Modern Monetary Theory (MMT) Love it or Hate it - it's not going to go Away!, 46607423, page-23 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by moorookamick: ↑

https://www.bloomberg.com/news/articles/2020-03-26/australia-s-qe-program-shows-signs-of-success-in-first-week

Current Government debt hasn't got a ghost of a chance of being repaid for at least a generations and the RBA's revolving QE door is simply a Claytons: a money printing loophole with gig economy characteristics like Government money laundering!

QE is designed a slight of hand which cuts private banks in to the "joke" by giving them a small commission on Billions for being the money launderer but as time goes on, they cant kid all the people all the time!

MMT only says that a Soverign cant go broke by printing unlimited amounts of currency but of course that does not include its citizens.
Zimbabwe tried MMT and it was a disaster for Zimbabwean nationals. The arguement is that Zimbabwe did not use its printed money to
build infrastructure but instead it doled it out to its crony citizens.

Since 2008 we have not used our accumulating debt to build lasting infrastructure (with 5G, one could not say that the NBN is enduring infrastructure) and of course our $300 billion Government hand outs recently are far from being used as Nation Building.

IMO, time will tell.

All we need now is an escalation of Chinese import bans to hit our plumb iron ore, coal & gas exports and the ass will properly fall out of the AUD, IMO, and just imagine what that will do to our import pricing?

At present GenX/Y have spent their 2x $10K traunches of Super drawdowns on Cars, 4x4s & Utes TVs etc (which has propped up the car industry from late April to the end of July) and now that that show is over, car dealers & some retailers are now virtually idle.

I know that common logic says that recessions cause asset devaluation rather than inflation but our increased dependance on imports and the
uncertain value of our AUD is much different this time around and IMO makes stagflation a reasonable prospect and even if the value of iron ore ,
coal & LNG rises due to a devaluation of the AUD, their profits are narrowly distributed with most going overseas because of foreign ownership.

And the wealthy, rather than investing in business infrastructure now are going to cash in anticipation of the "Firesale" later.

ALL IMO only.

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After the COVID-19 pandemic is contained, and the economy recovers, what does MMT suggest be done about the debt?

IYO, what do you suggest be done about the debt?

MMT does not have the ear of the LNP Coalition government, and it is unlikely to have the ear of a Labor government it that is the outcome after the next election. The RBA will remain independent and responsible for monetary policy. Some fiscal policies will change, but monetary policy will continue to be determined by the RBA with the same institutional framework and constraints that exist now. Which means that the government will still not be able to 'print money' for the foreseeable future. The RBA is the only entity in Australia that can do that, but it has made it clear that it foes not anticipate any need to do so. It will remain the same that the government faces a financial constraint, even if the RBA is prepared to implement QE. The government cannot allow the balances in its accounts at the RBA to fall below zero. (It can call upon an overdraft facility with the RBA, but that is only temporary.)

MMT is on the public record as stating that it does not intend to seek government. It will advise. But the likely role it will have for the foreseeable future is the role that it has now: an irrelevant and quirky economic self-indulgence of a small group of enthusiastic progressives.

It may change attitudes to deficit and debt, but the only contribution that it is likely to make to economic theory and policy is the design and implementation of a Jobs Guarantee Scheme to eliminate involuntary unemployment, and if it can, that will be no small achievement.

With or without MMT, the question that needs to be answered after COVID-19 has been contained, and hopefully eradicated, what can be done and what should be done about the debt that will have accumulated by the time we get to that point?