Where the money come from?

Originally posted by moorookamick: ↑

Could I ask a question :If those who say that MMT is the answer to our Soverign Debt then why is the Commonwealth paying almost $22 billion a year to service debt(not to mention half that again paid by States & Munis

.https://commodity.com/debt-clock/australia/

Why cant the Commonwealth transfer State & Muni debt to its balance sheet & then via Treasury & the RBA just write off the debt?
Why are taxpayers asked to pay over $30 billion a year interest on combined Governments; debt when and if MMT is correct, that that debt can be wiped out?
To me there is something fishy about MMT: it seems fine once it is not applied and those in power seem to know that it is bullshit; otherwise authorities would apply it now and save taxpayers heaps of interest payments in servicing the debt

.I'm aware that our RBA can print money as required but the global market has the final say, IMO. That is if we print too much currency that its value will go down the gurgle like Zimbabwe or Argentina etc.

Obviously the US has found an out due to the Greenback being the defacto reserve currency with 10s of Trillions abroad hoarded by China ,other central banks and multinationals' tax havens.( $7 Tillion USD held by China & foreign Central banks + God knows how much held byMultinationals' tax havens)

It is interesting hat Trump as been mute about the Multinationals repatriating their tax-evaded stashes from tax havens. Perhaps someone has whispered in his ear that by doing so would snooker the FED's ability to print more Greenbacks to prop-up his Government?PS:

I know that Canada has written off debt 40 years ago but are there current examples where that has been done short of a country's default in payment?

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I don't think even the most dedicated MMT adherent would argue that it is the "answer to our Sovereign Debt".

I did previously argue that since 1974 and the formation of the Bank of International Settlements, central banks have had an agreement not to give money directly to governments. Hence, that is why we have the peculiar arrangement, today, where governments sell bonds on to the private market (usually to private banks) and the central bank will buy that bond back (from the bank) at a higher price - easy money for the banks, is it not?

At the time (1974) it was argued that excessive money in circulation directly caused inflation - that was the rationale for forbidding central banks from buying bonds from governments. And as I have already argued no inflation has been sighted in the last 10 years that the US, UK and Euro (and others) where there has been QE.

The cases of Zimbabwe and Venezuela are favourite examples of hyper inflation, but have you considered the effect that destruction of the economy that occurred due land confiscation in Zimbabwe and that US economic sanctions on Venezuela (and corrupt dictator) might also have been significant? And as for Argentina "printing money", might the behaviour of various military "governments" had some influence as well? Argentina has been lumbered with a neoliberal (which of course proscribes budget surpluses) economic prescription which on the evidence would appear to have been a dismal failure. And where has the hyperinflation gone in Japan after all that money printing? No, inflation is much more nuanced that the mere printing of money.

Some post-Keynesian economists, including MMT would suggest an economy that is under cooked could handle extra economic activity caused by the addition of a few percentage points of "printed money" into non financial business activity such as infrastructure which has an economic return. QE, on the other hand, gives money to the banks and modestly lowers interest rates, but leaves governments with the debt - unless the central bank doesn't require debt payment.