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Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
Sorry guys. Got to go. Was fun.
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Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
The Job Guarantee program does some of what you are referee. Monetary injection comes from paying people for work.
The trillion-dollar coin is really an accounting gimmick between fed and treasury. It does not do anything else. -
Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
Because a monetary instrument is a financial instrument, like a bond.
It is a debt because the issuer (treasury) must accept it back in payment. It owes the holders of the monetary instrument the promise to accept its monetary instrument in payment.
Monetary creation is best modeled with balance sheets. monetary creation lead to an increase in teh liability of the issuer and an increase in its assets (what the issuer acquired with the monetary instrument) -
Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
This is a very important question that relates more to the nature of capitalism rather than financial operations. Beyond the immediate scope of this book.
Speaking for myself, a growth-based economic model like capitalism won’t be able to developed technology fast enough to limit resource need. In addition, the more energy and resource efficient we are, the more we use this resources. -
Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
Yes. Treasury used to issue United states note (same as Federal Reserve note except for the ink that is red). Treasury also now issues demand deposits and time deposits to state and local gov. Of course it does coins too.
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Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
there needs to be a government authority that issues the final means of payment. that we learned over the 19th century and early 20th. Who does it really does not matter.
There is perceived belief that all these contraints actually do something to prevent inflation and overspending…not so. All constraints can be by passed easily by treasury and central bank cooperation. Doing it now (QE3, Supplementary Financing program) did it in the past (WWII: fed target T-bonds rate and all the yield curve)
Ultimately, what matters for good government is good governance.Try to limit to one question at a time. Hard to be quick
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Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
Actually we do have a printing press where we can print our own monetary instruemnt. The point is to get it accepted. The government is able to get its monetary instrument generally accepted because of the broad taxing power.
People accepts gov monetary instrument because they know that in the future they can pay the gov with it (there are other reasons but ultimately this is the main one) -
Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
If you look at early american experience, Treasury of colonies just printed bills to spend and then redeemed them through taxes.
Then, treasury operations of the US got more and more complicated: central bank, debt ceiling, bond issuance and fed forbidden to be part of primary market. But all this does not chance the mechanisms at the basis of the simple treasury operations.
So in the end it is a matter of choice -
Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
Well the main reason is because a household does not have monetary sovereignty. Households’ IOUs are not accepted as means of payment.
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Eric Tymoigne commented on the blog post FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems
Eric T here too. Will comment too.
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