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Comment by cwperkins | Hacker News Reader

Be careful what you wish for. I agree with Stieglitz that the Troika has historically not chosen the best path for crisis countries by implementing austerity. My fear with using Fiscal Policy and running deficits is that it is hard for a politician to win a campaign fighting for austerity if and when the debt binge becomes to great. From my own understanding, that is why monetary policy is strongly preferred because it’s easier to roll back but Europe is at their end of Monetary policy. I wish I understood MMT better, it’s something discussed in the circles of parliament and congress but I don’t think the average joe is aware.

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This is absurd in the context of Germany. They have a fetish with "fiscal responsibility". It'd be the natural inclination of every politician to cut back on deficits (and I imagine within a few years there'd be pressure to).

Germany is a country with a broken military and infrastructure. They should spend money on that. They should cut taxes for workers. There's plenty of shit for Germany to spend money on, and it would cause yields to finally rise.

The ECB has no choice because rich countries refuse to spend money.

I want to be clear that I think the Germans, Dutch and Swedes can afford to do more for the benefits of their own economies and of Europe’s. Germany needs to ween itself off of lignite coal and get better broadband infrastructure as well as contribute more to NATO.

On the other hand in a place like Argentina, I’m not sure what the exit strategy.

I really hate this idea that everyone needs to just constantly be spending. It's useful but there is nothing wrong with having a slow stable fincal conscious ecconomy.

And I really hate the moralizing as if the national economy needs to be run like a household budget.

I think the moralizing is useful if it means future generations aren't going to pay the price for today's profligacy.

This extremely poor misunderstanding of macroeconomics is likely to lead to the outcome you're supposedly trying to avoid.

So... when does the music stop? Some kind of debt jubilee or currency reissue?

Instead future generations are going to pay for today's economic ideology

Creating debt is taking money from the future. There are some discrepancies between running a business and a national economy, but I think the results are still pretty unknown.

When anyone tells you that you should spend your money more, you should have a red flag.

Do you object to people being employed, being productive, and creating value?

Because the way you get that is by spending on it.

This is a really dangerous fallacy.. If you genuinely believe this then you don't even have the economic high-ground.

But a small high level lesson is clearly due, just in-case you attract people who aren't sure.

I can only comment democratic government, so: The government is not responsible for your individual job, your employer is, a government is responsible to make sure you have access to a job, or the ability to create one. After 1 of those requirements has been passed, you pay tax to ensure others can do the same.

Another responsibility of the government is to ensure that the pensions are looked after, probably one of the biggest these days thanks to 'boomers', but they are none the less responsible for it. Thats why the retirement age is decided by government.

Another one they need to look after, trade options, within Europe we're quite lucky, we have a free trade and have all round standards of what we can trade.

Another is infrastructure, if I want to trade a lot, I need infrastructure, if I have a lot of savings; for the people, I will invest in that, thus contributing to all the above.

So: Your question is a joke I guess, mainly because you don't back anything up by your claims.

If you think all you said, lay it out, lets discuss, maybe I'm wrong.

National economies are not households. My spending is your income, and your spending is my income. You can talk about "investment" all you want but without consumer spending there's never any return on that investment and so no one will bother.

Having household savings is good but at a certain point it bottlenecks the economy.

True, but it doesn't seem to really be the problem right now. The overwhelming majority of people don't need to be told to spend money. If they have it, they'll spend it on stuff, for better or worse.

Looking back at the past half century the big variables that have changed to get us here seem to be A) lack of world wars to devastate Europe B) rising automation leading to skyrocketing worker productivity C) society's wealth becoming increasingly concentrated within a billionaire class and D) relatively flat wage growth to spite B. There are also probably a few other's I'm missing too.

TLDR seems like there's a bigger picture to the macroeconomic situation than just spending and saving at the moment. I'm really curious to see how this will shake out going forward.

Apparently Germans do need to be told to spend money.

Spending does't necessarily mean wasting money on short-term consumption. They could also spend on sustainability and infrastructure.

Very generally, my gripe with MMT is maybe it could work if well run. I'm not convinced but let's say it's possible. Next step, can we trust politicions to run the program effectively? I suspect they would always try to squeeze more out than practical that would lead to issues... And that's if it would work in the first place.

I'd like to see some countries try it and prove/disprove, just not mine first.

Hasn't Japan already gone through the course?

What course? Would you say they are running MMT, or just closer to than other countries. They have embraced increased holdings for ~6 years. Def the petri-dish but still seems early days.

> Europe is at their end of Monetary policy

I genuinely wonder why you believe that? Everything points to the status quo.

The ECB is currently at a -0.5% deposit rate. The SNB is at -0.75%. Perhaps there is room to go down, but the banks are struggling and pushing back.

There's always helicopter money, but yeah, the ECB is pretty much near the end of what they can do.

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