“Modern Monetary Theory,” Print That Money Baby!

What is “modern monetary theory” (MMT)? I am glad you asked! It’s the idea that governments, in this case, the United States can print and borrow as much cash-o-lah as they see fit. It’s a new way of forward financial thinking they tell me.

Now our governments have been ruling as if modern monetary theory is the law of the land. This has been going on for generations, but really ramped up with the 2008 financial crisis. That was when governments the world over bailed out institutions, the “too big to fails” they called them.

Do you realize,

The United States is now running its biggest budget deficits since World War II: 14.9 percent of GNP last year, and 10.3 percent this year. Total debt easily exceeds 100 percent of GDP.

New York Post

Out total debt exceeds what we produce.

Notice, all political parties have contributed to this disaster; Republicans and Democrats. There is no such thing as conservative politics anymore. I say that beyond the financial aspect, but let’s stay focused shall we?

Balanced Budgets Are A Myth?

Now liberal (my Dad has another name for them) economist Stephanie Kelton seems to think modern monetary theory is the way to go.

An economics professor at Long Island’s Stony Brook University and a former adviser to Bernie Sanders’ Senate Budget Committee, Kelton aims to demolish what she calls “the household myth”: that is, as we’ve often heard from politicians, that we should balance the federal budget the same way we balance our family budgets.

Bernie Sanders?!

Just grin and bear through it with me.

Of course, we should have a balanced budget, but modern monetary theory hatched by liberal globalists wants to buck that trend.

Let’s see what this box of hot air has to say next.

Government Creates Money Out Of Thin Air

Kelton explains why, to MMT theorists, the US government is nothing like a household. Unlike the average person, the US government doesn’t need to earn money, she argues. The government doesn’t tax people and companies because it needs money, contrary to popular myth. It literally makes money with the central bank, the Federal Reserve, creating electronic currency out of thin air.

At least the gal is honest here.

The Federal Government works with the not so Federal Reserve to manufacture money out of thin air. We call that fiat currency, (see: The Money Masters). The government can fire up printing presses, but if you did that, you would be thrown in jail.

“Fairness” and “equality” for all they say!

You will love Kelton’s next line, and the New York Posts fill in,

“The US can’t lose control of its own interest rate.” People, businesses and other governments will always want to lend us money, in holding Treasury bonds, because few other options exist for savings, and so they will have no choice but to accept low interest rates.

Have these modern monetary theorists been sleeping under a rock?

Next to no one wants to lend money to the United States right now, it’s been this way for a while actually. In fact, the not so Federal Reserve continues to buy a record number of bonds of all shapes, colors, and sizes. Buying bonds is what enables the government to keep printing money.

Don’t take my word for it, let’s hear it from the horses mouth. In this case, the horse is the not so Federal Reserve.

To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion.

FOMC Statement

Now that was from March 15th 2020.

This has only continued, in fact, it’s escalated. Let’s look at the latest FOMC statement which states in part,

In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.

FOMC Statement

The previous statements said the same thing. $80 billion and $40 billion per month, cause no one else can or will!

Not everyone is a fool, my friends. People and nations see the United States printing endless supplies of currency and know it’s a bad investment to buy such bonds.

So let’s summarize.

A Living Wage

The globalist economists think we can spend like there is no tomorrow, and that it’s good for the economy, and good for you. If you do not believe this is a globalist initiative, read this,

Kelton, like many liberal MMT theorists, suggests a federally funded jobs-guarantee program, with a “living wage” (as usual, undefined) and good benefits.

That is welfare. This is the same lingo the entire globe is pitching right now. Universal basic income, blah, blah, blah.

Modern monetary theory not only promotes endless government spending, but it also promotes the welfare state. Now what happens when a man stops working and allows the government to take care of him?

That man will then have to conform and do as the government says. We can find a great example of this in the 501c3 tax exemption many churches and other organizations claim in order to save on taxes. The catch here is, you must do as the government sayeth or thy 501c3 shall go bye-byeth.

It will be the same for any man who accepts a handout from the government.

Fact of life my friends.

That means the government owns you. Personally, I always thought our founding fathers said we were all free and equal men and not to allow the government to exert such power over us.

Welfare Encourages Work

If you have been paying attention to the news, we are constantly bombarded with this new idea of the government taking care of us. Look, someone has to pay the bills. I guarantee you, if we all sat at home on our duff, the refrigerator would not refill itself.

Welfare makes people lazy by nature. Of course, according to this Bloomberg report, that is simply not true.

In a recent paper, economist Henrik Kleven reviewed the evidence that EITC (Earned Income Tax Credit and the Child Tax Credit) encourages work, and found it was pretty shaky. It seems that the old saw that welfare recipients choose to live off of government benefits instead of getting a job was never particularly accurate, and instead the number of people who work is mainly limited by the available job opportunities.

Earned income tax credit, getting money from the government for having kids encourages work they say. I tell you what. These boys need to come live in the neighborhoods I grew up in. Everyone there either received welfare or a social security check, and the ones who didn’t, well, they were standing in line.

Not true says Bloomberg,

In fact, some new evidence shows that unconditional cash handouts might even encourage work.

What evidence?

Evidence from some crack pot globalist?

In the new world we find ourselves in; left is right and down is up.

What Does God Say?

If you won’t listen to me and common sense here, then maybe you will listen to our Heavenly Father.

2 Thessalonians 3:10
For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

That’s right from God’s Word.

Are you going to believe that?

He said if you’re a dead beat who is able to work, and you won’t, then you do not deserve a meal.

These days my friends, men will come up with all sorts of talking points and find “new evidence” to support their fables. You can believe them if you want to, but that does not change what God said about it.