is this the same larry summers who said we dont need to regulate derivatives?

Larry Summers played an important role in causing the last two global financial crises (1997 and 2008). Listening to him lecture other people on financial disasters makes as much sense as fielding advice from El Chapo on criminal justice reform.

Is he still relevant? Good thing he wasn’t in Iceland, he would have been locked up along with bankers. People forget that he was one of the architects of 2008 crash.

I prefer critics of an idea to actually talk about the idea. Like to see him and Stephanie Kelton do a head to head debate.

With all due respect, when you describe a theory incompletely and incorrectly, the fact that you are against it seems beside the point. MMT from my understanding, does not describe a world without limits where money can be "printed" without limit. The limit is productive capacity. Plus, we always seem to find the resources for defense spending and corporate tax cuts.

It would have been so much easier for him to say "I have no idea what MMT is"

The global desire to keep the dollar as reserve currency is eroding

His statement that a country does need fiscal stimulus when it is in the doldrums is exactly what MMT is saying. Fiscal stimulus is printing money.

Summers is full of neoliberal crap. MMT is simply a description of how the monetary system actually functions. It’s not a policy issue.

What a joke. MMT is already in practice, though the politicians won’t acknowledge it.

We already are using MMT. That is where we are. This guy is a liar. The DOD overspends by over 1 trillion per year.

Larry Summers is a disaster

"The laws of Arithmetic"?? How about the laws of accounting, where one person's debt is another person's income?

Extremely wealthy man tells peasants not to look behind the curtain, money works exactly as I say it does!

This is a great reason to trust the MMT'ers. Summers was one of the gang who brought you the worst global financial crisis since the Great Depression. He does not understand how money works. If inflation is your fear, rather than unemployment and permanent indebted lower class, then there is nothing to fear from MMT. Moderate demand-pull inflation can ALWAYS be controlled by taxation and other fiscal contraction measures, and inflation of this sort is healthy and wholesome, it reduces the value of rich folks wealth and reduces the burden of debts. That's why the Austrian School hate inflation, because they recognise it as an indirect tax. Government deficits are private (non-government) savings. Gov deficits cannot cause inflation, savings have no inflationary pressure, it is spending on real goods which causes inflation, and even then, only if the demand exceeds the capacity of suppliers to raise their production levels. If Summers knew all this he would disown all his past advice and deficit hawk cheap talk. He is a world class anti-intellectual. In fact, I suspect by judgement of future historians, Larry Summers, Tim Geitner, Robert Rubin, Greenspan, Kudlow, and the rest, they will all be judged as virtual criminals, or at best as professionally incompetent and grossly negligent.

Setting aside the questionable provenance of any information from Summers, MMT is simply a description of how money works for issuers of currency vs. users of currency. We're all familiar with what a currency user must do to pay the bills, but it's different if you can print the means to repay those bills in the back bedroom...or down at the central bank. For currency users "Tax & Spend" is an accurate description. Revenue must precede spending. But for currency issuers, where would people get the dollars to pay those taxes if government didn't spend them out into the economy first? The accurate description of the procedure is "Spend first, then retrieve some dollars in taxes." And what do we call the dollars not retrieved, left out in the economy. Answer #1: the dollar financial assets of the population. Answer #2: National 'debt' Both answers describe *exactly* the same thing. This mirrors the situation of bank depositors. Their accounts are their asset, but to the bank, they are a liability (the bank owes depositors the money). Now imagine a mob stirred up by a demagogue like Summers marching down to the bank to demand it reduce its liabilities. An honest bank manager might say "But that would reduce the size of your accounts." A truly mad mob would respond "We don't care. We just don't like the word 'debt' because we can only understand the situation of currency users!" ...Not very sensible, even if Larry Summers has a string of honors and initials after his name.

Larry Summers sounds like the sort of person who would argue to the death about the virtues of multi level marketing schemes, and take it as a personal insult if someone used math to tell him he was mistaken. Just to be clear MMT has never been implemented. Unlike Mr Summers regulatory regime regarding convoluted financial instruments.

According to Larry, MMT asserts that: 1). The govt can just print money to finance itself & therefore never needs to worry about paying its bills..... 2). All government debt can be repaid by printing money..... Since even a cursory reading of its underlying axioms would quickly reveal that MMT doesn't come remotely close to making either of these two assertions, one has to conclude that Larry is either intellectually sloppy or just telling bold faced lies. His policy making record would suggest that the former is most likely the case.

Hyperinflation in countries has to do with availability of goods and services in countries not money per say. These sanctions are the cruel tools of destroying currency. This guy is a bought and paid for talking head.

This really makes me lose respect for titles like "Harvard President Emeritus"

Larry Summers Theory was the recipe for the 2008 crash and the growing inequality.

Summers makes a fool of himself again. After losing billions $ for Harvard, he doesn't even realise QE is a version of MMT.

Imagine thinking that printing money is the solution, lmao. My child says shit like that.

3 years later, inflation proved him right. MMT sounds great until a dozen eggs cost $8.

Giving power back to the people is so dangerous. A strong middle class can stand against the new style aristocracy. Larry wants to keep you on a leash.

The big difference is that those countries had debt in someone else’s currency. The US debt is in its own currency. So they can print as much as they like

As a sovereign nation Britain produces its own currency. So how is it possible for a sovereign nation to run out of money and need to go to the IMF for a bailout like Britain did in 1976 ?

This strawman argument is pointless without getting Stephanie Kelton or Warren Mosler on to debate him and provide the other side of the argument.

He cites examples of country that do not meet the "prerequisite" of MMT as examples of situation where MMT did not work so right there he is discredited. Also, MMT does not say that government can print arbitrary amounts of money. They state very clearly that the government is constrained by available resources among them the level of employment.

If we actually "borrowed" money he would be correct, so it's a good thing we don't do that. Treasury bonds "reduce reserves" by offering interest to agree to trade liquidity for gain. Bonds are simply a liquidity swap, the opposite of QE. Why would the monopoly issuer of currency ever "borrow" its own currency to fund spending when it can, and does create as much as it wants to via appropriations? There is no debt except what the government owes in tax credit, which is $1 for every dollar of currency it spends. When a bond matures it is simply moved back to the reserve account of its owner with a small interest payment. Bond holders don't set the interest rate and can never "call in" their debt holdings. Is $22 Trillion too much currency to have in circulation? Remember that bank reserves created by credit cannot retire the debt that created them or be net saved as a store of value. Only money created by Congress can do either. The Fed and Treasury have a combined balance sheet that always equals the national debt. This is obscured as long as GDP growth is sufficient to roll over private debt, but it becomes very apparent as soon as the private sector economy hiccups if the actual net money supply is insufficient. Paying the debt is no more complex than moving bonds back to reserves and could be done tomorrow before noon if Congress wanted. However, paying it by reducing spending and collecting taxes will leave nothing in the economy, as taxes are destroyed, as is revenue from bonds, upon entry to the government sector, not recycled to spending.

The age of the amoral economist must come to an end. They need to expand their expertise from merely the mechanics of the economy and start taking into consideration the people that are at the mercy of that machine. They consider the corporations in their calculations but rarely consider the first order element of our society, people. We are not a nation of corporations, we are a nation of people, and the corporations are here to serve the people of this nation, not the other way around.

Larry Summers is the Scientologist of Socio Economic theory.

Larry sounds very logical and fair. I don't know why such an idea isn't welcome into our fiscal policy, instead they are keeping on chasing wild geese.

1:40 Idea? Since 1970 it's been practice. I think thats the year we got off the gold standard. MMT isn't actually a theory. Its common practice.

What BS. MMT doesn't say "you don't have to worry." MMT-ers say "Worry about Real Limits and Inflation, not running out of -YOUR OWN MONEY."

Where is the person from the other side?

We will see how Australia pulls out of this I guess 🤷‍♀️

This certainly hasn’t aged well

MMT is about balance also... taking money out of the system is an important tool just as much as putting money into the system.

We're not going to do MMT, we're just going to print a bunch of money.

The only criticisms of MMT that seem logical are that corporations get access to higher interest on treasury bonds (because they buy larger amounts of them) that the average American who buys those same bonds doesn't. Also, the interest on these bonds is a passive profit flow into these corporations that the average American cannot enjoy in the same amounts.

So not "money printing" ... That means the United States is going to source dollars from somewhere else?? From where? The United States government is the sole source of dollars that except for taxes , that can be possibly used to pay taxes. Dollars don't grow on trees. Ordinary people don't make dollars. Only Uncle Sam has the monopoly on USA brand dollars.

prof summers wouldnt know a sectoral balance if he tripped over one. the accounting reality is that if the private sector runs a financial deficit against the rest of the world, the government has to cover the financing gap minus the direct capital inflow to prevent a deflationary liquidity crunch. if summers et al were correct, rising government debt should have seen taxes, interest rates and inflation rise over the last two decades. instead the 10 year bond rates have collapsed, inflation threatens to turn into deflation , and the governments doling out tax cuts, and every dark dingy corner of the planet you go to, you have people who will gladly take an american dollar off you. try do that with yuan. furthermore i dont see anyone putting there hand up to run a trade deficit against the americans. to take trumps idea to the extreme , if the americans were to achieve a trade surplus over a prolonged period of time, the rest of the world runs out of american dollars , and then it gets really tricky as to whether you accept other peoples currency. summers is talking accounting nonsense

MMT is modern economics... to call MMT a 'disaster' is calling our current system a disaster, just fyi.

Why do we take these old fools serious?

Surprise surprise, who would have known printing money to support socialism is a bad idea. Just ask third century Rome, Weimar Republic Germany, China in 1947, Yugoslavia in 1994, Zimbabwe and Venezuela.

Tax revenue literally increased every single time taxes were cut aside from the Trump tax cut. Laffer always said there was a peak in the curve, the Laffer curve was never, “cutting taxes always = more tax revenue”. Economists did a study to show the peak is at 33%, so the Laffer curve has always been correct.

If its 'Bills' are in its currency, who else is allowed to pay it? only the currency issuer...simple Larry.

Larry Summers has said that the 2017 tax cuts leading to over $1 trillion of stock buybacks was the wrong thing to do. He said the money should have been spent on fiscal stimulus to repair and build infrastructure. That should have been the headline instead of the bogus MMT is a recipe for disaster. The Right's 2017 tax cuts are a recipe for disaster. Larry is funny. He may not approve of MMT but he does say a lot of things that rich business leaders and politicians don't want to hear.

More tax equals less economic activity..Fiscal responsibility is constantly ignored by our government and yet it is the ONLY cure.

I’m looking into this much further. This is interesting

Larry Summers wants more tax and spend, economic stagnation and deficits at the same time, and also wants weak trade for the US.

what people like Larry summers dont understand is MMT is not telling us we should do this or that. MMT explains what is already happening. Literally, the government just printed between 3-6 Trillion for COVID stimulus and buying corporate bonds. So ya you may hate MMT but it is exactly what is happening now

MMT IS A DESCRIPTION OF HOW THE FEDERAL GOVERNMENT CREATES AND USES MONEY! MMT is not a policy. MMT is not something we need to do. MMT is what we are doing alread:

Dwight Eisenhower begs to differ.

Larry Summers says that he likes fiscal policy, but doesn’t seem to understand that MMT is all about sound fiscal policy! His objection to MMT is either based on a lack of understanding of MMT or more likely on ideological bias.

15 years of MMT got us to this mess today. High inflation, bloated fiscal deficit off a cliff, the average person's purchasing powere being destroyed, etc.

Larry Summer: countries in South American don't control their own currencies and their debts were all in foreign currency amounts. America's debt are all in US dollars. Learn how to read Larry.

It's been in place for a while. Countries he mentioned, aren't the reserve currency. Our power has degraded their economies. Taxes don't pay debts, are in place to stimulate foreign investment. Budgets are a myth. There's always money for bailouts and the military.

Let’s bring on the guy that lost Harvard $1.8 Billion

Lmao typical corporate goon misrepresenting MMT

"Political Actors " good description of them at teh 20 second mark of this article. That's it. "actors" .

So France has the worlds currency in the 70s? Wow, Who knew?

This is what Jim Willies says about MMT... "Reich Economics by any other name." "Modern Monetary Theory is total rubbish and those who sign on are rather moronic but it proliferates as new dogma in sort of a pathetic apologist manner almost funny to try to explain the broken financial system"... Miracles do happen because I never thought I'd ever see these two agreeing... 😂

MMT isn't "a theory that all debts can be paid for by printing money". It's the observation that a state that issues its own currency can technically spend as much as it likes, but the effects of spending create soft economic constraints: spend too little (/ tax too much) and you get unemployment, spent too much (/ tax too little) and you get inflation.

lol you call that a taxes cut ? :sips_martini_in_dubai:

And you trust this guy? Summers was the epitome of banality of evil, telling Varoufakis to step in line with neoliberalism or be thrown out of the big boys play pen. Larry Summers is perhaps in the top 100 evil people this century. He has no idea about monetary dynamics modelling, Steve Keen would obliterate Summers in an economics literacy challenge like he devasted Krugman, like frickin Hulk destroying Loki - and yeah, I know Loki got up and shrugged his ass whooping off, and that's part of the point, neoliberals are doing Zombie economics, they rise from the dead every time logic and reality own them

Fiscal stimulus is due to MMT. This guy is is talking out his ass.

How about falling for Mossad honeypot traps, Larry? Would that be a disaster?

I don't know where he learned about MMT. But he's got it wrong. MMT does not say the government does not need to pay its bills. That's missing things completely. The federal government supplies the currency to the economy, taxes have a purpose but not for funding the government.

The essence of MMt's economic argument that federal government politicians should have "Policy Space" to spend in excess of it's income for what it considers is better for the economy. The same in their minds a great theory that talks about the evil of inequality but when it comes to the reality only politicians should have "Policy Space" when everyone else like the average person and those on less than average incomes should be restrained and have no "Policy Space" to spend more than it's income. Not you, not anyone else but politicians because the MMT pushers are telling everyone else that they are all too stupid and the irony of it all is some are stupid enough to believe them.

This guy is doing damage control by incorrectly describing a theory. I am disappointed in this guy. He is definitely bias. Good job with protecting your buddies,Larry. Maybe these other economies monetary policies failed because they did not follow the laws of supply and demand. Larry is like a doctor who debunks all herbs.

Summers' life and work has been to promote neoliberal economic policies for the dominant "centrist" elites. He opposes MMT only because MMT is seen by economic progressives as a way to argue for the policies they want. He proves this here by only arguing against those progressive policies. But MMT being seen as an argument for those policies over the current, dominant monetary and fiscal policies is contingent on the current situation, actors, and ideologies. That's why the originators of MMT don't argue for either policy (you don't see biologists arguing for "more evolution"), and that's why Summers (apparently) doesn't even have to know what it is to argue against it. (this seems to be a uniquely unfortunate property of the "science" of economics)

Modern Monetary Theory isn’t a recipe- it’s the ingredients.

This guy knows nothing about economics.

Summers is totally misrepresenting MMT, it's alway ok to bailout the private banks with MMT but for the serfs not so much.

It's going to end in disaster.

He hasn’t been proven right. Yet.

Micro finance money is lent to two unemployed land owners; farmers A and B. They buy seed and tend to their farms. After a few months they sell the crops in the market and pay back the loan. Farmer A is lent money from a bank according to Fractional Reserve Banking Farmer B is lent newly created money directly from the central bank which increases the national debt (which is all denominated in the country's own currency). It just printed money as according to MMT. Is the effect on inflation for farmer A different to farmer B?

I can’t believe she said that, why can we just print money since we have the world’s reserve currency? Are you insane, lady???? If you were a resident of another country, and you were to hear that country was going to implement what you just said... would you want to store your value in that currency? That is absolutely nuts. You might as well preach that you are going to abuse your lenders’ trust and destroy their savings.

Modern monetary theory simply explains what already IS. It would be like saying “evolutionary theory would be a disaster”. Larry has been wrong about everything before anyways.

Larry Summers is a liar in my opinion, love his Sophist ways, always making false analogies, the US was tied to gold back then , good try Larry the sophist!.

2:30 is the important part of the video. In which Sara asked Summers if the US government (Federal Reserve + DoT) is already using MMT; which is partially ture when it comes to "fiscal" policy in certain times to finance deficit or to stimulate the slow economy(QE), but it would be dangerous to use it as a "monetary" policy.

What YOU think it not fact !! It's greed the quest for power .

It's dangerous to not create humane programs for all.

I think it's Encarta and Kindles. Because Germany couldn't keep up.

How do you write for papers, but don’t read what your writing about!?! The plan is a tax that covers you medical needs with a co-pay. No more insurance companies making decisions with the excess money yearly. So a tax to replace the payment coming out of your check. So medical isn’t profit driven. Hope you get Donkey of the day!

Ppl in chat: call it what you want but big government goes against this countries founding. You really want a larger central bank dictating winners and losers? What if your service/good or company isnt "woke" enough, what then? Becareful what you wish for

is there any books explaining these examples he gives of printing deficts and how its conistently gone wrong with france, britain and latin america?

Neoliberal corporatist trying to preserve the Status Quo & either doesn't understand MMT or is PURPOSRLY misrepresenting it. It has NEVER been about "just printing" money! "TRICKLE DOWN" is the VOO DOO ecnomics! #LearnMMT!

>Man who causes GFC calls how public finances work a disaster

Summers doesn't seem to understand the subject. Or he is simply pretending to not understand. I'm going to go with the former. Summers, whilst working years ago at some investment house, was described as being a coatrack. His reputation precedes him, but he's listened to. He, like so many of the Meritocratic types swarming Washington, continues to fail upwards, and make a fortune doing it.

Print a bunch of money and you get inflation maybe even hyperinflation especially if most of the output stays the same. Right now we are experiencing supply shock and how do you bolster the demand side when millions of people are under shelter in place and social distancing orders? I would think a stimulus package would need to pay people’s rent for as long as shelter in place is under effect,1200 dollars won’t pay the rent for one month. If you give airlines billions of dollars that still doesn’t increase the demand for airline tickets people are afraid of being exposed to coronavirus in airline terminals and airplanes so how does that work?

Larry Summers is an old fool who’s still stuck in the 20th century. Wake up Larry, we live in the digital era now!

MMT is already in practice dude...stop lying...

working-as-inteded. As the worlds currency we simply print our debt to GDP to 250% like Japan. We deflate the dollar causing devastation in the third world with our increased depreciation. People flock to the US.

Historical fact is that Larry has been proven right when asked "isn't it working now"? by the host. The market was slowing then and the evidence is now the rising cost of interest and lower growth now reflected in stock price falls.

Larry Summers is a fool.

I think he's just slandering modern monetary theory. We can't just do anything, but we can print money if more wealth has been created in the economy and we just match that to what we print, or if we're willing to eat inflation, but MMT is correct. You can print money if you control your currency, you just have to accept the consequences.

there is no amount of debt the banks and gov't won't agree to when they profit from it, but suggest it for people to live on, and that is claimed to be just wrong. would like some links to support his claims that he supported more help for the middle class than the billionaire class