MMT—Modern Monetary Theory—supporters claim that “printing” dollars enables huge expenditures and makes excessive debt irrelevant.
MMT might be nonsense, but so are most of the current central bank policies and practices. If central banking and economic policies were sensible and effective, how did the United States (and world) sink into such a deep financial hole?
Indulging in fantasy accounting, delusional economics and speculation, we suggest…
Mortgage relief: The Treasury should issue vouchers that reduce mortgages (mostly government agency loans) on single-family homes by half. Individuals mail the vouchers to their lenders who cut their outstanding balance in half – non-taxable – and paid by the Treasury. Home owners will feel wealthier and less overwhelmed.
Student Debt: Current and former students are drowning in student loan debt. Use similar vouchers to reduce student loan debt by two-thirds. Debtors will mail the voucher to their loan administrator and receive a non-taxable debt reduction. Student loan payments decrease.
Credit Cards: Apply similar vouchers for credit card debt that reduces it by half, also non-taxable. People will spend more and boost the retail economy.
Income Taxes: Americans, like many others, pay too much in taxes and need more spendable income. The IRS should refund 100% of taxes paid by individuals for tax years 2016 and 2017. Most people will spend the refunds on consumer goods and stimulate the non-financial economy. Politicians will be heroes.
Universal Basic Income: Encourage Americans to apply for a UBI through the Social Security Administration. No social security number – no UBI! This UBI will put extra currency into circulation and stimulate the economy.
IN FAVOR OF MAGIC MONEY TREE PROGRAMS:
1) These programs will offer needed debt relief to individuals. The Federal Reserve provided $ trillions to bail out banks in the past decade. However, the above debt relief programs will directly help individuals, which is fair considering the banker bailouts.
2) Corporations and the wealthy received the Trump tax breaks. The government should now aid the bottom 90% of Americans.
3) With less debt individuals, will spend more and increase savings, both of which will benefit the economy.
4) Dollars are backed by nothing and have value only because we believe they have value. The banking cartel creates $trillions each year from “thin air.” The above MMT programs do for the individual what the banking cartel does for bankers.
5) People will love these programs and politicians can promise something for nothing to buy votes.
ARGUMENTS AGAINST MAGIC MONEY TREE PROGRAMS:
1) The programs aren’t fair. Some people benefit more than others, but our current system is also unfair. Nothing new here.
2) Who pays for these programs? Nobody directly pays, the money is created (like now) but fed into the economy through individuals, not the banks. Helicopter money! We pay via inflation.
3) It will increase consumer price inflation. Yes, but the current financial system is already inflationary, which someday will require a reset.
4) The political and financial elite don’t receive a payoff from these programs. Correct—the programs must be tweaked to feed dollars into the hands of the elite, or they’ll block the programs. Bring on the lobbyists…
5) People might realize that dollars are fake money when trillions are created from nothing and used to reduce individual debt. (However, facing the truth is good.)
For perspective on Washington D.C. and Wall Street, we listen to wisdom and wit from Bill Bonner
“We look at the passing parade in Washington through a cynical lens…
No situation is so hopeless… so absurd… or so disastrous that the feds can’t make it worse. No policy is too stupid… too counterproductive… or too corrupt that it can’t become the law of the land.
And no man is too craven… too degenerate… or too much of an imbecile to be disqualified from public office.”
The public officials described above make the rules and will create more debt, larger deficits, and possibly use MMT. Are you prepared for the ugly consequences?
- MMT or Modern Monetary Theory or Magic Money Tree economics may be an excuse for free-spending politicians.
- However, dire consequences will besiege us if we continue current central banking and debt policies. Which will be worse, current policies or MMT?
- With or without MMT programs, the U.S. is spending itself into an economic disaster. Increasing consumer price inflation, continual devaluation, and exponentially increasing debt are the best-case scenarios.
- Under those best-case scenarios, we should own silver, gold and hard assets to insure our savings, retirement, and purchasing power.
- Under far worse scenarios, we must own silver and gold to protect ourselves from what our politicians, delusional programs, central bankers, and predatory government will do to increase their revenues.
sells silver and gold. Call 1-800-822-8080 and tell them you agree with the Deviant Investor about silver, devaluations and delusional programs.
Hoping for a return to economic, financial and political sanity…