Good stuff. I am probably half-way to digesting this as viewing the Government outside the microeconomic view of "the firm" will make my monkey brain explode.
Yes, but also, printing money does not have to be paid back, whereas government debt does so even if you can print money to pay the debt back there is an obligation to make a future payment with government debt. There is no obligation to print money, so debt is different to money printing or QE.
Thanks for giving it a try. A lot of folks have real trouble with this because we are so used to thinking of the Treasury borrowing whenever they spend in deficit. But in reality the government always money finances its expenditures, i.e., they print what they need but don't have. Only after they have already printed do they issue bonds in the amount printed. And that is not nearly so bad as people think. Of course too much can be printed, but so can too little!, and that's where most folks stuck in the "Austrian School" of economics have real trouble. There is a large body of economics literature on this subject, but it is only within the last few years it has started to penetrate mainstream economics. The concept of public Debt is a powerful political device. But that's as far as it goes. It has nothing to do with reality, at least not where the United States is concerned. Deficits are real, U.S. public debt is not.
It does, and it's no problem at all. We just print what we need that we don't already have any time we want to buy back our bonds. If we want to, we could buy back all the trillions of dollars of bonds out there in relatively short order, but opinions very on what the result would be. Japan recently bought back ~50% of their so-called debt. The concept of debt would not exist for you if you had a money machine in your basement. Think about it. The first thing to get right when trying to understand anything is to call things by their right name.
I don't know what you mean by the second degree of separation, but please don't feel obligated to explain. I'm fine with things as they are. There is a guy here that used to trade bonds for a bank, that means, i would think, that he dealt regularly with the fed. He wouldn't have to know anything at all about what i have been posting on in this forum and he could still be a fine bond trader. He, of course thinks I'm absolutely nuts! He hasn't keep up with money theory that's all. Why would he? He doesn't need to. Most economists who do understand this stuff won't be so bold as to come right out and say, "The U.S. Has no debt," because they know the raised eyebrows they'll be subjected to, so they find other ways to say the same thing. In fact, there is really nothing too wrong with referring to Treasuries as debt so long as you realize its very different from private debt, it's impossible for the U.S. to go bankrupt, and the U.S. can buy back its "debt", in any amount, any time it wants to. What we call debt is actually a tool of the central bank. The way the government puts more "outside" money in the form of reserves into the economy is either by buying it's debt or spending in deficit. The former is a tool of the Central Bank, the latter is a Congressional tool that the fed must accommodate.
I always get the impression with MMT that there is a sting in its claims or perhaps a lack of disclosure. Yes we can just print more money, yes the government can have more debt, yes there is no limit to this. But we didn't mention that you will get hyper inflation, a loss of currency value and a lack of interest in investment from abroad. But you can still have as much government debt as you want, you can still print more money and there is no limit to it. The attempts to address the problems with printing more money or QE are just palmed off with an concealed acceptance of the consequences or an excuse to take more money in taxation from the population. The solutions MMT offers to resolve the problems QE creates are consequences in themselves like paying more taxation or central bank intervention. That is not to mention the higher government debt makes it harder to avoid paying higher taxes.
When you post remarks such as this: "yes there is no limit to this [amount of new money created]", you betray an astounding naivety for someone who claims to be an economist. With regard to MMT, your characterizations are incorrect. Obviously you haven't studied MMT it in any depth. As a result, you do not understand Treasury-Central bank operations. Take a few years to study MMT, and then get back to us. (By the way the same constraints present when Fiat money is adopted were also present in times past after a gold standard had been adopted. A gold standard, however, when it was briefly possible to make it work for a few years (~20), is far more cumbersome then fiat money, and makes no sense at all in a modern economy.)
Don't mess with the guy. He is world-renowned. The British government has integrated his economic theories into pensions, and he has helped them safely navigate Brexit because of...pensions. Not to mention the other dozen governments he has been in contact with, including the USA, who are now apparently implementing his theories because...pensions. I am sure he will tell you all about it in his upcoming book. "How I saved the world economy through pension reform."
You were the person claiming the central bank could print an unlimited amount of money. Have you read my school of economic thought. I am certain the whole problem is a lack of management of pension saving.
Of course they can, but why would they want to? And this has nothing to do with MMT, which you brought up. MMT in fact is all about getting the amount of money supplied to an economy correct to avoid unemployment and the adverse effects of either too little or too much money printing. It's about getting the amount of outside money just right and what are the proper criteria. And, too, it's about dispelling nonsense.