Mosler: Health Care bill looks to make a problematic system worse. Tax now and don't spend until 2014 is a 3 year drag on the economy.

Mosler: Just got the links to the video of my talk at the conference to fight back against the efforts to slash social...

Mosler: I am now in the process of gathering the necessary signatures to be on the ballot in the USVI as a 2012 candidate....

Mosler: Comments on Professor Blinder WSJ op ed.

Comment: Second post on Germany - attempting to find a reason for poor private sector investment. It's banks, of course.

Mosler: More likely low aggregate demand=the deficit is too small.

Mosler: My videos from the June Italian tour.

Comment: Yes, the personal savings rate is down to 4.2% in the US now but isn’t this what policy makers want? The key is wages.

Mosler: Interesting how savings rates tend to fall with the federal deficit falling ;)

Comment: Question #10 for 2014: Downside Risks.

Mosler: Biggest downside risk- the federal deficit is too small, given the credit growth needed to offset the demand leakages.

Comment: "How high should taxes get on wealthy".

Mosler: Hence 0 rates, no tsy secs, etc. cutting off said income at source!

Mosler: Problematic incomes stem largely from govt 'subsidies' I propose to eliminate at source.

Comment: BoE: Banks create most of the money in the modern economy - Quarterly Bulletin article.

Mosler: Bank loans (assets) 'create' all bank deposits (liabilities).

Mosler: The real game changer would be US treasuries and JGBs... ;)

Comment: Adjusted monetary base rose by $65 billion over the past two weeks to $4.15 trillion.

Mosler: And I wonder, if anyone is still willing to bet real money, it's inflationary ;)

Mosler: New blog post! Yellen sort of agreed with me in 2009.

Comment: Is requiring investors to realize losses on excess debt a fiscal adjustment?

Mosler: Probably not. Investor spending probably more sensitive to real time mkt value.

Comment: Why does MMT think money can only be created by government borrowing, and not by private borrowing?

Mosler: Quote your source, thanks. Bank lending results in both, bank loans and bank deposits, assets and liabilities.

Comment: Trump is right, that properly ending corporate inversion could bring trillions back to America. Quantifiably, biggest opportunity available.

Mosler: Not a bad thing, but of no macro consequence as it's currently not demonstrably a constraint on real corporate spending.

Comment: Can we not ask candidates complicated economic questions and give them 90 seconds to answer? It's not jeopardy.

Mosler: I would ask all candidates if they think professional wrestling is real...;)

Comment: In other words, US deficits are TOO SMALL! Fiscal policymakers aren't doing their jobs.

Mosler: TIPS show the 'all knowing' 'real time' market's inflation forecast ;)

Mosler: So maybe Trump thinks that he needs 'inflation' to bail out his real estate holdings? ;)

Comment: The REAL question now is whether the Fed will pause but STILL begin balance sheet reductions, or whether pausing means no reduction.

Mosler: The real question is whether the general ongoing bank lending collapse is being offset by borrowing elsewhere.

Comment: "We all do better, when we all do better."

Mosler: As discussed in real time when it all started....

Mosler: My quick responses to Professor Murphy's questions.

Comment: And with higher domestic gdp growth, and no new external debt being added, the external debt to GDP ratio is continuously declining.

Mosler: And as a possible contributing factor, nations at full employment tend to attract FDI, which works to support the currency.

Comment: Warren - recently you circulated a white paper draft where you suggested abolishing all individual and corporate income taxes - doesn't that conflict with your previous writings that it is the taxes, and our obligation to pay them in dollars, that defines the currency?

Mosler: All 'replaced' by a real estate tax.

Mosler: My recent Real Vision interview without a paywall.

Mosler: The Green New Deal, which I support, per se promises only "blood, toil, tears and sweat" (Churchill, 1940) in exchange for a go at fighting climate change....

Mosler: Manufacturing has largely become a commodity, and an ever decreasing share of gdp, service sector productivity measurement is highly problematic. And productivity of 0 marginal cost output like software and songs downloaded is a function of volume/demand from policy response.

Comment: Tariffs are killing the global economy, with no pushback from the free trade Republicans or the opposing Democrats who also believe China is the 'bad guy'. Sadly, it reminds me of a child's game we called 'who can touch the softest.'

Mosler: I'm at a loss as to how to get the word out to stop this massive slow motion train wreck. :(

Mosler: This is THE problem: "President Trump has the strong support of the American public when it comes to standing up to China," Mark Penn, co-director of the Harvard CAPS/Harris Poll survey, said.

Mosler: Far more effective and constructive to first change the institutional structure that's the open spigot that's providing the excessive incomes and wealth.

Comment: What do you recommend here other than eliminating T-bonds?

Mosler: Narrow banking, Eliminate equity ownership for fed insured pensions, JG with living (real) wage/benefits, Campaign finance reform- (say) 40% of donations go to the opposition, Eliminate private jet travel, Corporate governance reform, Just getting started!!!!

Comment: Question: What do people mean by "capital flight" in this context? They can't mean the departure of paper money (which is replaceable at zero cost). Do they mean the departure of human capital (w/ no scope of importing their brilliant services produced from abroad)?

Mosler: It's generally about selling dollars and buying FX, often via selling US financial and real assets and selling the dollar proceeds to buy FX denominated assets. The first order consequences are a falling dollar and deflationary price pressures, as indifference levels shift.

Comment: When a national government curbs spending on public purpose initiatives because the domestic economy can no longer absorb deficit spending, that is not austerity. Austerity is when the national government deliberately sets out to wear the people down through attrition, severely limiting their ability to obtain the currency necessary to meet the basic living needs of the people, whilst the government redirects its spending power and relinquishes its control over public services to a small handful of private entities, thereby handing over to those entities greater control over the nation's real resources and as a result of that, greater profits. In other words, austerity is the deliberate shift of fiscal policy with malice aforethought, away from the public purpose. It is violence.

Mosler: The purpose is most often to support exporters at the real expense of the macro economy. President Obama: "...to consume less and produce more; to import less and export more.” And he puts GE's Jeff Immelt in charge... :(

Mosler: Seems to me this is the most serious challenge yet to keeping the EU together? Massive negative labor supply shock, collapsing export markets, cumbersome institutional structure (at best), highly stressed population before this crisis, etc.

Comment: Fiona is right. The old lie that there isn't any money has been exploded. We can do what, as a society, we want to do. It will just take decency and hard work.

Mosler: The Gov's purchasing power= what's offered for sale in exchange for units of that currency.

Comment: Lol? Apparently Bill Mitchell is an anarcho-communist now. Him and @wbmosler must be very strange bedfellows.

Mosler: My proposals generally have universal appeal. My 2011 payroll tax holiday was the only legislation passed by the Obama administration with bipartisan support, for example, and John Carney (Breitbart) supports our JG proposal, etc.

Comment: That's not how I see it. Deposits are (or, are seen to be) a cheap funding source because, at least historically, it was possible to power a lower interest rate on deposits than it cost to borrow funds from the CB or elsewhere.

Mosler: Deposits are generally expensive to service and at the bank I owned were net higher cost than wholesale borrowing. But in any case it is all a consequence of current law, policy, etc.

Comment: Yes, I have always found this claim to be somewhat more assertion than fact (hence 'seen to be'). I often wonder if a bank had been set up in 2009 and only borrowed directly from discount window whether that would have been a viable business model given w hindsight they would.

Mosler: The discount window had a penalty rate. And larger banks were net long retail deposits, smaller banks net short and forced to pay higher rates to attract them, and our access to low rate brokered deposits was restricted, all in a disclosed ploy to drive takeovers by larger banks.

Mosler: I see it this way: Trump was the price voters paid to keep out the Clintons, and now Biden is the price they have to pay to remove Trump.

Mosler: Seems it's come down to the candidates being costs, and not benefits, much like exports....

Mosler: Henry George: Lana Dell and 21 others >"A representative government may become a dictatorship without formally changing its constitution or abandoning popular elections. Forms are nothing when substance has gone. And the forms of popular government are those from which the substance of freedom may go most easily. For there despotism advances in the name of the people. Once that single source of power is secured, everything is secured. An aristocracy of wealth will never struggle while it can bribe a tyrant."

Comment: Jerome Powell, Chair of the Federal Reserve, explaining why the US government will never go bankrupt in a 60 minutes Interview on Sunday. "As the central bank, we have the ability to create money". This completely destroy the arguments for "austerity" and "fiscal responsibility".

Mosler: I met Scott Pelley maybe 10 years ago in Ct. and told him how much we all appreciated his identical exchange with then Chairman Bernanke. Thanks again Scott!!!

Comment: What happens if they don't have enough on others M.R.A. or on the Fed's cap account? Could that happen?

Mosler: The account balance is negative which is booked as a loan from the Fed on settlement date.

Comment: Ultra-low or negative bond yields are unappealing to investors building balanced portfolios. They provide limited protection to further weakening in the economy while generating no returns when the economy is performing well.

Mosler: Something was sold at market prices with the buyer in full knowledge of the yield he would earn on the bonds he would buy. That is, it all expresses indifference levels.

Comment: Yes and no. The ZLB refers to the very front-end policy rate. There is always room for policy to influence longer-term yields, which is what QE is for. And there's plenty of room for ECB asset purchases to reduce real yields for Italy and Spain, which are still too high....

Mosler: The ECB could guarantee new issues of member nation debt rather than buy it, for example.

Comment: Hey @wbmosler, what do you think about $BTC? It seems unnecessary for a country operating under MMT?

Mosler: Seems to trade like there's some kind of permanent shortage built into it by design, other than investor demand? And no, I don't see it as any kind of necessity.

Comment: UK chancellor's wife is a shareholder in a restaurants business that funnelled investments through a letterbox company in the tax haven of Mauritius. Opacity & tax avoidance are the only reasons for using tax havens and the Chancellor knows that.

Mosler: An issue-and one of many- that goes away if you only tax real estate... ;)

Mosler: From 2012, euro analysis.

Comment: The answer is YES! Colossal fiscal support, much more generous than we are offering currently, is needed to support compliance with social distancing, and to compensate those affected as much as possible.

Mosler: Unemployment (as defined) is always an unspent income story.

Comment: Invoking the limits argument in bad faith, or just badly, has also stoked the equally bad idea [emanating particularly from MMT] that there are no limits, or no practical limits, that taxes don't fund govt spending, and that you can use the printing presses and not worry about it.

Mosler: There are no nominal limits in that spending is a matter of crediting accounts. The real limit to spending is what is offered for sale with a price tag in your currency.

Comment: $27.4 trillion in savings!

Mosler: Tax advantaged savings created by Congress-pension income/contributions, corporate reserves, etc.- drive the 'need' for net spending/public sector debt. It starts with the 'we need savings to have money for investment' myth, etc.

Comment: It is not a currency. Just an accounting unit that allows for a rebalancing of trade and capital flows. Thus, it is precisely the opposite of the euro - a currency which, lacking a surplus (goods & capital) recycling mechanism, demands austerity as it maximises imbalances.

Mosler: For one thing, he has the trade thing backwards. :(

Comment: What kind of money?

Mosler: Bank liabilities, including the Federal Reserve Bank liabilities- cash, $ in reserve accounts, $ in securities accounts (treasury securities)

Comment: QE is not printing money and it is definitely a tax. A tax deletes money. So what do you do with bloviators that speak past their understanding?

Mosler: QE functioned as a tax with a positive yield curve. Check out Fed profits...