Comments URL: https://news.ycombinator.com/item?id=41527684

Points: 1

# Comments: 0

And the conclusion is the US generates more wealth for the middle class than Europe does.

Citation needed. No, Europe is not doing just fine. https://www.noahpinion.blog/p/americans-are-generally-richer...

- https://www.theatlantic.com/science/archive/2015/11/the-voca... - https://www.wired.com/2014/11/whats-up-with-that-smells-lang...

Another way of looking at the problem: generally, money is printed by banks, not by governments. The liabilities of the banking sector is precisely what we use as money. A bank is a "debt monetizer": it holds assets (often debt) on one side of the balance sheet, and balances that against money as a liability. https://nathantankus.substack.com/p/banks-as-debt-monetizers...

This property holds true for both central banks and private banks. They both print money that is balanced by assets on the other side of the balance sheet.

There are some benefits to this worldview:

- We have a unified model of banking that explains both central and private banks. "“Everyone can create money; the problem is to get it accepted“ -Hyman Minsky

- In a very real sense, all money is backed by something

If you just print money and use it outside of this framework, you essentially get cryptocurrency: https://www.crisesnotes.com/the-dangerous-brilliance-of-issu...

Comments URL: https://news.ycombinator.com/item?id=33769945

Points: 6

# Comments: 5

- Decreased consumer savings - Decreased foreign savings

Plugged into the profit equation: https://www.levyforecast.com/assets/Profits.pdf

US corporate profits should be shooting back up

> yet we are in the middle of pandemic, millions get sick every day, inflation 30yr high, supply shortages

None of these things impact the aggregate profitability of the corporate sector. Please read "Where Profits Come From" [1]. The Kalecki-Levy profits equation says:

Profits before tax = + Investment – Nonbusiness saving + Dividends + Corporate profits taxes

Profits for the most part come from the "nonbusiness saving" term, which is the government budget deficit minus the trade deficit minus household savings. The numbers are looking very good. [2]

> edit: i can't help but think there will be a counter reaction to the Fed printing dollars recklessly in 2020

> and i'm even more scared Fed will go on a printing spree again to keep the current bubble from popping

It's fascinating to me that in times of outsize fiscal stimulus, people continue to blame monetary policy on all of our economic woes. If you think that monetary policy has a much larger impact than fiscal policy, you have it backwards. Monetary policy has far less impact than is commonly stated. The Fed does not really print money, it swaps one highly liquid US government asset for another. And the size of bank balance sheets do not change when this happens. And repeat after me: banks cannot and do not lend out reserves [3]

[1] https://www.levyforecast.com/assets/Profits.pdf

[2] https://seekingalpha.com/article/4475023-white-house-fed-inf...

[3] https://www.hks.harvard.edu/sites/default/files/centers/mrcb...

Comments URL: https://news.ycombinator.com/item?id=29234183

Points: 1

# Comments: 0

If a company issues $1000 of new stock, then that's an inflow of $1000 into the company. And if it buys back $1000 of stock, that's an outflow.

This kind of analysis is commonly applied to ETFs, for example, because ETFs will manage their outstanding shares by the issuance/redemption of creation units. https://www.investopedia.com/terms/c/creationunit.asp

You can certainly apply this analysis in aggregate, and you can also compute the net flow. I don't know if that's what the article posted here is doing.

Also, people talk about monetary policy as driving this, and that's wrong. Fiscal policy drives this (we've had a lot of new government debt issued in the last few years). Even though it's orthodox economics to attribute this to monetary policy, it's flat out wrong. Monetary policy does not impact net assets of the private sector. It's neutral in that regard. Fiscal policy definitely impacts net assets of the private sector. If you want to learn more, you can read "Where Do Profits Come From?" https://www.levyforecast.com/assets/Profits.pdf

With a Kafka compatibility shim: https://github.com/googleapis/java-pubsublite-kafka

Disclaimer: I work for GCP.

With a Kafka compatibility shim: https://github.com/googleapis/java-pubsublite-kafka

Disclaimer: I work on GCP.

[1] https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years