Monday, July 22, 2019

MMT Policy is a Ponzi Scheme

MMT is a free lunch program for the Oligarchy. Financial wealth and public debt grow in lockstep and the fabulous financial wealth in the USA is roughly equal to humongous public debt ($22 trillion and counting). The Profit Law explains how billionaires are able to accumulate that much money and why they can buy all the bonds the Treasury issues and cash in the ultra-safe interest that is reliably taxed from WeThePeople as long as the debt is rolled over. This can function for a very long time but eventually ― well beyond the time horizon of MMTers and their gullible audience ― the economy breaks down. This is not a risk but a mathematical certainty.#2 MMT policy is a Ponzi scheme that works only as long as public debt grows. But infinite growth is impossible on a finite planet. The risks explode as soon as debt growth slows down or reverses as it eventually must. The so-called free-market economy lives literally on borrowed time.
https://axecorg.blogspot.com/2019/07/bill-mitchell-wall-streets-hitman-keeps.html

I fully agree with the above statements, but I have a question.  Why is infinite growth impossible?  Why can't we go from $100 trillion in debt to $1 quadrillion and then keep adding zeros?  Maybe it is because the debt keeps going up but it represents real claims on real resources and the real resources are limited.  That is where we get inflation, but even with inflation resources don't respond to the price signals so we get more inflation which would then lead to hyperinflation. I could see that scenario, but we are a long,long ways away from inflation.  So would it be possible to try MMT for a short period of time and then stop it once inflation starts to pick up?  Or is it impossible to stop once it starts, like a snowball causing an avalanche?  That is probably the situation, but the tipping point seems pretty far out.  The "borrowed time" could be 50 years or more out.

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