Why, when I hear or read about MMT, do I start humming "Love Potion Number Nine"?

Love Potion Number Nine

I took my troubles down to Madame Ruth

You know that gypsy with the gold-capped tooth

She's got a pad down on Thirty-Fourth and Vine

Selling little bottles of love potion number nine

I told her that I was a flop with chics

I've been this way since 1956

She looked at my palm and she made a magic sign

She said "What you need is love potion number nine"

She bent down and turned around and gave me a wink

She said "I'm gonna make it up right here in the sink"

It smelled like turpentine, it looked like Indian ink

I held my nose, I closed my eyes, I took a drink

I didn't know if it was day or night

I started kissing everything in sight

But when I kissed a cop down on Thirty-Fourth and Vine

He broke my little bottle of Love Potion…

When all subsidized fiscal space, borrowing at capacity at reasonable rates and seigniorage has been consumed, and Easy Street ain’t no more, from what cliff will governments throw us out, from that of deep recession or from that of runaway inflation, or from both at the same time?

Notgelt – emergency money a timely British Museum exhibition in times of Covid-19

     

MMT’s High Priests assure us their intention is to issue money only to make sure that all unused resources are put to a productive use, but never so much as for inflation to take off. Hah! As if inflation is such a precise concept with equal consequences for all. Those who own shares and houses have clearly enjoyed the current “low” inflation much more than those who don’t.

A letter in Washington Post: The capacity to borrow at reasonable interest rates is a strategic sovereign asset

In his April 12 op-ed, "How economists led us astray" Robert J. Samuelson wrote, "What we conveniently overlooked was the need to preserve our borrowing power for an unknown crisis that requires a huge infusion of federal cash."

Yes, the capacity to borrow at a reasonable interest rate (or the seigniorage when printing money) is a very valuable strategic sovereign asset, and it should not be squandered away by benefiting the members of the current generations or with some nonproductive investments. 

So, when public borrowings are authorized, that should require Congress being upfront that a part of that borrowing capacity is being consumed, which has a cost, and give an indication of who (children or grandchildren born what year) are expected to have to pay back that debt.

Mr. Samuelson also referred to "low dollar interest rates [that] will keep down the costs of servicing the debt." Sadly, those current "low dollar interest rates" are artificial rates, much subsidized in that since 1988, with Basel I regulations, banks are not required to hold any capital against Treasuries, and of course subsidized by the Federal Reserve purchasing huge quantities of Treasuries.

PS. A reverse mortgage on our children’s and grandchildren’s future

A February 2023 Tweet

"Regulators allow banks to hold much less capital/equity against government debt, bureaucrats/politicians spending now future tax revenues, than against loans to small businesses & entrepreneurs, those who could generate future tax revenues

Smart? Hell no!"