BMS ep 128: Narration of My MMT Review
I read my recent review of Kelton’s new book, if you prefer audio.
BMS ep 127: Michael Hardin on Sacrifice vs. the Gospel of Peace
Audio here, video below. A provocative discussion.
BMS ep. 126: Keith Knight Interviews Me on Krugman’s New Book
Keith really dug in and had some good questions. Audio here, video below.
Potpourri
==> Scott Sumner nails it: It’s my fault the Fed has been engaged in tight money, and the coming socialism is also my bad.
==> SlateStarCodex has been taken down, because the NYT was going to report the blogger’s full name. This is a complex issue. I’m sure the outcome is crazy, but I don’t know exactly what to blame.
==> Regarding MMT, the issue of, “Can the Treasury bounce a check?” is more nuanced than I originally could find in my research. Check out this post from Selgin on it.
MMT Disputes
Regarding my recent review of Kelton’s MMT book, Transformer here in the comments writes:
I just realized that the disconnect is that Bob is interpreting the phrase ‘how many dollars the federal government has added to people’s pockets without subtracting (taxing) them away’ in a way different to what (I think) Kelton intended.
I believe that Kelton intends it to mean ‘net dollars created via deficits at any point in the past irrespective if they were subsequently swapped for bonds’ .
But Bob interprets it as “dollars currently in existence’ . That is why Bob talks about ‘the outstanding Treasury securities [] sitting on the Fed’s balance sheet’ as that would indeed match that definition.
Yes, that’s exactly what’s going on. I have two defenses of my interpretation of what I originally took Kelton to be saying.
- Under the more moderate approach, we could say the same thing about a corporation as we’re saying about the US Treasury. E.g. “the current stock of debt owed by Google indicates how many dollars Google spent into The-Rest-of-the-World over and above how many dollars Google withdrew from The-Rest-of-the-World.” The accounting works the same way, at least ex post.
2. Just in terms of plain English, Kelton’s formulation is very confusing. I’m trying to think of a good analogy from a non-financial context. Does this help? “The amount of toast produced by the cook is a record of how many pieces of bread the cook put into the toaster without taking them out.”
Bob Murphy Show ep. 125: Matt Machaj on Structure of Production and Star Wars
Matt has two books on these topics, so we split the video up into two segments. The full audio interview is here.
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