Modern Money & Public Purpose 2: Governments Are Not Households

The Columbia Pre-Law Society Proudly Presents:

GOVERNMENTS ARE NOT HOUSEHOLDS: Implications Of Monetary Sovereignty & Stock-Flow Consistent Accounting

Moderator: Thomas Edsall, Joseph Pulitzer II and Edith Pulitzer Moore Professor of Journalism, Columbia University

Speaker 1: Warren Mosler, President, Valance Co., Inc.

Speaker 2: Stephanie Kelton, Associate Professor of Economics, University of Missouri-Kansas City

Part of the 2012-2013 Seminar Series on Contemporary Issues in Law and Political Economics organized by the Workers' Rights Student Coalition

http://www.modernmoneyandpublicpurpos...

Tuesday, September 25, 2012

This seminar will examine the legal and institutional structure of the current global monetary system, with a particular emphasis on the economic freedoms afforded to nations such as the U.S., U.K., Japan, Canada and Australia that use a non-convertible fiat currency with a floating exchange rate. Questions to be addressed include:

How does a fiat currency with a floating exchange rate differ from other types of currencies?

How does government spending and taxation work?

Why is accounting important for understanding the economy?

How can monetarily sovereign nations address their current economic problems?

SPEAKER BIOS

Stephanie Kelton, Ph.D. is Associate Professor of Economics and Chair of the Economics Department at the University of Missouri-Kansas City, Research Scholar at The Levy Economics Institute and Director of Graduate Student Research at the Center for Full Employment and Price Stability. Her research interests include monetary theory, fiscal policy, Federal Reserve operations, international finance and employment policy. Dr. Kelton can be followed on Twitter @deifictowl as well as at the blog New Economic Perspectives, which she created and currently edits.

Warren Mosler is the President of Valance Co, Inc., and Senior Financial Advisor to Senator Ronald E. Russell, President of the 29th Legislature of the U.S. Virgin Islands. He is the founder and current manager of the III Funds, which peaked at over $5 billion AUM in 2007 and currently manages about $1.5 billion, as well as the Founder and President of Mosler Automotive, which manufactures the MT900 sports car in Riviera Beach, Florida. Mr. Mosler has written a number of academic papers on issues relating to macroeconomics and monetary policy, and is the author of Seven Deadly Innocent Frauds of Economic Policy (2010). He maintains a personal blog, moslereconomics.com, and can be followed on Twitter @wbmosler.

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[ModMonPubPurpose]

Next seminar on the Eurozone is now up!

[ModMonPubPurpose]

@Bosniake

[Bosniake]

Goverments are not households?? So they can borrow to enternity....The usuel MMT bullshit.

[ModMonPubPurpose]

If you're going to take the time to post a comment on youtube, it is worth actually watching what you're commenting on. No one in any of these seminars suggested they can "borrow to eternity" - indeed, the fact you referred to it as "borrowing" suggests you don't understand what you are talking about. The federal government does not "borrow" $US, it creates $US. Treasury bond-issuance is an interest-rate maintenance tool, not a financing tool.

[DethFiesta]

Not because you disagree, but because of the way you disagreed. At these higher levels of discussion adults are generally courteous to each other, even in disagreement. And besides, you clearly did not watch the video because your criticisms don't deal with what is being discussed in any serious way. You are reciting dogma and issuing put-downs: classic Troll behavior.

[nmreich]

And if I may add, it seems to me that all this tinkering reminds me of the former Soviet days where the Central Planners decided every thing.

What's so wrong with laissez faire free market capitalism - that is one system that we haven't tried yet.

The reason why people are afraid of free market capitalism is:

1. People erroneously think that our current system in America is free market capitalism

2. Free market capitalism reduces the need for government and ECONOMISTS. They will be jobless.

[nmreich]

Watch this short video as a rebuttal: watch?v=Njp8bKpi-vg

Japan is currently experimenting in the way Mosler & Kelton are suggesting... BOJ is buying bonds "BOJ OFFERS TO BUY 600B YEN IN 5-10YR GOVT DEBT" and guess what is happening? INTEREST RATES ARE RISING NOT FALLING....

Why? Because nobody wants to hold YEN denominated debt instruments. So now they are fast approaching the Keynesian End Game where nothing they do can stop the free market from correcting their Keynesian mistakes. USA SOON

[mist42nz]

Because you say things like "non stagnant" but do you mean it should be dropping? Should the incomes be dropping?? Why use such an inaccurate term if you don't mean it should down as well? Is it because saying the problem exists because the market isn't always and continuously in bull mode sounds wrong even to you???

[mist42nz]

Each increase in income for the same work devalues all existing holdings. The system is already lossy with tax and other overheads. The money printed being backed by future earnings of borrowers...which your 'non stagnant' ie ever increasing, incomes is already devaluing. It's a death spiral.

[mist42nz]

Greece etc didn't have sovereign currency, but places like Zimbabwe did. You keep trying to back the dogma but the dogma is built on false premise, and popularized by self interested groups. Which is why each 'cure' is making the problem worse. And stagnant incomes?? For crying out loud, you think it can just keep increasing in real terms exponentially? The mathematics doesnt add up, let alone the economic reality.

[sail2byzantium]

Compared to the 34 OECD countries, US taxes are quite low (31st place). A KPMG survey of 114 countries places us 55th (See The Atlantic, Jan. 14 2013: "How Low Are U.S. Taxes Compared to Other Countries?"). It is not the taxes per se, but the 4 decades of stagnant incomes of the majority of the nation that’s the problem, including unfair policies where aristocratic non-laboring income (interest, rents) is taxed much lower than laboring income.

[sail2byzantium]

You know of fiat currency but state creation of money is a myth? A contradiction? Sovereign govts not only create fiat currencies from nothing, we also want them to provide services. If more (e.g. Scandinavia), then higher taxes, if less (e.g. the US), then lower. Taxation is a needed check on private purchasing power so gov’t and private sector buying of goods and services together don’t overheat the economy. It doesn't follow that they must be low just because govts can issue currency.