-initiation of force, etc., but those are obviously "self-imposed restraints". Right. So are debt-ceilings.)
 
Sorry, douche-bag, but your hero is simply wrong. In fact, he's kind of a nitwit when it comes to that issue. Of course, you're a nitwit when it comes to every issue, so you're a far more impressive nitwit than he. Bravo! 
John G Added Oct 10, 2017 - 4:05am
Nope. He's absolutely 100% correct.
And you're a pathetic loser.
John G Added Oct 10, 2017 - 4:08am
Hey, arse-wipe, you dumb-shit flagrantly-phony-fuckall: 
 
Yeah, this is the stuff that will attract traffic. Doing a fine job, Petey.
John G Added Oct 10, 2017 - 5:28am
When you buy a Treasury security for $100, that $100 bucks has been removed (temporarily) from net savings. 
Utterly inane.
Saint George Added Oct 10, 2017 - 9:59pm
Nope. He's absolutely 100% correct.
 
Yep. He's absolutely 100% wrong. And so are you, chamberpot-breath.
 
When you buy a Stradivarius violin for US$200,000 from a private collector, YOU have the violin and HE has your cash. That's not an addition of $200,000 to 'net savings', it's just a redistribution from one person to another. It's known as a "purchase". Perhaps you've heard of it.
 
If the collector were a public sector bureaucrat, YOU would have the violin and HE would still have your cash, but now it would represent a subtraction of 'net savings' FROM the private sector and an addition TO the public sector.
 
Proof? Take the violin to a supermarket and try to buy groceries with it. Can't do it, right? RIGHT??? The checkout girl only accepts cash (or cash equivalent). A pricey violin is neither cash nor a cash equivalent. SAME WITH A TREASURY SECURITY YOU DUMB TURD.
 
Mosler is so fuckin' stupid it's hard to believe he actually explains his position in the following way:
 
1. If Joe buys 100 dollars of Treasury securities (T-bills, government bonds, etc), he now has $100 less cash, but 100 dollars more in Treasury securities so he is unchanged*.
 
2. The government then takes his 100 dollars and spends them, giving them to Bobby, who now has 100 new dollars. (the government now being in deficit 100 dollars).
 
3. The private sector now has a total of 200 dollars**, so 100 more than previously, equaling the government deficit.
 
*Wrong. Buying a T-bill for $100 is not functionally different from buying a sofa for $100: both might be "worth" $100 in some sense, but not in the sense that counts for your situation to be unchanged vis-a-vis cash: you cannot take your T-bill or your sofa to a supermarket and exchange it for $100 worth of groceries. So your situation is NOT unchanged; it's completely different. If you want to convert your T-Bill to cash, you either have to sell it or WAIT (i.e. defer your consumption to some future point in time) until it matures and THEN sell it; OR, you have to sell your sofa and get cash for it. Those are utterly different situations from having $100 in cash in your pocket and buying groceries with it.
 
**Just plain Kooky-Phunooky. If government spends Joe's original $100 on private citizen Bobby, then government was simply a middle-man between Joe and Bobby: Joe has a T-Bill and Bobby has Joe's $100. That's no different from Joe's having exchanged his $100 for a T-Bill, or a sofa, or a coffee table, etc. directly from Bobby, in which case, there's still only $100 in private sector 'net savings'. How Mosler comes up with the kooky notion that there are now $200 in private sector net savings is anyone's guess.
John G Added Oct 10, 2017 - 10:42pm
Violins aren't t-bills, shit breath. Manufactured goods or commodities are not credits. 
John G Added Oct 10, 2017 - 10:44pm
 How Mosler comes up with the kooky notion that there are now $200 in private sector net savings is anyone's guess.
Quite how you've come up with that bullshit is anyone's guess.
I'd guess that you're lying and/or completely stupid.
John G Added Oct 10, 2017 - 11:17pm
It's clear that you have absolutely no understanding of MMT (or any fiat currency system) at even the most basic level. 
Any criticism you make is rendered moot by that fact alone.
Not to mention that you're a compulsive liar.
Saint George Added Oct 11, 2017 - 8:19pm
And T-bills aren't part of 'net savings', dumbshit fecal breath.
 
It's because of such clueless statements which double-count Treasuries as part of 'net savings' (along with cash) that Mosler has the reputation of being a rich-boy-monetary-crank, as well as the reason that MMT will forever be a kooky fringe theory attractive to kooky cult wannabes like you.
 
Try taking a T-bill to a restaurant and buying a meal with it. Can't do it, right? But you can buy a meal with cash. Therefore, Treasuries are not the same as cash and cannot be a part of 'net savings' along with cash. It's clear you know nothing about economics or logical thinking.
 
No wonder you're a communist admirer of Arab terrorism. It's all beginning to make sense now: you're congenitally stupid and can't think straight.
John G Added Oct 11, 2017 - 10:40pm
And T-bills aren't part of 'net savings',
Clueless. Of course they are.
Try taking a T-bill to a restaurant and buying a meal with it.
So what? Try taking your bank CD to the same restaurant, smeg breath.
 
John G Added Oct 11, 2017 - 11:32pm
which double-count Treasuries as part of 'net savings' (along with cash)
No you're imagining things again. Or lying (yet again).
It's often the loudest whiners who understand the least.
Shit breath.
Saint George Added Oct 12, 2017 - 12:05am
It's often the loudest whiners who understand the least.
 
You're the only one who has whined loudly on this site, skid-mark. Ask Ms. Cote. ("Boo hoo! Sniffle, sniffle! You're the apple of her eye! Sniffle". Right. If I'm the apple of her eye, you must be the fly in her soup.)
 
As for a bank Certificate of Deposit, you're claiming a time-deposit is just as good as cash and is therefore part of "net savings"?
 
In that case, so is a vineyard. So is the office building someone owns. So is the Stradivarius. It can all be "converted" to cash over time. Does that mean it's "net savings"?
 
LOLzZz!
John G Added Oct 12, 2017 - 12:22am
As for a bank Certificate of Deposit, you're claiming a time-deposit is just as good as cash
Nope. You're a compulsive liar.
Saint George Added Oct 12, 2017 - 4:21am
Nope. You're a dumbshit zombunist. That's why you don't see it.
 
https://www.pragcap.com/modern-monetary-theory-mmt-critique/
 
“Net saving is net disposable income less final consumption expenditure.”¹

"MMT consistently uses the term in a different manner, however. They take the 3 sector model of the economy . . . and simplify it. Not to get too wonky, but here’s how they get there:
GDP = C + I + G + (X – M)
Where C = consumption, I = investment, G = government spending, X = exports & M = imports
Or stated differently;
GDP = C + S + T
Where C = consumption, S = saving, T = taxes
From there we can conclude:
C + S + T = GDP = C+ I + G + (X – M)
If rearranged we can see that these sectors must net to zero:
(I – S) + (G – T) + (X – M) = 0
If we rearrange the above sectoral balances equation we can arrive at a very important identity:
(S – I) = (G – T) + (X – M)
If you assume a closed economy you could say:
(S – I) = (G – T)
 
. . . the conclusion is simple – private sector net saving (S-I) is a function of the size of the government’s deficit which leads one to think that the private sector cannot save unless the government is in deficit. Except that (S-I) is not “net saving” in any traditional economic perspective. (S-I) is saving net of investment. It’s extremely misleading to define private sector “net saving” as (S-I) because Saving cannot identically equal (S-I) unless I is equal to zero. Given that investment is the most important piece of Keynesian economics and the economy, it’s preposterous to present the economy in this manner because investment adds to private sector saving.
 
To be clear about this, the private sector’s strength does not come from the size of the government’s deficit. It comes from the productive output of its own INTRA-SECTOR claims. For instance, pull up the Fed’s Flow of Funds report. You’ll notice that households have a large financial and non-financial asset claim against other sectors (primarily the corporate sector). The fact that the financial asset claims net to zero inside the private sector is meaningless. It’s like saying that balance sheets balance (well, duh). The key point is, private sector net saving is comprised of a huge component of non-financial assets (like houses) as well as financial claims against the corporate sector (as well as other sectors). These assets only net to zero if you ignore non-financial assets (pretty sure no one ignores non-financial assets like houses after the housing crisis) or view shareholder’s equity as being a net negative for the economy (which is utterly ridiculous given that shareholder’s equity reflects the strength and quality of the private sector’s output). After all, if I walked into a bank for a loan the bank wouldn’t turn me away saying “sorry pal, but your assets are netted against a corporation so we can’t make a new loan to you”. That’s just not how the economy works in any realistic sense.
 
The MMT definition of “net saving” gives the reader an unbalanced and unrealistic understanding of private sector saving. To be blunt, it is a useless definition and it should not be used. But MMT does not care about that. MMT wants to emphasize the importance of the budget deficit at all times. They want you to think that the private sector cannot flourish unless the government is constantly feeding it and supporting it with what they call “net financial assets”. As if it is impossible for the private sector to be stable without a large and sustained budget deficit. Yes, that theory works great except in the case of every hyperinflation or socialist run regime where these “net financial assets” significantly contribute to private sector instability.
 
In addition to assuming that a small budget deficit or surplus is necessarily bad, this ill-defined term leads to even larger errors. For instance, it leads the reader to believe that Monetary Policy is ineffective because it cannot impact the “net saving” (as defined by MMT) of the private sector through their lens. But this is completely wrong. If you use the Fed Flow of Funds report and a traditional definition of net saving then it becomes clear that Fed policy, interest rate changes and QE can have substantial impacts on the valuation of private sector net saving. As I’ve stated before, QE1 was essentially a form of fiscal policy because it increased the valuations of private sector financial assets by bolstering the financial system. But if you defined “net saving” as (S-I) you would never see it that way."
 
[END EXCERPT] (Much more at the link pos
Saint George Added Oct 12, 2017 - 4:22am
[END EXCERPT] (Much more at the link posted above.)
 
Treasury securities are investments — they're part of "I" in MMT's accounting identity — they're a loan that a private individual makes to government in return for a piece of paper with the equivalent of the letters "IOU" on it. Government will spend Private Citizen's loan back into the economy (private sector or public sector) and whoever gets that money now has Private Citizen's original loan; but Mosler is kooky-phunooky to add together both the original loan amount and the IOU, and count them as if they're the same kind of thing. WRONG!
John G Added Oct 12, 2017 - 4:46am
You're not going to get where you want to go by quoting Cullen Roche, dick head.
Treasuries are not investments. Period.
John G Added Oct 12, 2017 - 4:51am
Treasuries are savings. Period. 
Reserves are swapped for treasuries (a ledger transfer) and when the treasuries mature they are returned (by ledger transfer) to reserves.
That's it.
That's how government debt gets 'repaid'. 
No new money created, no 'printing!!!!!!! money', no nothing.
Just a ledger transfer.
Saint George Added Oct 12, 2017 - 6:09pm
Treasuries are savings. Period. 
 
Mosler is wrong. Period.
You're a loaf of rat-turd. Period.
There. Fixed it.
Saint George Added Oct 12, 2017 - 6:11pm
You're not going to get where you want to go by quoting Cullen Roche, dick head.
 
You're not going to get anywhere quoting Mosler, Wray, Kelton, Marx, or any "indy" fake-news site, rat-turd.
John G Added Oct 12, 2017 - 8:04pm
Idiot. Cullen Roche believes what you don't.
You don't know what you're talking about so you're casting about for critiques.
So far you've cut and pasted Murphy, Krugman, Palley and now Roche.
 
You think I don't know that you don't know what you're talking about and are copying shit from elsewhere? And do you think I haven't seen all this shit before?
The first three have only strawman arguments. Cullen Roche's critiques are not based on the operational level but on a political basis and more to do with his business than any real MMT analysis.
Arse breath. Krugman is much more your level than Roche.
Saint George Added Oct 12, 2017 - 8:27pm
More sophistry from a smegma-anointed loaf of rat-turd. If you can't answer any of the critiques of Marxist Monetary Tyranny, skid-mark-g, then go away and cry into your underwear.
 
(Pssssttt! An IOU for $100 cash is not the same as $100 cash and cannot be added back into "net savings" — a concept which, I agree, is seriously misunderstood by Mosler, et al.)
John G Added Oct 12, 2017 - 8:46pm
Treasuries are private sector savings. You have no argument.
Saint George Added Oct 12, 2017 - 8:53pm
Treasuries are private sector savings. You have no argument.
 
Ridiculous and wrong. You have no response. (Neither does rich-boy 1%-er Mosler.)
John G Added Oct 12, 2017 - 9:05pm
No one is adding anything back to anything. You're just talking bullshit again.
As a strawman it's pretty shit one.
Treasuries are bought with $ i.e. private sector financial assets.
It's a ledger transfer is all.
It's not hard to understand if you haven't been brainwashed with Austrian School quackery.
Saint George Added Oct 12, 2017 - 9:25pm
No one is adding anything back to anything.
 
Mosler said otherwise. He claimed that when you lend government $100 in exchange for its IOU (a/k/a Treasury security), government then spends that $100 on someone else in the private sector, so now there must be $200 in the private sector: the 2nd person's $100 and your IOU. That's what he wrote, rat-turd. Now go fuck yourself.
John G Added Oct 12, 2017 - 9:39pm
Mosler said otherwise. He claimed that when you lend government $100 in exchange for its IOU (a/k/a Treasury security), government then spends that $100 on someone else in the private sector, 
No he didn't.
You're a fucking nut job or a liar or both.
A $ is government IOU as is a treasury. You can only buy treasuries with government $ numb nuts.
It's a ledger transfer from reserves to treasuries. Different columns on the government ledger of $ (government liabilities) spent into existence by the government.
Saint George Added Oct 12, 2017 - 11:53pm
A $ is government IOU as is a treasury
 
Obviously not, dumbshit, otherwise private citizens wouldn't choose to exchange the former for the latter. They're obviously categorically different.
 
The problem here is that you understand neither basic economics nor basic MMT.
Saint George Added Oct 13, 2017 - 12:00am
https://www.researchgate.net/scientific-contributions/2010726586_Brett_Fiebiger
 
Abstract: This working paper presents a debate, which begins with Bret Fiebiger arguing that the approach to monetary and financial macroeconomics which terms itself "modern monetary theory” does not have sound analytic foundations and is of little relevance empirically.
 
 
"This paper argues that Modern Money Theory, known also as neo-Chartalism, does not describe the modern monetary system. Instead, its proponents typically describe a system that resembles US colonies in the 1690s, and switch occasionally to the 1940s. Modern money theorists seem unaware that they forward opposing theories and that neither version has much empirical relevance. The 1690s version inverts fiscal policy by supposing that Treasury spending is financed by ex ante money creation in place of the ex post collection of fiscal receipts. The paper argues that the ‘Treasury spending equals money creation’ storyline requires highly-implausible assumptions; specifically, either that the Treasury’s account at the central bank is not debited when it spends or that in expending deposits the laws of mathematics no longer apply (i.e. one credit to private accounts plus one debit to the Treasury’s accounts equals money creation < 0). The paper concludes that modern money theory does not offer a viable alternative to fiscal austerity and suggests consideration of narrow banking a la Minsky (1994)."
John G Added Oct 13, 2017 - 12:30am
LOLz.
You're grasping at straws, scat boy.
Treasuries are government IOUs like $. 
Which your man Fiebiger seems to have trouble with as well.
So he doesn't understand the mechanics of the system either.
John G Added Oct 13, 2017 - 12:33am
They're obviously categorically different.
They pay interest and they are risk free. Keeping your $ in a bank means you are subject to the bank's solvency as a creditor.
You don't know much do you, shit breath?
John G Added Oct 13, 2017 - 3:50am
Show me the quote of Mosler saying what you claim he said.
 
John G Added Oct 14, 2017 - 12:28am
Thought not.