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Here's the relevant section. He sort of randomly started talking about this.
He quotes extensively from the Vice.com article about MMT, which Schmidt posted about here at the D-Hub last week.
The italicized is Rush's commentary. The quotations are from the Vice.com article read by Rush, and the highlighted and capitalized below his comments are my own.
I want to read to you something here. I prepared a little analysis of this. There’s no reason money needs to be counted anymore. There’s no reason that we need to even worry about how much money we print, this new movement of monetary policy.
NOBODY IN MMT HAS EVER SAID THAT.
Warren Mosler is one of the people quoted in this. It’s a 19-page story, which is why I can’t do a full exposition of it. He says, “I look at things at an elemental level.”
“He got down in the weeds to examine precisely how the Federal Reserve and the Treasury interacted with the general economy. He wanted to understand what happened to balance sheets when the Treasury collected taxes, traded bonds, spent and created money. He came to believe that the conventional wisdom has the relationship between the government and the private sector ass-backward.
"“Most of us assume government has to tax before it spends, that like you and me it has to earn money before it purchases goods. If it wants to spend more than it taxes — and it almost always does — it must borrow from the bond market. But by examining the granular way government accounts for its spending, Mosler saw that in every case,” the government spent money long before they ever taxed it.
“Expenditures come first. When your Social Security check is due, the Treasury doesn’t look to see if it has enough money to pay it.” They just cut you the check. “It simply keystrokes that money directly into your bank account and debits itself simultaneously, thereby creating the money it pays you out of thin air.
“When you pay your taxes, the same process happens in reverse. The federal government subtracts dollars your account and eliminates the same amount from the liabilities side of its ledger, effectively destroying the money you just paid to it. Unlike households or firms or even state and local governments, the federal government is authorized to create dollars. It adds money into the economy when it spends, and it takes it out when it taxes. ‘There’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody,'” and that was Alan Greenspan in 2005.
There are people saying this is the way things ought to be running. This idea that we have to have a certain level of taxation and that depends on what we could spend is silly. We should spend and spend and spend and spend and tax whatever we can collect and everything will work out.
THAT'S NOT WHAT MMT 'SAYS'
So there’s a big movement on for absolutely no limits on government spending, despite what they see in Greece, despite what they’re seeing in the European Union, where they can print money, too. It is the most incredulous thing. And this is a serious monetary theory that is effervescing and percolating out there among some of the brightest minds of economics. Because they think the current balance sheet system is an utter failure.
INCOME ACCOUNTING AND BALANCE SHEET ACCOUNTING ARE DIFFERENT.
IF WE WERE LOOKING AT THE BALANCE SHEET OF THE UNITED STATES GOVERNMENT THEN IT WOULD BE CLEAR FROM A MAINSTREAM PERSPECTIVE THAT THE UNITED STATES IS ENTIRELY SOLVENT.
The national debt thus will mean nothing. The annual budget deficit will mean nothing, because all money is Washington’s. And what you have is what government decides to let you have, not what you’re earning. So why flood the country with people that can’t work or can’t produce and earn a lot? Why flood the country with people that can’t read? Why flood the country with people that can’t speak English and are not gonna learn? Why flood the country with people that are not even interested in becoming Americans? The answer to all these questions is found in everything liberals believe.
MMT IS NOT COMMUNISM, RUSH. NOBODY SAID ANYTHING ABOUT WHAT YOU ARE TALKING ABOUT.
MANY CONSERVATIVES HAVE FOUND MMT INSIGHTS VERY USEFUL, SOME HAVE EVEN BECOME PROGRESSIVES BECAUSE OF MMT. MANY FORMER AUSTRIAN ECON PEOPLE HAVE COME TO THE FOLD. MICHAEL JOHNS WAS A FOUNDER OF THE TEA PARTY AND IS A FRIEND OF WARREN MOSLER. BARRY ARMSTRONG OF WRKO RADIO IN BOSTON, WHICH IS A CONSERVATIVE TALK RADIO STATION, HAS WARREN MOSLER ON REGULARLY AS HIS SHOW'S CHIEF ECONOMIST. IN FACT, IT WAS DONALD RUMSFELD AND ARTHUR LAFFER THAT ENCOURAGED WARREN MOSLER TO DEVELOP WHAT WOULD BECOME MMT.
THE REASON MOST CONSERVATIVES REJECT MMT IS BECAUSE THEY KNOW IT OBLITERATES THE "HOW ARE YOU GOING TO PAY FOR THAT?" LINE OF ATTACK AGAINST PROGRESSIVE SPENDING INITIATIVES, WHICH IS THE ONLY THING STANDING IN THE WAY OF SUCH POLICIES, AS THE PROGRESSIVE AGENDA IS OTHERWISE UNIVERSALLY SUPPORTED BY THE AMERICAN PEOPLE.