Comment: Unemployment is correlated with high minimum wages, high long term govt unemployment benefits.

Mosler: If so, given that institutional structure, unemployment is the evidence the deficit is too small.

Mosler: That institutional structure is largely a highly counterproductive relic of the gold standard.

Comment: So, is the issue not to disturb the existing institutional structure in the future?

Mosler: No, point is institutional structure can always be adjusted to alter distribution.

Comment: The only thing standing in the way of free Higher Ed is the profit-hungry Wall St bankers who fund both the Democratic & Republican parties.

Mosler: Because our Congressionally legislated institutional structure that establishes and supports said activities. Failure of Gov!

Comment: $ denominated bank credits are not dollars. They are bank issued promissory claims over aggregate borrower/debtor promises.

Mosler: Bank deposits of fed member banks are tax credits with current institutional structure.(

Comment: It is wrong to assume that every $ spent by Govt today must be offset by taxes today or "tomorrow" bc resource capacity changes over time. Future levels of spending and taxation should be calibrated for future economic conditions, not past ones.

Mosler: Because savings desires change over time. In fact, they generally increase over time due to institutional structure and human nature.

Comment: Small changes in the US like removing restrictions on direct Fed funding of Treasury and/or clarifying legality of Trillion dollar Coin will facilitate implementation of Job Gty - which is essentially trickle UP economics.

Mosler: It can just as easily be done under current institutional structure.

Comment: There are a number of goods and services that have a very high value to the society, but due to the lack of purchasing power in certain areas, don't have a market value. I.e. child care in poor neighborhoods. School support among poor HH. The jefes program proved that

Mosler: Yes. And there are no “market outcomes” that are not directed by institutional structure.

Comment: "You tax the rich because they are too damn rich and extreme concentrations of wealth especially, but also income, are bad for the functioning of the economy, are bad for democracy".

Mosler: How about eliminating the source of socially undesired income, since it's created entirely by institutional structure?

Comment: The Left must make a case against excessive wealth. And it should not be difficult. It is destroying everything.

Mosler: It’s a matter of social equity. They are rich because of the institutional structure that’s a work of man, not nature.

Comment: It's not just a rampant expansion of our money supply; its money being created as it's spent on specific things... preferably jobs, technology, and infrastructure. But yes, under capitalism, it eventually concentrates in the hands of the owners.

Mosler: As largely determined by institutional structure.

Comment: So very proud of LA public school teachers today for taking a stand. Teachers are the unsung heroes of American democracy. Today they’re putting everything on the line so our nation’s children can have a better shot.

Mosler: Education is an investment and Congress can alter the institutional structure accordingly, rather than continue the current subversive policy that accounts for it as an expense.

Comment: There is a reason MMT appeals to justice networks. "Can We Afford Economic Justice in the United States."

Mosler: Distribution today is entirely a function of institutional structure, and not some kind of 'natural order' etc.

Comment: If people think the invisible hand of the market is justly rewarding the hard work/talents of the 1%, it feels wrong to say the money has ended up in the wrong hands. But if you explain how the 1% uses their own hands to scoop up more than their fair share, it feels right.

Mosler: When the economy is not working to serve public purpose it's necessarily a failure of government and its institutional structure, and only remedied by same.

Comment: Horrors of global capitalism: the richest keep getting richer, as wealth keeps getting redistributed to them from the middle and the poor. The system is the problem, worse now than ever. When will the world end this cruel, unnecessary craziness?

Mosler: All a consequence of government and its institutional structure.

Comment: The ultra-rich have rigged our economy & rigged our tax rules. We need structural change. That’s why I’m proposing something brand-new: An annual wealth tax on the tippy-top 0.1%. We’d get $3 trillion in new revenue to invest in rebuilding the middle-class. Let’s make it happen.

Mosler: It doesn't reduce aggregate demand, so it doesn't add any fiscal space... :(

Mosler: So it doesn't at all address the real issue- excess consumption by 'the rich' (or anyone else), and, in fact is a useful distraction for 'the rich' that works to delay resolution of this real issue. :(

Mosler: We can gain $trillions per year of fiscal space by eliminating most of the parasitic financial sector by deleting the supportive institutional structure that created it. Not mention how Medicare for all likewise cuts $1 trillion in real costs.

Comment: Why does a mega-corporation worth almost a trillion dollars, led by the richest man in the world, need our $3 billion in subsidies? That’s what I asked Amazon execs yesterday. This seems like vulture monopolistic capitalism at its worst.

Mosler: Gov institutional structure puts state and local govs in an absurd and disastrous race to the bottom to attract businesses. Another failure of the federal gov to recognize and promote public purpose.

Comment: Job Guarantee is based on living wage, and not minimum wage, plus huge intangible benefits of working like sense of achievement, being part of a group, feeling coz u are contributing to society all this is not possible with basic income or any other policy.

Mosler: Not to forget it's voluntary and it's an addition to current institutional structure.

Mosler: No, there is no nominal limit to deficit spending under current institutional structure.

Comment: Actually, I'm trolling an awful lot of people, including many liberals, who think the market generates inequality and we need the government to correct it. The market generates as much inequality as we design it to create.

Mosler: Agreed, with the currency a public monopoly, it's necessarily entirely about institutional structure.

Comment: Criticism of MMT is that it doesn’t apply to developing countries or those with non-reserve currency status as Frances mentions. These points have been addressed in the academic literature and at the 2017 MMT Conference by its core proponents.

Mosler: Yes, currency fluctuation doesn't per se alter real wealth. It does have serious distributional consequences best dealt with by adjusting internal institutional structure while sustaining domestic full employment.

Comment: Critics on the left: A fiscal rule is necessary to reassure financial markets.

MMT: Money doesn't grow on rich people.

Critics on the left: MMT ignores power.

Mosler: For example fixing the euro to gold or another currency fundamentally changes the context.

Comment: Or if you artificially control the labor markets, you get unintended consequences like corporations owning your health insurance rather than free markets determining price and quality. BTW, real wages are currently increasing albeit maybe at a pace that you don't like.

Mosler: Coercive taxation obviates any notion of 'neutrality of money', etc. and markets function within state established institutional structure, in which game theory has application.

Comment: One of the thorniest aspects of the climate crisis is the fact that many workers make a living (& support broader communities) from work that is environmentally destructive. The workers in this category is broader than usually envisioned in the "Just Transition" frame.

Mosler: With the currency a simple public monopoly, it's all entirely a consequence of incentives from gov. institutional structure.

Mosler: I've proposed a permanent 0% policy rate (via a net long reserve position and no interest paid on reserves) and the Tsy limited to 3 month bills, as this requires no change of institutional structure and can immediately 'get the job done'.

Comment: When China was buying its own currency on the market to keep it propped up against the dollar, that was manipulation of the currency. China STOPPED doing the manipulation, let it float, and the free market dropped its value against the dollar. That is the opposite of manipulation.

Mosler: Furthermore, since all currencies are public monopolies, and single suppliers are necessarily 'price setters', all currencies are necessarily 'manipulated' via fiscal policy and institutional structure in general. That is, the perceived idea of 'free floating' is inapplicable.

Comment: This is characteristically sound in the classical Kaldor-Hicksian sense, especially over the short term. But the objection to vulgar Ricardianism isn't rooted in aggregative welfarism or global efficiency. It's rooted in distributive justice and national strategy.

Mosler: Distributive justice' is pretty much entirely a function of institutional structure including fiscal policy, which I suggest can be adjusted to desired 'distributive justice' without sacrificing real wealth via deliberate sub optimal real terms of trade.

Comment: What is the purpose of having t-bills up to 3 months? Why not end all govt fixed income instruments?

Mosler: Functionally identical for all practical purposes and can be implemented immediately within current institutional structure.

Comment: Exceptional agreement among experts across the spectrum about the effect of inequality on the health of liberal democracy, and about the need for more redistribution.

Mosler: Current distribution is entirely a consequence of the current institutional structure enacted by our government. It's not some 'natural condition.'

Comment: Profits are the engine of capitalism. SOVEREIGN profits are the engine of socialism.

Mosler: Capitalism is about the state building the institutional structure/public infrastructure within which private markets operate for public purpose. Socialism is about the state owning the means of production.

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: But I don’t get the view that says billionaires shouldn’t exist in the first place. I think it’s fairly benign view that some of these guys have earned it. As long as they don’t abuse it.

Mosler: It's largely discretionary- a consequence of the dynamics of the current institutional structure as determined largely by the legislature- and not some 'natural' phenomena.

Comment: Yep, now that they are stacking term loans through October, it's becoming pseudo-QE4. Balance sheet will keep going up and then at some point they'll call it organic balance sheet expansion or something, and make it permanent.

Mosler: Purely 'technical' to manage the policy rate under current institutional structure- no 'macro economic' consequences.

Comment: We're talking about social entrepreneurship and how 'it's possible to make a financially viable company that works toward social change'. What they don't tell you is that perpetual growth is not compatible with making meaningful social change.

Mosler: True under current institutional structure which Congress can amend at will to instead promote public purpose.

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. etc.

Comment: Unfettered capitalism is Jeff Bezos making $8,961,187 per hour but refusing to provide paid sick leave for all of his employees

Mosler: That's the role of institutional structure, aka govt….

Mosler: Time is running out. They know the urgency of writing the check. The question is whether the institutional structure will let it happen:

The euro lost 0.3% to just below $1.09 on Wednesday, after Eurozone finance ministers called for an extra meeting as they were unable to reach a deal on coordinated action against Covid-19 after 16 hours of talks. EU leaders had already failed on March 26th to agree on a response to help the European economy. The three ideas that were likely to get the most support were the use of the ESM bailout fund, the European Investment Bank and the Commission's short-time work scheme to prevent lay-offs. However, ministers were divided on whether European nations should establish fiscal targets in exchange for new funding, and whether joint debt issuance should be an option.

Mosler: Let me suggest that the euro area institutional structure allows the ECB to make distributions by purchasing or accepting as collateral newly issued national government tax credits to be retained indefinitely as assets of the ECB?

Comment: Over the last few weeks that have ended up with banks. Clearly, banks have money to lend but are not doing so. Banks clearly have no reason to lend.

Mosler: With today's institutional structure, bank lending is for all practical purposes always only demand constrained.

Comment: As a theoretical point? Yes, one could. But to what end?

Mosler: Also empirical, but it means, for openers, that inflation expectations aren't the cause of inflation, and that it's gov spending policy+institutional structure that turns relative value stories into inflation stories (not that it isn't necessarily 'good policy' to do just that).

Comment: Do you think that we should have federal bonds Mr. Mosler?

Mosler: No, but for all practical purposes limiting issuance 3 mo bills does the trick and doesn't require changing the institutional structure.

Comment: Economists are part of the problem. They forget that their role is merely to promote free markets and to measure the extent to which markets are free. Instead, they tinker.

Mosler: Now that you understand the currency itself is a case of a public monopoly, you need to rethink the notion of 'free markets' operating within that institutional structure... ;)

Comment: A Major Paradigm Shift is Occurring in Economic Thinking...

Mosler: Markets do their thing within a man made institutional structure. Outcomes are a product of that structure.

Comment: Yeah, Mosler is really a free market guy. I don't think they like him much among the MMTers ;)

Mosler: Markets function within an institutional structure, which in the US begins with the $US itself a (coercive) public monopoly.

Comment: Lack of Food Sovereignty ~ Lack of Energy Sovereignty ~ Dependence on low value-added manufacturing. We should aspire to be free from these shackles.

Mosler: The first order shackles are high unemployment policy, low productivity institutional structure, exporters in control, and self enrichment of insiders via the banking system and other high level corruption, just to name a few... :(

Comment: Republicans will scream about the debt. But debt didn't matter so much to them when it came to trillions in tax cuts for their rich friends. No more playing by two different sets of rules. No more giving in to Republican hypocrisy. We need bold investments and we need them now.

Mosler: Most are born into an institutional structure that, by design, dictates their life be a quest for tax credits... :(

Comment: For the record - Warren and I are on the public record (2001) as saying the continued issuance of public debt is unnecessary and should be discontinued. That certainly would change the CB-Treasury relationship.

Mosler: Yes, and for all practical purposes the US Treasury limiting new securities to 3 month bills does the trick within current institutional structure. Please forward to Janet, thanks, and remind Congress to mandate a permanent 0 rate policy and a JG to enhance price stability.

Comment: It also leaves us with a deeply inequitable society - and a crusted state sector. There is no way LVT could ever equitably deliver the tax revenue required by a state embracing MMT and wanting to control inflation. If you want to say goodbye to the NHS and more, do this.

Mosler: My proposed real estate tax along with proposals to cut off problematic income at source, permanent 0 rate policy, JG, narrow banking, etc. and sufficient aggregate demand via fiscal policy can do the trick. Institutional structure is causing the problems and can be modified. ;)

Comment: A policy variable means the central bank can set it by market-making. Which points to supply/demand factors in setting yields, not expectations. What am I missing?

Mosler: The Fed is the sole supplier of reserves, therefore 'price setter.' It can set the entire term structure of 'risk free' rates but elects to only set overnight rates and let the term structure reflect anticipated future rate settings and 'technicals' of institutional structure