Eric Tymoigne

Thread The CBO is at it again with its new Primer on the Federal Debt cbo.gov/system/files/2… Below is a thread but for a fully developed counter argument see this: tandfonline.com/eprint/RBIF35M…

But how are we paying for this? We have no money, bond vigilantes don't want to lend to us, we are bankrupt. At least that what, we were told when we proposed to do medicare for all, student-debt relief, green new deal, etc. It does not apply now? I am confused.

@tblrj Yep

@tymoignee Peace is War and Love is Hate.

The opposite is true : “Our single currency, the euro, has strengthened the monetary sovereignty of Europe area countries.” Piero Cipollone bis.org/review/r260217…

We have a new paper on the effects of fiscal consolidation in EU countries. Fiscal consolidations lower real output, raise the unemployment rate, increase income inequality, and reduce inflation. Contractionary effects are stronger during recessions than in non-recession periods.

@wgoggin Right.

@tymoignee The Eurozone nations are still “users" of the currency rather than "issuers,” no?

Our research suggests monetary policy is less effective in reducing inflation than conventional wisdom suggests. Needed: realistic expectations about what can be achieved + broader mix of instruments (fiscal, industrial, competition) to ensure price stability at a reasonable cost

@HenricCont @AusMMT Daire’s “Economistes Financiers du XVIIIe siècle.” The reference for Law in the wp.

@tymoignee @AusMMT There is no “Compendium” cited. Can you send source?

John Law is the true intellectual founder of bitcoin: “if everyone was forced to take it, it might never return, and so its issuer would never be required to redeem it.”

@HenricCont @AusMMT I know. I read the thing. You’ll find the full letter of Law in the compendium cited in the wp

@tymoignee @AusMMT

@HenricCont @AusMMT Just no. Also note that Dutot was a colleague of Law at the bank.

@tymoignee @AusMMT No, this passage was not written by John Law. It comes from Réflexions politiques sur les finances et le commerce (1738) by Nicolas Dutot (also sometimes referred to as Charles Dutot or Nicolas Dutot; born c. 1684–1741).

@HenricCont @AusMMT You’ll find it here on page 78 in the section regarding the historical debate about forced (non-reddeemable) vs free (redeemable) currency levyinstitute.org/wp-content/upl…

@tymoignee @AusMMT Sure, show us the reference

@HenricCont @AusMMT Come on. Do better. If you want the reference just ask.

@tymoignee @AusMMT

@HenricCont @AusMMT Darren got it. This was written in 1720 in letters to defend his system.

@AusMMT @tymoignee John Law actually made a MMT point. That tax can drive the value of money.

@Tommy_Hoare I am not familiar enough to give you proper references

@tymoignee do you have any reading recommendations for Byzantine monetary history? I’m trying to understand how their state surpluses were achieved and what role the different monetary instruments played in Byzantine economic history.

@GeorgeSelgin That is the point of Law here. Not being redeemable is ideal. We are stuck with them.

@tymoignee Except that Bitcoins aren’t redeemable claims to anything, and no one is forced to take them (except, briefly, some merchants in El Salvador).

@tonywestonuk So not only is it a huge resource waste, ecological nightmare and a vehicle for frauds, but also the monetary foundations upon which it rests are unsound.

@tonywestonuk The term fair price refer to financial value, think fair price of a security. In some way it reminds me more of what John Law thought was ideal: “if everyone was forced to take it, it might never return, and so its issuer would never be required to redeem it”

Just a quick reminder. Fair price is zero. This thing is running on self-fulfilling vibes and suspended disbelief. neweconomicperspectives.org/2013/12/fair-p…

@MaxJerneck I’ll give you a “mostly”🙂. The post adds all these other stuff.

@tymoignee Not true, it can be used for criminal activity and to pay ransom for kidnapped relatives

@wbmosler Right. SC have at least a fair price that is par, but whole range of other problems are propping up from unregulated leveraging, loose underwriting standards, non integrated payments systems, illiquid reserves, etc.

@tymoignee It's also has a bid from criminal elements that may be shifting to stablecoins