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Article Explaining Why Ron Paul is Wrong

Someone on youtube recommended this to me. I read it, and some of it reads unclear, so I wanted to pass it on and get your views on this as well. I trust there are good patient people in this forum with the will to read arguments that go against their beliefs, internalize them and give articulate reason to agree, disagree, and correct themselves or the article.

http://hir.harvard.edu/debt-deficits-and-modern-monetary-theory



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The problem with MMT and most

The problem with MMT and most schools of economics is that they aren't very careful with their methodology. Economics to them is a positive science instead of a normative one.

Also when it comes to their models, there is a term for it GIGO "Garbage in, Garbage out". Even the best most sophisticated models have not managed to perform better than chance alone in terms of predictive ability.

Ron Paul's economics stresses normative statements about the economy. Think how often Ron uses the phrase "ought to".

The very roots of MMT and other such schools are rotten. How can we expect their conclusions to be right?

"My theories explain, but cannot slow the decline of a great civilization. I set out to be a reformer, but only became the historian of decline."
- Ludwig Von Mises

In addition

These guys always mock Paul Krugman for not keyesian enough.
So be sure you know where they come from

I wrote a long comment...

...explaining where this article is DEAD WRONG, but somehow it didn't get onto the site. I don't know if it was an act of censorship or just my piece of crap computer's fault, but I lost the comment somehow...and I really don't feel like re-typing it.

Besides...

I just realized that refuting their argument is much simpler than listing all of the false statements and explaining why they are false. All you have to say is this...

"Look around the world and you'll see how MMT works. People are unemployed, losing their assets and there is rioting in the streets."

It's just working fantastic, huh?

There are some interesting

There are some interesting theories, however.

"What you can understand from that is that budget deficits, independent of any monetary operations, drive interest rates down, not up. This is the complete opposite of what orthodox economists claim is the case, and it’s confirmed by the present combination of record low interest rates and very large budget defecits."

"In saying that, however, we would also stress that inflation is the risk of any kind of overspending, whether investment, consumption, export, or government spending. Any component of aggregate demand could push the economy to that point where we get inflation. Excessive government spending is not always to blame."

I agree with this.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

This article is very vague

This article is very vague and deceptive. For example:

"If you look back through history and examine discussions in various government documents"

Which documents? Are we just supposed to take your word for it?

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

Could not finish reading this nonsense.

They start by saying the debt crisis is a "non-issue" and goes downhill from there. Well written balderdash, but balderdash none the less.

MMT is a cult, is Marxism on steriod

Just take look at its most important assumption. Government, as currency issuer, has unlimited revenue. Now, you can stop reading all the rest nonsense from here. Because it is not so hard to figure out implications of this notion:

1. Government has unlimited ability to tax you and your children.
2. Government can create infinite inflation.
3. You have no ownership of your proprieties because government can confiscate though 1 and 2.
4. Every man and woman work for government directly and indirectly.

So, you know, these people are completely against our principles, and against free society. They may not admit it, but it is not unreasonable to call them commies. They are not even subtle. One of prominent MMTers named his blog "The Great Leap Forward", I doubt he doesn't know that although TGLF, initiated by Mao, led to stunning GDP growth on paper,
cost 10s of millions lives.