I will be voting NO on the Rules package with #PayGo. It is terrible economics. The austerians were wrong about the Great Recession and Great Depression. At some point, politicians need to learn from mistakes and read economic history. @paulkrugman @StephanieKelton @RBReichhttps://twitter.com/GunnelsWarren/status/1080318713331617792 …
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If the market has to absorb more of the debt that issued then their is less money to make other investments. Plus if China continues to dump our bonds and by less of them, who will be our biggest buyer of debt?
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First, that is absolutely not true. There is no fixed supply of money for investment; banks create money for loans from thin air. Second, China doesn't just sell bonds and hold dollars instead. They sell the dollars to somebody else, then those people buy bonds with the dollars
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Who said anything about fixed supply of money? When you issue more govt debt to pay for things there is less money to go into other investments if that debt is going to be serviced.. That doesn’t mean there is less supply money.
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Oh, I see, I thought you were talking about private investment, but you're talking about gov investment. That's not true either - the gov is the issuer of the currency, it can always make any size payment. Under current rules, nothing about larger debt service automatically
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will buy the debt instead of using their money to make other investments
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But gov is also spending money at the same time, and that money becomes income which flows right into the coffers of pension funds and other investors.
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Is this a parody account? I find it hard to believe you actually believe this nonsense.
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Wait until you find out that I'm an economics PhD student :D
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How’d this go for Venezuela??? Technically they didn’t go broke even though people are starving on a massive scale. This is probably the dumbest thing I’ve read from one of the most evil organizations on the planet (FED).
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You've got it backwards on Venezuela. It's the starving that's causing the price increases. The biggest cause of hyperinflation isn't 'money-printing gone mad,' it's the economy collapsing: if the economy can't produce the goods and services people need, then prices skyrocket.
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It’s not that suddenly their economy can’t produce anymore. That just doesn’t happen at random. Oil prices fell and since their economy was centrally planned to account for high oil prices, they went into a deep depression. /1
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Yes, quite right. My understanding here is that the fall in oil prices led to a devaluation of the currency, which kicked off a medium-low level of inflation. The gov instituted price controls to try to fight it, but those price controls ultimately made doing business in the
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country unprofitable, eventually causing huge swathes of the private sector to stop producing goods and shut down, drastically curtailing the supply capacity of their economy. That created the hyperinflation. That's my point. It's not that they accidentally printed a tiny touch
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too much money. That's not what causes hyperinflation. It's that their economy became a catastrophe, and the currency is just following along suit. While it's *possible* that we might do something like that to ourselves in the US... it doesn't seem likely.
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