THREE (3) THINGS TO WATCH BEFORE YOU PASS COMMENT ON MMT
The Basics of Modern Money
The Basics of Modern Money
…instead of saying they want to reduce government deficits and debt, supporters of “fiscal consolidation” and other such policies should say that they want to lower growth and lower private sector net saving, since that’s what the impact of their policies is likely to be. At the very least, supporters of austerity should indicate which of the other two balances will be reduced along with the government’s budget deficit, and how they will do this.
Michelle Grattan from The Conversation puts it best.
Australian Treasurer Josh Frydenberg has an opinion piece in the Australian Financial Review today, the complete article can be read on the Treasurer’s website.
Originally posted at Australian Real Progressives
By now you have probably noticed Australian Real Progressives has a rather heavy focus on jobs. This is because 2 million Australians are looking for work or more hours.
“So far as it can humanly contrive, never again will the dole queues be seen in this country. Never again will competent workmen stand idle for months and years while limitless work remains to be done. Never again will young men drift hopelessly from town to town and from State to State, searching for the jobs which, in all this wide land, did not exist for them.”
Ben Chifley, 1949.
In my previous post I outlined why jobs don’t come from rich people: capitalism runs on spending (sales), not savings. Job opportunities appear naturally when businesses forecast sales growth and expand output accordingly (and similarly disappear under reverse conditions). When viewing the economy as a whole, we can observe that private sector investment responds to rising incomes and spending as entrepreneurs expand output to match market demand and banks have confidence lending.