- Incredulity: "That's crazy!"
- Fear: "Zimbabwe! Weimar!"
- Moral indignation: "You'd destroy our economy!"
- Anger: "You're a dirty pinko commie fascist!"
Scott Pelley: Is that tax money that the Fed is spending?Ben Bernanke: It's not tax money...We simply use the computer to mark up the size of the account.
"As the sole manufacturer of Dollars, whose debt is denominated in Dollars, the US government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational."
"Of course not. They can't run out of their own IOUs."
"Deposits create reserves. So the central bank will accommodate the demand for reserves by creating them in loans. Banks repay those loans to the central bank by returning the reserves to the central bank." (Much the same way as the firm repaid the bank in the simpler model with which we started.)
"I did not say that government ought to buy everything for sale – the size of government is a political decision with economic effects. I did not say that deficits cannot be inflationary – deficits that are too big can cause inflation. I did not say that deficits cannot affect exchange rates. [The value of the] currency can go up and down."Though called Modern Monetary Theory, economists have understood all of the above for a long time. Wray shared quotes from 1832 that showed a sound understanding of all these principles. And John Maynard Keynes pointed out that modern money, or the credit-based money we have today, is at least 4,000 years old."