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The RBA has not yet monetized any debt, and does not see the...

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MMTBeagle

21 Posts.

18/08/20

23:27

Post #: 46638772
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Originally posted by CafeCafe: ↑

The RBA is also on record as saying real help to economy must come from fiscal spending (and that is an MMT idea)
"Mr Lowe: "....What gets people back into work is the fiscal spending. I agree with you that that is something we should be looking at—how much fiscal spending we have to get people back into work. I think where we disagree is on how that should be financed...."

So it comes down to Debt Monetization by RBA vs Debt Issuance via Treasury (AOFM). Debt issuance is govt extracting money from economy to offset inflationary effects of spending. This is why RBA supports continuation of this method. Debt monetization is inflationary because it does not have this money removal effect - thus rejected by RBA. MMT argues inflation is not a concern at this stage as productive resources are greatly underutilized.The main thing MMT wishes to clarify is that the govt doesn't need to 'borrow', in the conventional sense, in order to finance spending, Under present system govt 'borrows" to offset inflation and balance books. Spending = Revenue + Debt

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The RBA has not yet monetized any debt, and does not see the need to do so in the foreseeable future.
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