Mike’s Latest Bloomberg Hit: “US Budget Deficit is a Virtue”

7 Responses

  1. Why is it so hard to differentiate what “budget” means for the issuer and users of a “fiat” currency?

    A currency issuer maintains an input/output real-products/services budget, and issues fiat currency as internal bookkeeping.

    Currency users maintain local currency budgets as an accurate proxy for their local input/output budgets.

    Fiat currency is bookkeeping, and the monopoly issuer is the chief accountant. It’s that simple.

    There is – semantically – simply no such thing as a “deficit” in fiat.
    That use of the word, fiat “deficit,” is entirely a semantic miscue.

    There’s no need to even discuss the amount of numerals involved – that’s just distracting.

    Even this interview – which Mike handled better than most – is extremely frustrating to watch. The interviewer obviously doesn’t have the slightest idea how a fiat monetary system actually works – and still doesn’t at the end of the interview.

    1. @roger erickson,

      I agree, it was frustrating to watch. It was like a battle of stereotypes, rhetoric of cliches.
      I think the last sentences by Mike were the key: concentrating on the real resources as opposed to the money. Concentrating on that difference might be what allows everybody to understand how different those points of view really are: one is about value of money, and another is about the use of real resources, real production, real economy.

      Deficit? – it is just accounting
      Social security, Medicare? – real services, needed for society paid for by government accounting units
      Unemployment? – real production lost
      Inflation? – loss of value of an accounting unit
      China trade? – trading real goods for an accounting unit

  2. Chomsky was right, when he said that these kinds of quick-talk shows are best suited for reinforcing existing stereotypes. Whenever anyone disagrees with established stereotypes – he/she looks like a crazy person, because there is simply no time to explain what he/she means.

    1. @Gary,

      Particularly when the interviewer interrupts all the time to push the ‘audience accepted stereotype’.

      They appear to be designed to keep the audience watching as the interviewer constantly confirms their beliefs and belittles others.

      1. Exactly. Watching audience and reinforced stereotypes are all they (media, advertisers) need.
        Having argument is fine (maybe even necessary) – it has entertainment value – but only as long as audience does not have to think too hard, and can stick to what they hear all the time

  3. Where did Mike Norman get the number $200T for the entire assets of the United States? That seems awfully high to me. By at least a factor of two.

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