Modern Monetary Theory --- Same Old Federal Reserve Nonsense
Authoritarians always rely on "intellectual" justification when selling their schemes to the public. This is why you constantly hear the term "experts say" before your liberty and property are taken from you. Democratic Socialists have been latching onto "Modern Monetary Theory" in order to justify their takeover of American life. Ron Paul discusses on today's Liberty Report!
Authoritarians always rely on "intellectual" justification when selling their schemes to the public. This is why you constantly hear the term "experts say" before your liberty and property are taken from you. Democratic Socialists have been latching onto "Modern Monetary Theory" in order to justify their takeover of American life. Ron Paul discusses on today's Liberty Report!
Authoritarians always rely on "intellectual" justification when selling their schemes to the public. This is why you constantly hear the term "experts say" before your liberty and property are taken from you. Democratic Socialists have been latching onto "Modern Monetary Theory" in order to justify their takeover of American life. Ron Paul discusses on today's Liberty Report!
Hello, everybody, and thank you for tuning in to the Liberty Report.
With me today is Chris Rossini, the co-host.
Chris, welcome to the program.
Great to be with you.
Thank you, Dr. Paul.
Very good.
Recently, Chris, we all have noticed that there's been a lot of attention, a lot of articles written about the modern monetary theory.
Of course, we're interested in theory.
Maybe there's something new and better than what we've had.
But the people who like this modern theory, they can't steal commodities and they can't steal in gold, so they want something new.
And so it's this modern monetary theory.
And it's a strange one, but quite frankly, I don't find much new in it because it's justifying the very system that we have.
They've just changed the names a little bit, but they want to be a monopoly.
They want to monetize debt and all these different things.
But I think there are a couple of reasons why they might be talking about that more because there are so many articles is one is they have to deal with keeping the spending going and dealing with the debt.
And so far, the debt keeps exploding and they have to figure out what's happening.
I think they recognize that there is a danger in the debt.
But there's probably some other reasons for this as well.
Yes, and we hear that Alexandria Cortez, Ocasio-Cortez, likes the modern monetary theory.
And I'll tell you what, because she believes that it will fit with her Green New Deal.
And that's really all we're dealing with.
You know, politicians, they want to take what isn't theirs to take, and they want to spend what isn't theirs to spend.
But they need some kind of intellectual backup, some justification.
That's when the ivory tower comes in.
And that's what Keynes did back when the New Deal was around.
It made him immortal because of it.
So if you're in the ivory tower and you could somehow justify with all your charts and statistics why theft is good and why government should take what you have and give it to somebody else or vice versa, you know, it doesn't have to be true.
It just has to be believable and sold.
And if your idea, you could hit the jackpot if your idea is chosen.
You could get a column in the New York Times.
You could be like a Keynes.
So that's where the intellectual backup comes for these crazy government programs.
Yeah, and I think they're in a way admitting that the problems that we talk about actually do exist, and they're coming up with a solution.
And they worry about the fact that the people might not have enough money to pay their taxes.
So this is designed so that people will have more money so that they can pay their taxes.
And there's not enough savings.
And it will provide more money for savings so the people can spend.
So they believe that this system, which is just modification of what they've been doing, it will generate a way to pay for the debt because I think it's being recognized that the debt is extreme and something has to be done about it.
But it's interesting that the balance is not to be dealt with by the slightest notion that you have to cut anything.
And I think that's what it's doing.
It's the intellectuals.
These are the intellectuals, the university professors writing about this stuff.
And it's just a way to try to reassure the people, don't worry, we can handle this.
And this is the way we can pay the taxes.
We can give you what you want.
Deficits aren't harmful.
And things will be okay.
And in this theory as well, that if there's any unemployment, you just generate more money, which is part of what we do now.
We temporarily give the economy a boost, then we have to put up with the downturns.
But I think they're in a way endorsing this whole notion this time is different, because things are held together reasonably well right now.
If the unemployment statistics are correct, the stock market is healthy, and they're saying, well, this is golden.
We'll have to be a little careful with the debt.
We'll take care of that.
But this time it's different.
Of course, if you understand Austrian economics, this time is not different.
And if it's been a little bit more prolonged and the bubble's a little bit bigger, it just means that in a short period of time, we'll probably see a decrease in the prosperity that will have to make the corrections by all this excessive debt that has already been created.
Right.
And there really isn't anything different here, or very little different.
Because the same thing would occur.
You know, when you print money, the people who receive that money first are the beneficiaries.
If they printed money and everyone got an equal amount, there'd be no point to doing it.
But the fact that the people who receive it first, they get the benefit because they go out into the marketplace at the current prices and they can bid up prices.
So everyone else, people on fixed incomes, everyone else suffers because these people are marching into the economy with this new money and they're bidding up prices.
So that's how you pay an inflation tax that Dr. Paul has mentioned.
Now, these MMTers, from what I understand, they're going to do this, but if they think inflation is too high, they're going to stop.
Right.
Like government, they can't stop going into debt.
They're at $22 trillion.
They're going to stop going into inflation.
But they're going to stop the inflation by raising taxes on people.
So now you're getting hit twice.
First with the inflation tax, and then the government's going to come in and tax you more to tame the inflation.
And you know what happens when people, they actually rebel against the second tax.
When they see you're coming directly for their money, inflation, they can't really understand as much.
But if you think you're going to go in and directly tax everyone, you're going to have a problem on your hands.
That's right.
And I think they understand that, and they're always trying to cover their bases in the past, and they'll continue to do it because we have a bit of it now, and that is price controls to make things look not so bad.
And, you know, in the practice of medicine, there are a lot of price controls.
Unfortunately, some of those price controls boost things up.
But that's what they'll introduce as the price controls as being the answer.
Now, the word austerity comes up in their discussions, but in the opposite way that we would use the word government austerity, because we think the government should practice a little austerity and be cautious and live within our means.
But they say there is no need for that.
That is harmful.
Deficits don't matter, which is a Keynesian idea and it's been around for a long time.
And the current administration must have a lot of Keynesians because it doesn't seem to paze anybody.
I mean, we're running deficits over a trillion dollars a year.
We're up to $22 trillion.
And just even though the interest rates are low, it is still, the amount is exploding.
So there's going to be a limit to this.
Chris, there was a thing that happened in my early career in politics that sort of I was reminded of.
Because in 1971, I've talked so much about my personal memory of ending the Bretton Woods Agreement on a Sunday night and closing the gold window and wage and price controls.
And it led to the 1970s, which were really rough economic times.
So that's when I started talking out, and I didn't really expect to go anywhere with it.
I didn't expect to go to Congress anyway.
But 1976, I did go to Congress, and it was interesting.
The very first bill, I wanted on the banking committee, and they didn't know me from Adam.
So, oh, at that time, not many people wanted on the banking committee.
So I got on a banking committee, and the first bill to come up was the IMF bailout bill, because the IMF whole system, you know, of propping up currencies and the balance of payments, it just collapsed after the collapse of Bretton Woods.
And when I asked about why do we have to do this, they said, well, we have to update the law to coincide with what we're doing.
We've been breaking the law since 1971, and therefore we have to change the law and technically make it look good.
And I thought, well, that really is a great story, but ever since, as long as I was there, that's about all they were ever doing was trying to manipulate, manipulate public opinion and change things.
And maybe they even do it less now because they're not worried about whether the law accommodates policy.
They certainly don't worry that policy accommodates the Constitution.
That's a different story.
So they've more or less rejected that.
But you were talking a little bit about just the nature of inflation.
One characteristic, and this modern monetary theory will try to solve this problem.
The people eventually say we don't have enough money.
And whether it's Venezuela or Zimbabwe or even our current system, our current system is a good example.
They say there is no inflation, but the wages never keep up with inflation, but they're not totally static either.
They've moved up.
But this maldistribution of wealth in this country means that the lower class and the middle class aren't doing as well.
And they say, we don't have enough money.
They never say somebody's messing up with the price system.
And maybe we ought to look at monetary policy.
We need more money.
No, this is exactly what this emphasis is on this modern-day theory.
We have to make sure people have more money to take care of their needs.
You're not going to be, you know, cold and callous and not a humanitarian.
So they want you to have the money.
But in the meantime, we will reassure the people that we can handle the debt and we'll make sure that people have enough to pay their taxes.
So they can raise the taxes, send the money to the people, and they pay it.
And they think this is going to correct it.
You know, it is absolutely bizarre.
If it weren't so serious, it would be really very funny.
But the one thing for sure, it is not long-lasting.
It ends.
They've tried it before.
So I'm anticipating, Chris, that we will, in the not too distant future, see the end of this type of program.
And I predict also that the modern monetary policy will not help out very much.
Well, and it actually will only hurt if people adopt it.
But we're trying to get the word out otherwise.
You know, we've done probably over a thousand Ron Paul Liberty reports, and you can go through every one of them, and you'll never find statistics and charts and stuff that's way over everyone's head trying to convince you of something.
It's all about common sense.
There are no formulas for micromanaging the economy.
We just say you need sound money chosen by the marketplace.
Market will probably choose gold and silver, but if not, that's fine, as long as it's not something that's forced on us by government, that they can just inflate into infinity, like they're trying to do now.
And uh, you know, voluntary interactions with one another, free markets, that's the key.
You don't need charts for all that it's, it's just common sense.
And uh, hopefully that ultimately that will win the day, hopefully sooner rather than later.
And Chris, that point you make about uh, who creates the money, I think is very important, because it it does matter where money is originates.
And so uh, the money uh, the modern monetary theory directly attacks the Austrian principle that has been made, but it endorses history, and that is that money doesn't originate with the government, money originates in the marketplace and it's a commodity.
So uh, the um, the origination uh, they insist, has to be in the state uh, that is, is the government and should be a monopoly.
And uh, and so that that contradicts the whole, the whole notion of uh what uh, what kind of a policy we should have.
And you know we uh, we say that this is nothing new and it's same old FED policy, and and that is very much the case.
But uh, you know this whole problem is is not brand new at all.
It's not a hundred years old or 200 years old, uh it's.
It's thousands of years old.
Where they understood it, even in Old Testament times, they understood the, the importance of honest weights and measures, and silver and gold is money, and it's recognized.
And yet uh, you know, we've drifted away from that a long time and so uh the, the solutions that they've had in in the past, involving wage and price controls, or tinkering with the money and bailing out people and all uh, that it's, it's a panacea for a little while, but it really doesn't work.
So I think um, I think that this is a time where uh, they're scurrying around, because I think those people who are advocating some of these things are thinking that they're smart enough to handle it.
So yes, debt is a problem, deficits are a problem.
We'll just give the people more money so they pay more taxes, and that's their solution.
You have a closing comment uh, Chris?
Yeah, I just want to thank all of our subscribers.
We're approaching 200 000.
We appreciate every one of you.
Please share our videos with people because uh, we're all in this together.
This Green New Deal and Mmt, it's coming for all of our wallets but uh, maybe we could head it off and you could help out by sharing our videos.
Thanks, very good, and thank you Chris, and I want to thank our viewers for tuning in today.
Uh, this is a subject that I think is crucial, and one of the practical reasons why I think monetary policies are so crucial is the value of the currency involves one half of every transaction, because everything is related in in the transfer.
So it's already been uh, socialized and monopolized over the years.
As soon as you have the government monopolies come in, which is historic and, of course uh, it was Hayek and other Austrian economists that wanted us to move away From that, and let the market completely control it, control the nature of money.
Doubt Modern Monetary Theory00:00:54
And I think that is the case, and that is the reason I've supported competing currencies that should be developed in the marketplace.
But it is indeed indeed a challenge to big government.
It's a challenge to people who like deficits because they have a welfare, warfare state to operate, and they don't want to be bothered by any restrictions.
They believe in authoritarianism, they believe in protecting the banking system, they believe in central banking, all these things that contradict the principles of liberty.
Well, if we're indeed interested in having a society that emphasizes peace and prosperity and liberty, we will have sound money because that is absolutely necessary rather than having a fictitious type of monetary system.
And there is no doubt the modern monetary theory won't work.
I want to thank everybody for tuning in today to the Liberty Report.