Well, cheers for sticking with it anyway, I really appreciate it.

It's a one hour talk on the deficit in particular, and most of what she says is based on MMT principles that would add another 5 hours to her talk if she were to explain them. With neoclassical economics, you can sort of jump right in, given how they are taught at schools and regurgitated by talking heads and politicians, day in and day out. MMT runs contrary to many pieces of "common sense" and since you can't really give 10 hour talks everytime, this is what you end up with – bits and pieces that require previous knowledge.

I'd offer talks by other MMT proponents such as William Mitchell (UNSW), Randy Wray (UMKC) or Michael Hudson (UMKC), but they are even less comprehensible. Sorry. Eric Tymoigne provided a wonderful primer on banking over at NEP, but it's long and dry.

Since I'm significantly worse at explaining the basics of MMT, I'm not even going to try to "weave a narrative" and instead I'll just work my way through it, point by point.

@notarobot

"Let's address inequality by taking on debt to increase spending to help transfer money to large private corporations."

You don't have to take on debt. The US as the sole legal issuer of the Dollar can always "print more". That's what the short Greenspan clip was all about. Of course, you don't actually print Federal Reserve Notes to pay for federal expenses. It's the digital age, after all.

If the federal government were to acquire, say, ten more KC-46 from Boeing, some minion at the Treasury would give some minion at the Fed a call and say "We need $2 billion, could you arrange the transfer?" The Fed minion then proceeds to debit $2B from the Treasury's account at the Fed (Treasury General Account, TGA) and credits $2B to Boeing's account at Bank X. Plain accounting.

If TGA runs negative, there are two options. The Treasury could sell bonds, take on new debt. Or it could monetise debt by selling those bonds straight to the Fed – think Overt Monetary Financing.

The second option is the interesting one: a swap of public debt for account credits. Any interest on this debt would be transfered straight back in the TGA. It's all left pocket, right pocket, really. Both the Fed and the Treasury are part of the consolidated government.

However, running a deficit amounts to a new injection of reserves. This puts a downward pressure on the overnight interest rate (Fed Funds Rate in the US, FFR) unless it is offset by an increase in outstanding debt by the Treasury (or a draw-down of the TT&Ls, but that's minor in this case). So the sale of t-bonds is not a neccessity, it's how the Treasury supports the Fed's monetary policy by raising the FFR. If the target FFR is 0%, there's no need for the Treasury to drain reserves by selling bonds.

Additionally, you might want to sell t-bonds to provide the private sector with the ability to earn interest on a safe asset (pension funds, etc). Treasury bonds are as solid as it gets, unlike municipal bonds of Detroit or stocks of Deutsche Bank.

To quote Randy Wray: "And, indeed, treasury securities really are nothing more than a saving account at the Fed that pay more interest than do reserve deposits (bank “checking accounts”) at the Fed."

Point is: for a government that uses its own sovereign, free-floating currency, it is a political decision to take on debt to finance its deficit, not an economic neccessity.

"Weimar Republic"

I'm rather glad that you went with Weimar Germany and not Zimbabwe, because I know a lot more about the former than the latter. The very, very short version: the economy of 1920's Germany was in ruins and its vastly reduced supply capacity couldn't match the increase in nominal spending. In an economy at maximum capacity, spending increases are a bad idea, especially if meant to pay reparations.

Let's try a longer version. Your point, I assume, is that an increase in the money supply leads to (hyper-)inflation. That's Quantity Theory of Monetary 101, MV=PY. Amount of money in circulation times velocity of circulation equals average prices times real output. However, QTM works on two assumptions that are quite... questionable.

First, it assumes full employment (max output, Y is constant). Or in other terms, an economy running at full capacity. Does anyone know any economy today that is running at full capacity? I don't. In fact, I was born in '83 and in my lifetime, we haven't had full employment in any major country. Some people refer to 3% unemployment as "full employment", even though 3% unemployment in the '60s would have been referred to as "mass unemployment".

Second, it assumes a constant velocity of circulation (V is constant). That's how many times a Dollar has been "used" over a year. However, velocity was proven to be rather volatile by countless studies.

If both Y and V are constant, any increase in the money supply M would mean an increase in prices P. The only way for an economy at full capacity to compensate for increased spending would be a rationing of said spending through higher prices. Inflation goes up when demand outpaces supply, right?

But like I said, neither Y nor V are constant, so the application of this theory in this form is misleading to say the least. There's a lot of slack in every economy in the world, especially the US economy. Any increase in purchases will be met by corporations with excess capacity. They will, generally speaking, increase their market share rather than hike prices. Monopolies might not, but that's a different issue altogether.

Again, the short version: additional spending leads to increased inflation only if it cannot be met with unused capacity. Only in an economy at or near full capacity will it lead to significant inflation. And even then, excess private demand can easily be curbed: taxation.

As for the Angry Birds analogy: yeah, I'm not a fan either. But all the other talks on this topic are even worse, unfortunatly. There's only a handful of MMT economists doing these kinds of public talks and I haven't yet spotted a Neil deGrasse Tyson among them, if you know what I mean.

Who is this woman and why did I give her an hour of my time?

I listened to the whole thing.

I don't disagree with everything she said. She's right that supply side tricklenomics doesn't really work that well, and she does a good job outlining problems. But the narrative she weaves is all over the place when she starts talking about solutions. "Let's address inequality by taking on debt to increase spending to help transfer money to large private corporations." (I'm paraphrasing.) Increasing debt transfers power to the lender. Will they borrow from big banks? The Rothschilds? China? What's that quote? "Permit me to issue and control the money of a nation, and I care not who makes its laws."

And "lets pay our debts by just printing more money." What kind of solution is that? The Weimar Republic called. They'd like to have a word with you about hyper-inflation.

And her "angry birds" analogy was insufferable.

I got yer angry bird right here. I got two of em, yous sons of bitches.

Excellent talk indeed. Stewart Lee called Twitter 'a Stasi for the Angry Birds generation.'

"there has to be something only i am capable of" ?? Yeah, angry birds.

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le *dupeof=http://videosift.com/video/The-Angry-Birds-Movie-Official-Teaser-Trailer

Hey chicchorea,

You're a high-quality Sifter and you do a lot for the community, so if you think I'm harming VideoSift, you don't have to try to ban me, I'll go away willingly. If you don't mind, please tell me how I can delete my account and I'll do so ASAP.

As for having the same username as the guy in the videos on the Angry Birds boards, I tend to get obsessive over things and I have a lot of social anxiety, so I frequently will use the usernames of people I like on other sites (I don't know why, but it makes me feel less anxious about posting). When I started getting into his videos, I probably saw a post of his somewhere else and took his name. I don't know for sure, it's hard to remember three years ago, but posting his videos has been an obsessive tendency of mine for a while now, so it's likely.

I'm not telling you this as an excuse. I'm not trying to get out of anything and I definitely won't be posting on VideoSift anymore, but I just want you to know where I'm coming from since you're a good Sifter.

So, yeah, please tell me how to delete my account (or feel free to pursue banning me with the mods if you prefer - I won't fight it) and I'll take care of that today.

Thanks for all of your contributions to VideoSift and I'm sorry that I've upset you.

*ban

User's / Member's / Serial Self Linker's Picture half way down the page w/ vid in an April 2011 comment identifies member in member's submissions here @ the Sift in which he himself performed:

http://www.angrybirdsnest.com/forum/discussion/1/welcome-to-our-new-angry-birds-forum/p1

Member is showcased in the preponderance of the vids @ YT acct, https://www.youtube.com/channel/UCUdEs4NQ6cmHtkMiMrzDsGA, the videos of which are heavily represented in members submissions at the Sift as well as at several other sites(eg., http://redundantagain.blogs.abum.com/, http://www.buzzfeed.com/redundantagain, http://slowrobot.com/redundantagain/submissions/, http://9gag.com/u/redundantagain/posts)

They are also masters of Angry Birds Space. They get all the stars every time.

Tags for this video have been changed from 'Base Jump, Thrill Seeker, Catapult, Parachute, angry birds' to 'Base Jump, Thrill Seeker, Catapult, angry birds, tancrede melet, flying frenchies' - edited by Eklek

Promoting this video back to the front page; last published Thursday, October 23rd, 2014 2:30pm PDT - promote requested by lucky760.

Tags for this video have been changed from 'Base Jump, Thrill Seeker, Catapult, Parachute' to 'Base Jump, Thrill Seeker, Catapult, Parachute, angry birds' - edited by lucky760

Returning this video from Sift Talk - return requested by lucky760.

Hey why'd you ban this guy? I LOVE angry birds! If you go my shop it's even better though. Just saying. poolcleanersupplies.com