The Gower Initiative for Modern Money Studies - 2019
Ellis Winningham discusses what treasury bonds are, their function in the gold standard era, how they operate in today’s free-floating fiat currency regime and why they should no longer be issued. The original post is here.
There is no particular necessity to match public deficits with debt-issuance for a currency-issuing government and deficits should be accompanied by monetary operations which we now call Overt Monetary Financing (OMF).
This self-defeating strategy – failing to use the most effective policy tool in favour of an ineffective tool is the neoliberal way. It is the recipe that New Keynesian macroeconomics offers. It is mindless, ideological nonsense and the problem is that it is not the top-end-of-town that suffers from the negative outcomes that follow. Quite the opposite in fact.
The only things driving growth has been declining household consumption growth and some state government public infrastructure projects. The former is declining sharply now because of flat wages growth, record debt levels and falling wealth on the back of plunging real estate prices.
The sort of desperation that central bankers now face as governments shunt the responsibility of counterstabilisation onto them while claiming that achieving fiscal surpluses is the brief of the treasuries.
Superannuation is mostly a con. It involves the funnelling of vast amounts of wealth from wage-earners to the financial sector, and continues the neoliberal project of fracturing and individualising our hopes and ambitions.
Three assertions: There is no such thing as “taxpayer money.” Taxes do not pay for government spending. (Nor does debt. No revenue is needed.) Leftists who continue to talk as if “taxpayer dollars” must be collected to “pay for” government programs are undermining Medicare-for-all and every other progressive policy initiative.
The misunderstanding about the relationship between spending and taxes leads to an array of incorrect beliefs, many of which are strongly held and define what it is to be a ‘progressive’. Alan Hutchoson argues that taxing corporations does not achieve the actual purpose of taxation.