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US Federal Reserve raises interest rates for first time since 2018

theguardian.com

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Re: US Federal Reserve raises interest rates for first time since 2018

#621

Post by pibechorro »

andreyk wrote: post #137

An interesting aspect of this is that the endless printing of money in the last few years was a sort of stress test of modern monetary theory, which has been seeing lots of discussion in those same years. I never quite understood how this theory would work while avoiding inflation, and what's happening now seems to at least be related - https://www.nytimes.com/2022/02/06/business/economy/modern-m... Conceptually the…

the only long term sustainable economy is one that has a sound money where natural supply/demand laws govern it, not a central and politically motivated agenda where money can just poof be made from nowhere, people are falible and complex systems are impossible to control. Ultimately mmt is like relying on weathermen to be 100% on point. Mmt is just a boom bust cycle where debt is kicked down the road and the bubbles grow larger with a false sense of security.

Re: US Federal Reserve raises interest rates for first time since 2018

#622

Post by hackerfromthefu »

odonnellryan wrote: post #451
nostromo wrote: post #389

Earlier quoted context omitted.

The economy would collapse, along with the US government, at even moderately-high interest rates. The federal government is $30t in debt. Even a small rise in interest rates would quickly make the entire federal budget servicing the debt.

That's not true.

Please elaborate

Re: US Federal Reserve raises interest rates for first time since 2018

#623

Post by grey-area »

dllthomas wrote: post #518
karpierz wrote: post #475

Earlier quoted context omitted.

> Factual is class of statements, opposed to normative statements. They're asking for supporting evidence for MMT.

No, they're talking past each other. dragonwriter seems to have meant "factual" in the sense of "concerned with questions of fact", "is" rather than "ought", and was not intending to claim (at least in that statement) that the answers MMT provides are correct. gray-area seems to have interpreted "factual" as "accurate" or "truthful", and was objecting that defining a theory as "concerned with things which are actuall…

MMT is not evidence based, it is in no way factual (it is neither backed by facts, nor is it concerned with facts) - it is a conjecture about what might happen in the best of all possible worlds based on abstract arguments about perfectly spherical economies in a vacuum.

Factual is entirely off base as a descriptor and has been picked here in an attempt to make it seem grounded in reality and without challenge.

Re: US Federal Reserve raises interest rates for first time since 2018

#624

Post by grey-area »

dragonwriter wrote: post #444
grey-area wrote: post #393

Earlier quoted context omitted.

Your definition is circular. What proves MMT is in any way ‘factual’. MMT is an old lie, oft repeated, and only discovered as a lie after it is far too late.

> Your definition is circular. No, it's not. > What proves MMT is in any way ‘factual’. Factual is class of statements, opposed to normative statements. > MMT is an old lie It can't be that old, since it only describes the constraints on sovereign finance of entities functioning in their own pure-fiat currencies, which isn't a subject that has been of interest for very long.

MMT is not based on facts about the world as it is, but on conjecture, ergo it is not factual.

The old lie is that sovereign entities (note the deep and old roots of that term in feudal societies) can debase their currencies with zero consequences.

Usually this works well for a long time, until all of a sudden it doesn't.

Re: US Federal Reserve raises interest rates for first time since 2018

#625

Post by pjc50 »

dtwest wrote: post #486
dragonwriter wrote: post #216

Earlier quoted context omitted.

Yeah, MMT basically asserts that the separation between fiscal and monetary policy is artificial, and that the only real constraint on “fiscal” policy (tax and spending) is monetary effects, not the metaphorical limited purse (“fisc”) that must be filled with revenue and borrowing to allow spending. It is not “Congress can spend willy-nilly” but “Congress needs to stop thinking about fiscal balance and start thinking…

An issue with using fiscal policy this way is that many of the things that are worth spending money on aren't easily movable levers, they are long term projects. If inflation is accelerating and we need to cut spending to fix things it may be difficult or inefficient to cut the budget of a 10 year infrastructure project. If we need to spend more one year, do we just flood the healthcare system or military with money…

> If we need to spend more one year, do we just flood the healthcare system or military with money temporarily?

You missed the "mail everyone a cheque" era?

Re: US Federal Reserve raises interest rates for first time since 2018

#626

Post by StevePerkins »

lupire wrote: post #581
StevePerkins wrote: post #506

Earlier quoted context omitted.

> "raise taxes in the good times..." Oh, I know which party he's talking about! > "...and pay down that debt" Huh, nevermind.

Even the extremists admit (thought they try to hide it) the Bill Clinton paid down the debt by raising taxes and cutting military spending by not starting large new wars. Caro insulted Clinton for proposing a $200B/ye deficit, right before Bush 2 issued a one-year addition of $1T in new military spending for his personal vendetta against Saddam Hussein launched on false pretenses. https://www.cato.org/commentary/no-b…

The 90's sure were great, I miss voting for Bill! But those days are long over, and most partisans today seem brutally disappointed in Biden because he's only spent $1 trillion instead of $3 or $4.

Re: US Federal Reserve raises interest rates for first time since 2018

#627

Post by SantalBlush »

MisterMower wrote: post #566
SantalBlush wrote: post #556

Earlier quoted context omitted.

>Do you have so little respect of your fellow man that you think they are incapable of thinking? Funny, I was thinking the same thing about the above comment I was replying to. >They are pointing out this outcome did not happen. Flattening the curve absolutely does not mean preventing people from getting COVID; it's about lengthening the time horizon in which the population gets infected to reduce strain on the healt…

Quoted post unavailable.

Is she a plastic surgeon or something? What's her number?

Re: US Federal Reserve raises interest rates for first time since 2018

#628

Post by hn_version_0023 »

mushbino wrote: post #410
hn_version_0023 wrote: post #344

Earlier quoted context omitted.

The best definition of Congress I’ve ever seen was this: Congress: 535 ants on a leaf, floating down a river towards a waterfall, with each ant thinking they’re steering. I share your lack of confidence.

If it said being paid not to steer, I think that would make more sense in our current oligarchy.

You know, I’m sure I don’t recall the text exactly… it was a New Yorker cartoon that I just can’t seem to dig up. C’est la vie!

Re: US Federal Reserve raises interest rates for first time since 2018

#629

Post by CPLX »

e4e78a06 wrote: post #531
CPLX wrote: post #527

Earlier quoted context omitted.

> better for the country in the long run to have excess money flowing into tech VC funds rather than being spent on memecoins and shitty electronics Why

I'm just saying in the absence of any alternatives (which I'm sure there are), it's better to have 1% of trillions of dollars going towards advancing humanity and technology than 0%. I am fully aware that 99% of that money is going to be burned on WeWorks and the like.

Link to tech VC firm that has advanced humanity?

Re: US Federal Reserve raises interest rates for first time since 2018

#630

Post by rufus_foreman »

seizethecheese wrote: post #305
jcadam wrote: post #255

Got my mortgage at 2.75% late last year. Woooooo.....

What do you think is going to happen to your home price is interest rates go up to 5% and then people can’t afford huge mortgages anymore?

Ben Carlson's economics blog has a post on what happened to housing prices in the past during periods of rising interest rates: https://awealthofcommonsense.com/2022/01/will-higher-mortgag....

Short answer, home prices go up:

"In fact, every prolonged rising rate environment I could find over the past 50 years saw housing prices grow when mortgage rates went up".

From his chart, when mortgage rates went from 3.6% to 5% from 2015 to 2018, house prices rose 22.4%.

So, what do you think is going to happen to home prices when interest rates go up to 5%?

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