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 …
-
-
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.
-
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
-
will buy the debt instead of using their money to make other investments
-
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.
-
Is this a parody account? I find it hard to believe you actually believe this nonsense.
-
Wait until you find out that I'm an economics PhD student :D
-
That just means you’re propagandized by government (and gov-friendly) economists. Have you ever been educated on Austrian business cycle theory? What’s you’re critiques on it?
-
My critique on it is that it's incoherent nonsense. The biggest problem in my mind is that when most people today talk about "malinvestment," they're talking about something totally different than the original writers of ABCT were, rendering the whole theory invalid. But, even
- 4 more replies
New conversation -
-
-
China and Japan have been dumping treasuries all last year. If China our biggest buyer decides to really step up the pace of dumping and isn’t buying, interest rates could spike, dollar weakens. Plus Fed is unwinding it’s QE balance sheet so they won’t want to buy debt either
-
First of all, foreign nations selling Treasuries doesn't cause interest rates to increase. That would only be plausible if they were selling the Treasuries but then hanging on to the dollars. That's not what's happening. They sell Treasuries for dollars, then sell the dollars for
-
some other currency. The new holder of the dollars then buys Treasuries with them. So, there could be effects on the exchange rate, but there's no effect on interest rates. In any case, under current law, there's no possibility of Treasury being unable to sell bonds. Primary
-
Dealers are obligated to buy the bonds if nobody else does.
-
No one said treasury would be unable to sell but interest rates would most likely have to go up to make them an attractable investment. Higher interest rates would be not great for people looking to purchase homes or companies looking for capex loans etc
-
I'd say the interest rates primarily come from arbitrage on expectations of what the Fed is going to do. If those rates get too out of line with those expectations, then there's money to be made.
-
Money to be made by people who can perform arbitrage. I’m more concerned about the average citizen and their govt saddling them with more debt and higher rates
- 1 more reply
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.