Modern Monetary Theory (MMF) inspires a lot of my thinking about money, the economy and politics in general. Like Marxists who have never read Marx, I am enthusiastic about an idea that I only dimly understand. At its heart, MMF seems to be based on a realistic view about how money is actually created in a modern Western context. The bottom line seems to be that a Government that controls its own currency cannot become bankrupt. In particular, deficits don't matter. Some of the assumptions that MMF makes don't apply in the real world, most notably that Government debt must not be sold to foreign holders of debt. In fact, massive amounts of US debt is held abroad (most notably by its bitter rival, China). This little detail about who owns the debt is just a preview of the problems easily missed by armchair economists, such as myself, that build their Utopian theories on the shifty sand of MMF.  Having said that, here are some links for a tutorial on the concept: Bill M

This idea springs from what I understand of " Modern Monetary Theory ", which amounts to one idea - namely that there is no risk for "printing money" as long as the result is solid, valuable infrastructure. To be sure, I understand almost nothing of this idea - take this as notes on the first glimpse of the concept to be revised or torn up. Utopian system - Government directly creates the money it needs Government (G) identifies the need for a bit of infrastructure - a bridge G puts the project out for bids, contractor C wins - price is P Note that there is ample room for competition, innovation and "creative destruction" at this point G prints up $P (imagine small denominations, $1 million) C builds the bridge, G pays C $P All workers, vendors, sub-contractors, suppliers have been paid G has its bridge.  Nobody owes anything to anybody C has accumulated "goodwill" capital  Similar benefits have been won by vendors and workers etc

As far as I can see, Greenspan's pure conservative outlook has no place for the "commons."  This is quite clear when he takes up the issue of climate change.  His point is that climate change is (a) a real thing, but (b) it would cost money (reduce the sacred GDP) to fight it. This is perhaps the most extreme case of commons-blindness. Basically, the idea is that industry would need to pay a "tax" to clean up after itself, which would reduce investment, lower productivity, and jobs would be lost. Of course, in the long run, the cost of climate change may be vast - even to the point of destroying all of civilization. This is perhaps a debate for another day. The point is that Greenspan and his pals support. This is an example of "downloading" costs on to the public. It applies to pollution, habitat destruction, health risks and much more. These costs are not easily accounted for in GDP - they are, in fact, systematically ignored. One may also ask

Greenspan on the hot seat This turns out to be as close as he comes to actually admitting he was wrong. His book, which will be the source of my comments, tells a totally different story from his hedged remarks here, which don't actually add up to a shadow of apology. Basically, he blames bankers (his closest friends) for not being as trustworthy as he thought. His "world view" is wrong just in this respect: the idea that self-interest of bankers and generally people in the financial industry are not as "rational" as he thought Subsequently, one can search in vain for any backtracking on Greenspan's core world view. I take this world view to be accurately and comprehensively laid out in his writings.  Agree or disagree, Greenspan's views have sweeping applicability and are backed up with by impressive fine-tuned historical analysis. Even so, it seems to me that Greenspan and the "real conservative" world view is wide open to serious ch

I want to bookmark this subject for a detailed treatment. Spectacular failures podcast -> Buyout of America My thought is that two things happened to revolutionalize the "real economy": (In agreement with Marx)  The commodification of human labour, introducing "wages" and the phenomenon that if you can't work, you die along with if you don't push wages to minimum and staff to a minimum, your business dies. More recently "finance capitalism" which treats money itself as a "resource" and "output" totally divorced from the value which money itself is supposed to represent. Mathematically this self-reference is a recipe for chaos along with deep issues concerning the impossibility of a "model" of the economy. On the ground, it seems to have played a key role in many crashes of the "capitalist" economies. I recently completed Burton's "Promised Land" which describes the land rush in the