Good solid piece. Whether is the US, UK or even Europe its truly unfortunate that austerity is being embraced so much. We need to wake up and realize how devastating that word can be and the nations who are use the Euro can read this piece too as to how important it is to have your own currency and not be forced to accept balanced budgets and/or budget surpluses. Thanks for spreading the word out on this.
What is with all these austerity ideologues? Have the programs of near starvation of govt programs ever worked any where? Mention the word 'spend' and it strikes fear into everyone. Just like the imposition of deep cuts to fund govt service agencies in the US and huge worker layoffs are more likely to harm than lead to any so-called efficiency. Quite the opposite. This austerity, indeed, is undermining Democracy. It seems like it is doing the same thing in EU with its rise in extreme right wing political parties competing for control.
I will have to reread your essay to fully grasp exactly how the Eurozone econ system works because I was a little confused on the use of some of the terms and what they were referring to. As usual, I will go to other sources to try to better understand.
Hi Sandra, thanks for your comment. If you tell me the terms that you find confusing I will tell you what they mean. You will find my 4 part MMT jargon buster via a link at the top of each page. :-)
I guess to start with is first sentence in the sectoral balance section: private sector =businesses?, govt sector = reserve bank?, foreign sector= trade??.
I get the deficit/surplus thing. Probably just me but I had to read that whole paragraph several times to try to understand these sectoral references.
The private sector includes households and businesses that earn, spend, save, and invest, separately from the government. Government sector includes the Central Bank - Central bank reserves are the balances commercial banks hold in their accounts at the central bank, used for interbank payments and regulatory purposes. The foreign sector refers to all economic transactions between a country and the rest of the world. Including difference between exports and imports of goods and services; financial transactions between domestic and foreign entities; dividends, and interest payments between countries.
Thanks for clarifying. I kinda thought that is what these referred to. Thanks for the link.
Look forward to your next MMT 101 lesson. (I like to refer to MMT not as "theorists" but as a modern monetary economic school of thought. The minute "theory" is mentioned people tune you out.)
Good solid piece. Whether is the US, UK or even Europe its truly unfortunate that austerity is being embraced so much. We need to wake up and realize how devastating that word can be and the nations who are use the Euro can read this piece too as to how important it is to have your own currency and not be forced to accept balanced budgets and/or budget surpluses. Thanks for spreading the word out on this.
Thanks Michael.
You're welcome
What is with all these austerity ideologues? Have the programs of near starvation of govt programs ever worked any where? Mention the word 'spend' and it strikes fear into everyone. Just like the imposition of deep cuts to fund govt service agencies in the US and huge worker layoffs are more likely to harm than lead to any so-called efficiency. Quite the opposite. This austerity, indeed, is undermining Democracy. It seems like it is doing the same thing in EU with its rise in extreme right wing political parties competing for control.
I will have to reread your essay to fully grasp exactly how the Eurozone econ system works because I was a little confused on the use of some of the terms and what they were referring to. As usual, I will go to other sources to try to better understand.
Hi Sandra, thanks for your comment. If you tell me the terms that you find confusing I will tell you what they mean. You will find my 4 part MMT jargon buster via a link at the top of each page. :-)
I guess to start with is first sentence in the sectoral balance section: private sector =businesses?, govt sector = reserve bank?, foreign sector= trade??.
I get the deficit/surplus thing. Probably just me but I had to read that whole paragraph several times to try to understand these sectoral references.
The private sector includes households and businesses that earn, spend, save, and invest, separately from the government. Government sector includes the Central Bank - Central bank reserves are the balances commercial banks hold in their accounts at the central bank, used for interbank payments and regulatory purposes. The foreign sector refers to all economic transactions between a country and the rest of the world. Including difference between exports and imports of goods and services; financial transactions between domestic and foreign entities; dividends, and interest payments between countries.
There's an explanation of sectoral balances in my Jargon Buster part 4: https://mmt101.substack.com/p/mmt-economics-jargon-buster-part-c17
Also read Wynne Godley in relation to sectoral balances. https://mmt101.substack.com/p/important-figures-in-the-development-d26?r=3r8qcn
Thanks for clarifying. I kinda thought that is what these referred to. Thanks for the link.
Look forward to your next MMT 101 lesson. (I like to refer to MMT not as "theorists" but as a modern monetary economic school of thought. The minute "theory" is mentioned people tune you out.)