Outside of the world of global economics and finance – you may not have heard of Warren Mosler. But, Mosler is arguably the one of the world’s biggest leaders in MMT and he’s consulted with some of the best and brightest Europe has to offer – as well as the United States.
In 2010 Mosler published Seven Deadly Innocent Frauds of Economic Policy outlining errors that can be made in the development of policy and explains what he deems “true” as proper alternatives.
In 2012, Mosler followed up with Soft Currency Economics II as CNBC calls him, “one the brightest minds in finance.”
Mosler also has the respect of Stephanie Kelton. Kelton is the Chief Economist on the Senate Budget Committee.
So, it’s not only eye catching that Mosler writes on his Facebook page of his support for Bernie Sanders – it’s also newsworthy.
It’s so important that it got me working on a Sunday morning as I followed up with Mosler for any clarification. I asked him if this was his endorsement of Sanders: “Yes, I’m officially endorsing him.”
Why it matters:
Bernie Sanders may be a long shot and it’s certainly true that the mainstream media isn’t giving him his due – but that isn’t Mosler’s focus. Mosler is concerned about global economies and unemployment. He wants world leaders to understand fiat currency policy and management – and if they don’t (or can’t) understand, Mosler wants them to put economic advisers who do understand in key positions.
Mosler has a way of putting complex issues into sentences we can understand – as evident in his twitter bio and his quote on taxation:
The United States government makes the money they spend, literally out of air– and it’s taxed back to the government making the dollar strong. But, taxation also causes unemployment – it’s a balancing act.
George T Fisher 
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Warren is sharp as they come, no question about it. For those who understand high finance this is an important endorsement.
By two minutes in Warren is off the wall, saying that currency notes (in your pocket) come from the ‘government’ (They are issued into circulation as currency by the private banks as a debt ….after the private banks acquire them for the cost of the paper.), …, and then that currency-in-circulation represent his personal definition of what a deficit is ….money the government has spent, but not yet taxed. …… a totally fallacious construct.
Everyone at Treasury and the Fed know nothing of Warren’s warped sense of monetary reality, and he has never produced one that has agreed with him. Never.
(Please don’t trot out NEWMAN !!!, a career banker that MMTers pretend is a Treasury official for his brief stint as DepSec., people that Warren here says do NOT understand monetary operations [certainly I agree on Newman] )
And Mosler’s seven deadly frauds are not so innocent as the title implies. He falsely claims that the IRS shreds cash tax payments BECAUSE, and as a way of PROVING his errant illusion that, the government doesn’t need tax money to spend, which it does. And everyone I ever met at Treasury would agree with me on that.
Glad that Warren would endorse Bernie, but as one who worked on all of Bernie’s campaigns locally in Vermont, including his first loss to Peter Smith in 88 ….. . till have my bumper sticker from that campaign. … I can only hope that Bernie don’t get sucked into Warren and Stephanie’s “public debt is good for us” meme.
Overt Money Finance of deficits (AdairTurner) is good for us.
Public debt, like all unnecessary money-debt, is good for the One Percent.
For the Money System Common.
No. The IRS sends the cash to the Federal Reserve district bank. If the cash is in pristine shape, it’s re-used. If not the Federal Reserve shreds the cash. There are 121 high-speed German shredding machine in US Federal Reserve district bank basements.
Watch the movie “Mad Money.” It’s accurate about the shredding.
Correction: there are 133 machines nationally in the 12 district Federal Reserve banks and 21 operational branches at a cost of $2 million each.
When someone pays their taxes in physical dollar bills, the IRS marks Mr. Cash Payer’s record “paid” and loads the cash into an armored truck for the trip to a Federal Reserve district bank. When the truck pulls into the Federal Reserve truck bay, workmen offload the cash and transport it to the basement immediately for “condition rating.”
The condition rating is based on 100 criteria for a max rating of ’16’. Are they torn or ripped? Do they have lipstick, pizza, or ink on them? Did they go through the washing machine a dozen times?
For a bill to pass it must rate 13 out of 16.
The name of the machine is Geiseke & Deverents BPS3000.
As usual you are wrong on counts concerning Warren’s excellent analysis of our monetary and fiscal operations. MRW has the appropriate and correct rebuttals to your emotional rants.
Incorrectamundo. Private banks DO NOT acquire them for the cost of the paper.
The 12 regional Federal Reserve banks request currency from the Bureau of Printing and Engraving through the appointed ‘Federal Reserve Agent’ at each district bank and must provide 100% collateral for the amount of currency requested. Every day the Federal Reserve Agent must report at the end of the day to the Bureau of Printing and Engraving that the collateral is in place.
This currency is subsequently distributed to the private banks in the Federal Reserve district, which the banks pay for with treasury securities or other financial assets.
This is the relevant US Code:
http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section412&num=0&edition=prelim
Thanks for setting the record straight.
Joe Bongiovanni, you wouldn’t know the first thing about MMT and what you state above is one of the sloppiest misrepresentations I’ve seen in a long time.
He does this stuff all over the net whenever he encounters a post supporting MMT and Warren. He has skimmed the literature on MMT and since it fails to confirm his commercial bank screed it’s deemed by him to be outlandish. He seldom offers a coherent rebuttal.
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