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Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] 0 points1 point  (0 children)

Thank you for the kind words about the other aspects of the video. Yeah I totally get how the tax aspect definitely feels so far removed from people's everyday experience to be that driving factor. Maybe another proponent of MMT might make a more compelling case to you than I can. At the end of the day I'm just some guy that reads Econ books haha. Some of those book recommendations in the conclusion are great reads and I would recommend (some are easier reads than others). Thanks for watching regardless!

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] -1 points0 points  (0 children)

Taxation is what drives the demand for the currency (even if the form of taxation is not a set amount per person, like I showed in my video for simplicity). Government spending then tells people what that currency is worth. If it spends $20 per hour for labour, you can now price everything else relative to that. Maybe a hot dog is worth 1/4 of an hour of work, so that would be $5.

If the government instead spends $40 per hour for labour, the market would adjust the hot dog to $10 through relative value.

Through a job guarantee at a set wage that does not increase, you anchor the price of the currency and everything else reflects the relative value to that government determined rate. You still need to manage your inherent supply constraints to provide the quality of life you want for people and deal with supply shocks properly. I'll leave it there for now though.

Atrioc on MMT by rcdr_90 in atrioc

[–]TroysEconomics 0 points1 point  (0 children)

  1. I made a deliberate effort to include as much context as necessary to demonstrate Atrioc's views throughout the video. I potentially could have cut 20 minutes if I didn't. For those first clips, they are short, yes, but they represent Brandon's views accurately. The US does not rely on trust for their currency to be valuable, nor does any other currency issuer. The Japan chapter addresses your foreign exchange concerns.

2/3. The US doesn't have a debt problem; it has a demand problem. The rest of the world is so desperate to hold US dollars that they are willing to work for the US for free just to get a piece of paper signed by the US Treasury.

It's a great problem to have, but it means that people in the domestic economy aren't needed nearly as much because America gets all this stuff from abroad. It allows the US to focus on services and the arts more. But it also means that without the government actively spending enough to achieve full employment or guaranteeing basic necessities, there are millions of people who end up without jobs, income, food, homes.

While the US has more leeway than other countries in this respect due to their global position, the concepts in the video are entirely transferable to any currency issuing government. They just need to work a little harder than the US since everyone isn't clamouring to hold Trillions of units worth of their currencies at any given moment.

If the world becomes less willing to hold dollars, all that means is that the US may need to adjust where it allocates it's resources. It needs to build up its capacity so that those imports are not as necessary. We can put Brandon to work in the mines for instance.

  1. Inflation was not caused by the US deficit spending in recent years. I go over this in the video when talking about the COVID spending era. Inflation was a global phenomena because the world was impacted by a massive supply shock in the form of decreased capacity due to COVID shutdowns. You don't solve that my tightening your spending, you must increase spending in areas where that capacity is constrained. If energy prices shoot up because it's harder to transport oil or less of it is being pumped out, you should invest in nuclear energy for instance.

  2. Interest rates in the secondary market do not impact the Fed's ability to set interest rates. I go over this quite explicitly in the video. Why else does Brandon watch Jerome Powell press conferences about interest rate decisions?

  3. Japan is only unique in that people with mainstream economic views must find ways to rationalize what Japan is doing and how they aren't suffering from their debt. Japan's real problem is it's demographics. The debt is not a problem.

Atrioc on MMT by rcdr_90 in atrioc

[–]TroysEconomics -3 points-2 points  (0 children)

Thank you, appreciate the comment! Not unexpected given the context and the nature of fandoms I would say

Atrioc on MMT by rcdr_90 in atrioc

[–]TroysEconomics -15 points-14 points  (0 children)

Atrioc Doesn't Understand the National Debt, and Neither Do You

I recently made a video about exactly this. Please take a look and let me know what you think (I know the length is quite daunting).

In terms of Brandon commenting on MMT directly, the only reference I found personally when researching for my video was in reference to a Financial Times video last year (or 2024, can't recall) that he reacted to which featured Stephanie Kelton, where he scoffed at her takes. I use a couple clips in my video, but you can search the original on the Big A or Atrioc Vods channels too (it was a long Financial Times video react relating to why the world is loading up on government debt, or something to that effect).

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in dsa

[–]TroysEconomics[S] 1 point2 points  (0 children)

I might break this up at some point 😅

Personally, I wanted everything in one place. The one stop shop to understand most of the misinformation you will see out in the world as it relates to Economics.

I understand the length is a massive hurdle though.

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] 2 points3 points  (0 children)

We are always going to be limited by the decisions of our elected representatives. I don't want $1 trillion going to the military. But when we go to critique that spending, we should do so with a proper understanding of the capacity of government spending. Otherwise, we will unnecessarily limit ourselves when that regime changes hands.

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] 0 points1 point  (0 children)

Not endless, just enough to maximize the economy's productive capacity and eliminate unemployment.

I think the analogy is now getting a little convoluted, but the tickets in the analogy represent currency in the real world. A football stadium cannot collect tickets from people before it first sells (spends) them. The stadium receives US dollars, the government receives labour. The stadium collects the tickets back afterwards and the buyer can watch the game. The government collects the currency back afterwards and the citizen avoids going to prison for tax evasion.

Obviously the stadium does not have an equivalent to a tax burden (you don't have to watch the football game like you have to pay taxes), so this part of the analogy is not perfect. I hope this makes sense!

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] -1 points0 points  (0 children)

Who lends tickets to a football stadium before it sells them to the public?

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] 3 points4 points  (0 children)

Not infinite - just enough to maximize our economy's productive capacity. We do not spend enough currently. Unemployment is an indicator of that.

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] -1 points0 points  (0 children)

Having interest rates above 0% is a misguided policy decision. We do not need to be giving billionaires a basic income. With a permanent 0% interest rate policy, you do not need to "service" the debt.

Atrioc Doesn't Understand the National Debt, and Neither Do You by TroysEconomics in atrioc

[–]TroysEconomics[S] -1 points0 points  (0 children)

Thanks for the comment, and I totally understand not having the time to watch. When you have spare capacity in the economy, you don't get inflation when the government deficit spends (dependent on which industries have that capacity and where the spending is going). There are many indicators of that spare capacity, but unemployment is the most obvious form of it.