#mmt — Public Fediverse posts
Live and recent posts from across the Fediverse tagged #mmt, aggregated by home.social.
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Best and clearest explanation of Govt #Bonds that I have ever read, it’s from Prof Richard Murphy’s blog (at taxresearch.org,uk ).
” Governments do not borrow because they need money. The government spends first. In doing so, it creates deposits and reserves within the banking system. Taxation then removes some of that money from circulation in the economy. What is left, the deficit, is simply the money that the government has spent but has not yet taxed back.”
“{…} anyone buying a newly issued gilt or government bond does not provide the government with spending power that it previously lacked. Instead, the purchaser exchanges one government liability for another.”#Economics101 #MMT #GovtBonds #BondMarkets #QuantitativeTightening and #QuantitativeEasing #ReserveBank #CahsRate #BondInterest
My understanding of the above:
A Bond is like the govt giving me an IOU against some of its own currency I exchange for it with a guaranteed repayment in 10 yrs time at set interest. In effect the govt has just removed cash from the economy (fiscal policy) by sequestering it in the IOU (it does this to cool an overheating economy).
I am not allowed to ‘spend’ that IOU, but I can #Trade it for a quick profit (if I can find a buyer). Or, I can use the IOU to secure a loan which I can then spend or invest. Economic activity is thus generated without the govt injecting money (spending) into the economy (it would normally spend to stimulate a flagging economy).
In Australia, Govt bonds are issued by the Reserve Bank (responsible for monetary policy to keep inflation in check and a determined level of unemployment). It can vary the interest rates of these bonds and set the official cash rate to steer the economy where it thinks it ought to be (neo-classical economics here).
So the selling of Govt bonds is not ‘borrowing’ at all just a means to control the amount of cash currency in the economy to keep it bubbling along some predetermined parameters. There is a lot more to this ‘control’ and Murphy addreses it in the article and in the process gives us one of the primary features of the Modern Money Theory (MMT).
I think I have that right. Happy to get corrected.
Read more:
https://www.taxresearch.org.uk/Blog/2026/06/30/what-gary-stevenson-got-wrong-on-bonds/ -
@BlumeEvolution "Geld hat man zu haben." soll schon das Reichsgericht gesagt haben. Das ist jedenfalls ein unter Juristen weit verbreiteter Glaubenssatz. - Tatsächlich ist allerdings das Wissen über Geld in großen Teilen der Bevölkerung dermaßen gering ausgeprägt, dass man sich wundert, wieso die meisten Menschen zwar gern mehr Geld haben würden, jedoch überhaupt nicht wissen, wie Geld funktioniert. #mmt #fiatgeld #zentralbank #digitalereuro #giralgeld #buchgeld #cryptocurrency
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Pluralistic: Daily links from Cory Doctorow – No trackers, no ads. Black type, white background. Privacy policy: we don't collect or retain any data at all ever period. [Unofficial] @[email protected] ·Pluralistic: How to fix the UK housing crisis (13 Oct 2025)
https://web.brid.gy/r/https://pluralistic.net/2025/10/13/castles-not-assets/
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@sp6ina Ale wiesz, że budżet państwa nie działa tak samo jak budżet domowy? Deficyt budżetowy sam w sobie jeszcze nie jest problemem, jeśli państwo ma wiarygodność u tych, od których pożycza pieniądze.
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15 min
I love Wolff for his economic history, but this is complete cringe. China selling t-bills means they are soaking up dollars off the global markets or US. They can sell those dollars to countries laboring under dollar denominated debt. If they don’t, they will precipitate a default crisis for those nations. It would also to be a move to transition the global south to seek loans from China.
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Jul 22
6 min
The distinction between countries that experience debt crisis and those that don't
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4 min
Fiat sovereign money creation v bank credit.
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If you got through that one alright, you might like this analysis of #price pressures throughout 2021 is then provided by examining #supply chains, #industry specific #shocks, and #market #power by
@[email protected]#Inflationary Pressures in the Time of Covid-19:
#MMT as a Theory of Inflation