$11 Trillion Debt Wave Shows MMT Doesn't Work

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Proponents of MMT please note: Your proposal is failing in actual practice.

Please consider £11 Trillion Debt Wave as Governments Borrow More Than Ever Before.

Governments need to borrow £11 trillion on financial markets this year, breaking the £10.9 trillion record set in the recession-fighting spending spree at the height of the financial crisis.

Most of this is caused by governments refinancing existing debt mountains as the bonds issued to finance earlier debt-fueled spending mature.

But more than £2 trillion is new borrowing as nations continue to add to their national debts, according to data on rich-world economies from the Organisation for Economic Co-operation and Development (OECD). The US budget deficit hit more than 4% of GDP last year.

Austerity Nonsense

Amidst all this nonsensical talk of austerity, government debt keeps expanding, and expanding, and expanding.

The MMTers will simply come back with claims we need to double debt or triple it, or whatever multiple it takes, effectively embracing AOC's idiotic Green New Deal.

And where foolish thinking prevails, look no further than Chicago where we have yet Another Idiotic "Free Money" Proposal, This One From Chicago Mayor Rahm Emanuel.

In the real world I ask, Tax the Rich! Tax the Rich! How's it Working Out?

MMTers will respond that government debt doesn't matter at all. So, why tax anybody? After all, government always spends money wisely.

Mike "Mish" Shedlock

Comments
No. 1-23
WildBull
WildBull

Failing: Weimar Republic, Venezuela, Zimbawbe, Greece, Argentina, Argentina, Argentina, Spain, Spain, Spain, Rome, USSR. How many times does it have to happen. What makes this time different?

Usernameistaken
Usernameistaken

What, exactly, is failing? Your post leave a lot unanswered. What is it you're worried about; or are you trying to sell something?

MortgageAngel
MortgageAngel

So, why tax anybody? - you ask. The purpose of federal income tax in a fiat currency system is to REGULATE THE ECONOMY. It’s how you hit the desired inflation rate. Hence, federal taxes do not actually ‘pay’ for anything.

FelixMish
FelixMish

Behind all this detail-noise seems to be a situation that must be dealt with in the next couple decades. Worldwide.

"Money" has become too important to leave to individual nation states.

Money is always trying to become universal. The larger and higher-bandwidth the world of money is, the better. The more efficient. The more accurate. The more effective.

But, currently, no one knows how to decouple "money" from nation states. Some essential problems:

How do you stop counterfeiting? Where's the power that ensures honesty behind a unit of "money"?

How do you ensure privacy? Or do you give up on privacy - go whole-hog with the global village?

How much "money" should there be?

How do you stop getting in a "winner takes all" trap?

How do you fit the money world with human psychology?

How do you "pay" for functions communal, geographic entities currently do?

The crypto guys are madly trying to solve such problems. But, clearly, they have a long, long way to go.

The current world, letting a small group of people trade currencies at high volumes with low overhead, may be the best long-term solution.

Who knows?

Brother
Brother

Not enough to cover there debt so they just make more. Just think how many new millionaires this will create.