pet rock

MEcon (het) student. Econ teacher (orth/het). Secular. #LetsGoOilers, #LetsGoBlueJays

[pet rock @petrock]

It can't be repeated enough:

Believing federal taxes are used to finance spending leads to fear-driven politics, misinformed policy, unnecessary austerity, rising inequality, economic stagnation, and poor inflation management.

All based on a false household budget analogy.

[pet rock @petrock]

@DawsonNiehus I'm not arguing from the identity. The causal claim is that investment spending generates income, and part of that income is saved. The identity records the outcome; it isn't the mechanism.

[pet rock @petrock]

Keynes and Minsky are bread and butter. Keynes explains why firms invest. Minsky explains how they finance that investment, and how fragility builds.

Meanwhile, mainstream economics is still out here insisting saving causes investment.🤪

[pet rock @petrock]

@DawsonNiehus Available resources != saving in the Keynesian sense. I agree investment needs real resources; I deny that this proves saving, as income not consumed, must come first.

[pet rock @petrock]

@DawsonNiehus So to be clear, your debate has shifted from:

"Can investment precede saving?"

to

"What should the word saving mean?"

[pet rock @petrock]

@DawsonNiehus I'm not denying the real-resource sequence. I'm denying the jump from "investment requires unused resources" to "saving, as income not consumed, must come first."

Idle resources can be mobilized by investment before new income and saving emerge.

[pet rock @petrock]

@DawsonNiehus No confusion.

Agreed that identities don't establish causation. The Keynesian claim isn't "S = I, therefore investment causes saving." It's that investment spending creates income, from which saving emerges.

[pet rock @petrock]

@DawsonNiehus Agreed: investment requires unused resources. But that doesn’t prove saving, as income not consumed, must come first. Investment can mobilize idle resources and create the income from which saving emerges.

[pet rock @petrock]

@DawsonNiehus Whether "full employment" is precisely measurable is beside the point. The relevant question is whether idle resources can exist. If they can, investment need not wait for current consumption to fall before those resources are employed.

[pet rock @petrock]

@DawsonNiehus Your conclusion follows because you've defined all existing unused resources as "saving."

Keynesians typically mean income not consumed, which is why they can argue that investment mobilizes idle resources and creates the income from which saving later emerges.

[pet rock @petrock]

@DawsonNiehus From idle resources.

Your argument seems to assume full employment.

[pet rock @petrock]

@DawsonNiehus Idle resources.

Appears your entire argument assumes full employment?

[pet rock @petrock]

@DawsonNiehus The existence of scarcity proves that investment requires real resources. It does not, by itself, prove that saving must causally precede investment.

[pet rock @petrock]

@DawsonNiehus The existence of scarcity proves that investment requires real resources. It does not, by itself, prove that saving must causally precede investment.

[pet rock @petrock]

@PerBylund @bad_dadd So the reality of fiat makes for a poor basis to critique Austrian economics. Gee, isn't that convenient.

[pet rock @petrock]

@kebede_zayda https://t.co/mJvHXRZ4JC

[pet rock @petrock]

@PerBylund @StephanieKelton What claim did you make? I remember looking at your paper but it never made sense and that was a couple years ago.

Surely you can state you claim simply and clearly right here and now.

So what is it?

[pet rock @petrock]

@KellMorrHK And you apparently lack understanding of every other school outside the Austrian tradition. 🤷

[pet rock @petrock]

Serious Economics™ has standards. Like it or leave.

[𝔐𝔽𝓩 @mean_field_zane]

@petrock The starting point of economics is preferences and choice under constraint. Like it or leave.

[pet rock @petrock]

@KellMorrHK This is false

https://t.co/c3FJuWJSy6

[Kell Morr @KellMorrHK]

@petrock Only the Austrians reject both

[pet rock @petrock]

@MikeFellman Functional finance is only a part of MMT and even then, only a part of functional finance is MMT.

[pet rock @petrock]

@Mozi762 @tonyannett I doubt he even understands your question.

[pet rock @petrock]

@Williamgallus @wbmosler Excellent stuff, William.