The MMT Podcast with Patricia Pino & Christian Reilly
#157 Key Insights, Leading Thinkers, Vital Economics - with Prue Plumridge, Claire Jackson-Prior, Neil Wilson and Phil Armstrong
Podcast summary created with Snipd AI
Quick takeaways
- Government spending is managed efficiently through the power of the purse and authorized payments system.
- Understanding MMT challenges mainstream economic narratives and informs advocacy for socio-economic transformations.
- Foreign exchange market stability and interest rate complexities influence effective economic governance in a global context.
Deep dives
Understanding Government Spending in Modern Monetary Theory
Government spending is determined by the power of the purse, enabling the government to decide on expenditures. The Treasury authorizes spending outlined in supply estimates, leading to an Appropriations Act approving the budget. Departments execute purchases, and upon receiving invoices, the Treasury ensures authorized payments through the Bank of England, demonstrating how government spending is managed efficiently.
The Significance of Modern Money Knowledge for Social Progress
Understanding Modern Money Theory (MMT) is crucial for grasping the government's role as a currency issuer and its distinctive spending mechanism different from household budgets. With this knowledge, individuals can challenge misinformed mainstream economic narratives, recognize the impact of government spending policies on daily life, and advocate for equitable socio-economic transformations.
Navigating Foreign Exchange Markets and Interest Rates
Foreign exchange markets react to government actions but tend to stabilize as speculators buy back currency after adjustments. Interest rate manipulation and its effects on inflation are debated, highlighting the complexities of traditional economic approaches. In a global context, understanding the interplay between interest rates, inflation, and currency value is essential for effective economic governance.
Analysis of Taxation and Government Provisioning
The podcast delves into the intricate relationship between taxation and government provisioning. It emphasizes that taxation is a vital but secondary factor in the economic system, serving as a hygiene factor that ensures necessary resources for the public sector. Taxation's primary purposes are seen as releasing resources for public sector employment and driving the circulation of the currency. The episode highlights the complexity and the political choices involved in tax policies, advocating for a clearer understanding of tax incidence and salience to create an effective and equitable tax system.
Focus on Resilience and Efficiency in Economic Systems
The discussion shifts towards the importance of balancing resilience and efficiency in economic systems. It argues against the predominant focus on efficiency under neoliberalism, citing potential brittleness in systems that prioritize efficiency over resilience. Emphasizing the trade-off between efficiency and resilience, the episode suggests that an optimal balance is crucial for sustainable economic structures. The conversation underscores the necessity of prioritizing resilience and self-sufficiency to ensure stability, especially in facing challenges such as pandemics or supply chain disruptions.
According to multi award-winning economist Professor James K. Galbraith, the new book, “Modern Monetary Theory: Key Insights, Leading Thinkers” is ‘a landmark in the development of MMT, a boon for “useful” economists - and a profound challenge to all the others.’
Patricia and Christian talk to the architects of this collaboration of leading experts about how governments spend, why it matters, and why moving beyond our culture’s deeply-held but incorrect assumptions about money and its purpose is now key to human survival.
Please help sustain this podcast!
Patrons get early access to all episodes and patron-only episodes: https://www.patreon.com/MMTpodcast
Order the Gower Initiative’s “Modern Monetary Theory - Key Insights, Leading Thinkers” (2023) here: https://www.e-elgar.com/shop/gbp/modern-monetary-theory-9781802208085.html
For an intro to MMT:
Our first three episodes: https://www.patreon.com/posts/41742417
Episode 126 - Dirk Ehnts: How Banks Create Money: https://www.patreon.com/posts/62603318
All our episodes in chronological order: https://www.patreon.com/posts/43111643
All our episodes with Phil Armstrong: https://www.patreon.com/posts/42072846
Relevant to this episode:
The Gower Initiative For Modern Money Studies website: https://gimms.org.uk/
Our interview with Deborah Harrington (a founding member of GIMMS) Episode 96: The Fight For The NHS: https://www.patreon.com/posts/49819223
“Diagrams & Dollars” by JD Alt: https://neweconomicperspectives.org/2014/01/diagrams-dollars-modern-money-illustrated-part-1.html
Professor Stephanie Kelton’s “Angry Birds” presentation: https://youtu.be/Q1SMjeuyF-Y
“Billy Blog” — Professor Bill Mitchell’s blog: http://bilbo.economicoutlook.net/blog/
Our episodes featuring Bill Mitchell at UK Labour conference events in 2019: Episode 31(a): MMT And The Labour Party: https://www.patreon.com/posts/30204508
Episode 34: MMT And The Green New Deal: https://www.patreon.com/posts/30429854
“An Accounting Model of the UK Exchequer” by Neil Wilson, Andrew Berkley and Richard Tye: https://gimms.org.uk/2021/02/21/an-accounting-model-of-the-uk-exchequer/
Our interview with the authors of “An Accounting Model of the UK Exchequer”:
Episode 84 (Part 1): https://www.patreon.com/posts/46352183
Episode 86 (Part 2): https://www.patreon.com/posts/46865929
Episode 155, where Phil Armstrong talks briefly about his chapter in “Modern Monetary Theory: Key Insights, Leading Thinkers”: https://www.patreon.com/posts/77409078?pr=true
Professor John T. Harvey’s lecture on MMT and exchange rates - Episode 145: What Determines Currency Prices?: https://www.patreon.com/posts/72283811?pr=true
Warren Mosler’s “7 Deadly Innocent Frauds Of Economic Policy”: http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
Quick MMT reads:
Warren’s Mosler’s MMT white paper: http://moslereconomics.com/mmt-white-paper/
Steven Hail’s quick MMT explainer: https://theconversation.com/explainer-what-is-modern-monetary-theory-72095
On government debt: “Some Numbers Are Big. Let Me Help You Get Over It”: https://christreilly.com/2020/02/17/some-numbers-are-big-let-me-help-you-get-over-it/
For a short, non-technical, free ebook explaining MMT, download MMT founder Warren Mosler’s “7 Deadly Innocent Frauds Of Economic Policy” here: http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
Episodes on monetary operations:
Episode 20 - Warren Mosler: The MMT Money Story (part 1): https://www.patreon.com/posts/28004824
Episode 126 - Dirk Ehnts: How Banks Create Money: https://www.patreon.com/posts/62603318
Episode 13 - Steven Hail: Everything You Always Wanted To Know About Banking, But Were Afraid To Ask: https://www.patreon.com/posts/41790887
Episode 43 - Sam Levey: Understanding Endogenous Money: https://www.patreon.com/posts/35073683
Episode 84 - Andrew Berkeley, Richard Tye & Neil Wilson: An Accounting Model Of The UK Exchequer (Part 1): https://www.patreon.com/posts/46352183
Episode 86 - Andrew Berkeley, Richard Tye & Neil Wilson: An Accounting Model Of The UK Exchequer (Part 2): https://www.patreon.com/posts/46865929
Episodes on inflation:
Episode 7: Steven Hail: Inflation, Price Shocks and Other Misunderstandings: https://www.patreon.com/posts/41780508
Episode 65 - Phil Armstrong: Understanding Inflation: https://www.patreon.com/posts/40672678
Episode 104 - John T Harvey: Inflation, Stagflation & Healing The Nation: https://www.patreon.com/posts/52207835
Episode 123 - Warren Mosler: Understanding The Price Level And Inflation: https://www.patreon.com/posts/59856379
Episode 128 - L. Randall Wray & Yeva Nersisyan: What’s Causing Accelerating Inflation? Pandemic Or Policy Response?: https://www.patreon.com/posts/63776558
More on government bonds (and “vigilantes”):
Episode 30 - Steven Hail: Understanding Government Bonds (Part 1):https://www.patreon.com/posts/29621245
Episode 31 - Steven Hail: Understanding Government Bonds (Part 2): https://www.patreon.com/posts/29829500
Episode 143 - Paul Sheard: What Is Quantitative Easing?: https://www.patreon.com/posts/71589989?pr=true
Episode 147 - Dirk Ehnts: Do Markets Control Our Politics?: https://www.patreon.com/posts/episode-147-dirk-72906421
Episode 144 - Warren Mosler: The Natural Rate Of Interest Is Zero: https://www.patreon.com/posts/71966513
Episode 145 - John T Harvey: What Determines Currency Prices?: https://www.patreon.com/posts/72283811?pr=true
Job Guarantee episodes:
Episode 4 - Fadhel Kaboub: What is the Job Guarantee?: https://www.patreon.com/posts/41742701
Episode 47 - Pavlina Tcherneva: Building Resilience - The Case For A Job Guarantee: https://www.patreon.com/posts/36034543
Episode 148 - Pavlina Tcherneva: Why The Job Guarantee Is Core To Modern Monetary Theory: https://www.patreon.com/posts/episode-148-why-73211346
Pavlina Tcherneva’s Job Guarantee FAQ page: https://pavlina-tcherneva.net/job-guarantee-faq/
MMT Events And Courses In 2023
Apply for Professor Bill Mitchell’s short, free online course in Modern Monetary Theory (February 15th - March 14th) here: https://www.edx.org/course/modern-monetary-theory-economics-for-the-21st-century
More information about Professor Mitchell’s MMTed project (free public online courses in MMT) here: http://www.mmted.org/
Tickets to the very first Scotonomics festival (online or in-person, Dundee, Scotland 24th-26th March) are available here: https://scotonomics.scot/live-events/
Apply for Dr Dirk Ehnts’ Modern Monetary Theory and European Macroeconomics course at Maastricht University (July 31st - August 4th) here: https://maastricht.dreamapply.com/courses/course/183-modern-monetary-theory-and-european-macroeconomics
Details of Modern Money Lab’s online graduate and postgraduate courses in MMT are here: https://modernmoneylab.org.au/
Extensive list of MMT scholarship compiled by New Economic Perspectives: http://neweconomicperspectives.org/mmt-scholarship
MMT Academic Resources compiled by The Gower Initiative for Modern Money Studies: https://www.zotero.org/groups/2251544/mmt_academic_resources_-_compiled_by_the_gower_initiative_for_modern_money_studies
A list of MMT-informed campaigns and organisations worldwide: https://www.patreon.com/posts/47900757
We are working towards full transcripts, but in the meantime, closed captions for all episodes are available on our YouTube channel: https://www.youtube.com/channel/UCEp_nGVTuMfBun2wiG-c0Ew/videos
Show notes: https://www.patreon.com/posts/78408355?pr=true
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