A client hired me to address an article a man by the name of Mike Norman wrote about how debts and deficits don't matter. I was hoping for a cogent argument, but it was so poorly written and so blatantly false, I along with many others couldn't let it go unanswered.
Mike received such a backlash, that he disabled the comments on the article AND put together a response video to his detractors, presenting an equally cogent counter-argument of "you're all just fucking stupid." (the comments are depressing as it shows you just how easily sheeple believe you can print off more money, certainly vote down the sycophants' upvotes)
I find this odd (but confirming) because the man has a masters in economics and 30 years experience. I was hoping to find an argument that I wouldn't necessarily agree with, but at least a cogent one where I could "see where he was coming from." Sadly the "you're fucking stoopid if you don't get this" counter argument confirms my suspicions most people in the economics professor simply don't know what they're doing if this 4th grade "I know you are but what am I" type response is all we get.
Regardless, the video I compiled for my client I think you'll find valuable because it addresses the issue as to whether or not debts and deficits matter. Unfortunately, because it was in response to Mike's article, it was couched in, and therefore has to cut through, all the smoke and mirrors of purist-Keynesian self-delusion in his article. Still, let this be a valuable lesson.
Reserve currency or not.
Central bank printing presses or not.
Borrowing from Bob to pay Bill or not.
All debts, to have value, must inevitably be paid off with the requisite amount of economic production.
And to contend otherwise is simply lying to, and further endebting, younger generations so people today can live off of the children of tomorrow.
Enjoy the decline!
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Mr. Norman has responded with a counter argument (see below) that in intellectual honesty I wanted to share with you all. It's somewhat of a complicated and nuanced argument that for those of you without degrees in economics may not understand. However, I believe this higher level debate has shown some light onto Mr. Norman's position on MMT and hyper inflation. Again, if you don't understand the argument, I can break it down into layman's terms for you. Additionally, I wanted to thank Mr. Norman for further expounding on his position so we can all progress towards a higher understand of economics:
I chortled.Bada-bing,bada-boom!
ReplyDeleteRefer this one to Vox Day's "gamma male principle" as both an example and as a model for the concept being referenced ...
ReplyDeleteHow dare you sully the Secret King with such talk!
Can't you see that the Secret King demands attention?
Better prepare for this sort of thing now -- when the Economic Justice Warriors start to emerge from their Secret Castles, you'll be up to chest height in them ...
[... but canned food and shotguns are always a good survival investment, you can't fault The Smart Gremlin for that logic ...] :-)
Paying debts requires growth. No growth, no solvency.
ReplyDeleteThe real questions to ask are:
1) Why growth matters ?
2) How do we revive growth ?
Hint for question 2, bring back manufacturing.
Actually, there is a way to run deficits without going broke. All a government has to do is not increase the deficit. Each year brings a revenue shortfall, but since the old bonds used to finance the deficit back in the day have come due and are redeemed, the government issues new bonds to replace them. Yes, the interest has to be paid, but as long as rates are low and the government can keep redeeming and re-issuing bonds, the deficit can go on forever.
ReplyDeleteIn this case you might say there is no deficit, since spending and revenue are balanced, but it looks like a deficit because you have to sell bonds to make up for the bonds you redeemed.
This would be the early stage of bankruptcy, like when someone has a lot of credit card debt but can still make the payments. Someone with that habit can't wean himself off the credit teat, though, and, like the US government, will inevitably place himself in a position where the payments can't be made.
Good grief.
ReplyDeleteI fully understand your frustration at not being able to find a worthy opponent. It is indeed aggravating.
I checked out this guy's "The govt paid back $94T last year" video and heard him pitch his course on how to read the Treasury statement ($99). Man, this dude is shameless.
ReplyDeleteThat was a quick read. I stopped after he declared there is no debt and then immediately afterwards that the debt is dollars. Both statements cannot be true. So I took a look at http://search.treasury.gov/search?affiliate=treasury&commit=Search&query=National%20Debt and according to the first result, both of his declarations are wrong. Ergo, he is a lying traitor deserving the Mussolini solution.
ReplyDeleteIncidentally on ballet, ask Herschel Walker. Nothing unmasculine about being a male ballet dancer, that s$&@ is hard.
ReplyDeleteLet's say I have a PNC credit card. I max it out with cash advances, put the cash in my PNC checking account, and then piss it away.
ReplyDeleteUnder Mikey's reasoning, I didn't create any debt for myself since lent it to myself and then spent the money on myself? Also, if I default there won't be any real consequences for me or PNC? Will PNC still be in business if every customer did this?
"Mike received such a backlash, that he disabled the comments on the article AND put together a response video to his detractors, presenting an equally cogent counter-argument of "you're all just fucking stupid."
ReplyDeleteMike sounds like an SJW, since his response is of the same low caliber. Did he also use ad-hominem responses such as "racist / sexist / etc."?
"(the comments are depressing as it shows you just how easily sheeple believe you can print off more money, certainly vote down the sycophants' upvotes)"
How supposedly intelligent people can believe that the government can just print more money without any negative consequences bewilders me; it's an example of the weak-minded who can't believe that that their checking account is overdrawn because they still have more checks that they can write.
It's discouraging how the ignorant have the same right to vote as I do. As someone who has a strong interest in history, I completely understand why the Founding Fathers originally set up our society as a Representative Republic (as opposed to a 'democracy', which they despised) with voting limited to those with a certain amount of land and/or property. They understood that the enormous responsibility of voting should be restricted to those who would vote wisely because they had an investment in the wise and ethical operation of the government.
Even though my degree was in Mechanical Technology, I understand the basics of economics, how inflation works, and how paper money can have a certain 'value' (i.e., it can either be valuable or be valueless). Of course, my interest in History also helps -- just the Confederate States of America and post-World War I Weimar Germany provide excellent lessons in how national economics and inflation affect societies and their political systems.
Thus guy, like pretty much all economists outside of the Austrian School clique, is a Keynesian - i.e.,an adherent of an incoherent and indefensible ideology. He and his ilk have enjoyed the privilege of having their ideology be the king's own for so long that they have not had to defend it and thus are completely disarmed. The pre-adolescent name-calling is the only weapon they have at their disposal.
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