43/ And that gets us the whole “what is inflation?”. Because if it is that it is harder to make ends meet because everything is more expensive. Then they are actually creating MORE inflation.

Yeah, we are exposed to the exchange rate, but now we are killing the economy that’s supposed to compensate, while driving actual living costs even further through the roof.

44/ Housing is also a weird market in general, because once you’re in, you buy and sell in the same market. So that market becomes sort of disconnected from everything else. Because demand is constant and supply is pretty constrained: the people selling their homes and newly built stuff.

But with no construction the supply is even more constrained, and the people buying are mostly the people selling, so it becomes a strange closed loop system.

45/ However, if you are a renter you are also getting hit, again by different effects. The current left coalition (and previous iterations) have wanted to make it less lucrative to be a landlord. So margins have shrunk due to higher taxes etc. But a lot of this has been funded through loans, and so those margins are getting squeezed further. So landlords are either selling off their properties, which are often in the cities, or raising rents. But the housing market is undersupplied so it just absorbs these properties.

So now we have fewer rental properties, which would drive up prices on its own (according to economic theory 😅), but the remaining market is also increasing rent to compensate for higher interest rates.

So even if you rent you are getting hit by the interest rate. And actually it’s worse there, because rents will for sure not go down in the same way mortgages will if/when they reduce the interest rate.

46/ Or in kubernetes analogy (because of Cybercyn and the book The Unaccountability Machine): some stuff in our system (the Norwegian housing market) are auto-scaling in some cloud, some are manually scaled (by buying and adding new servers in our on prem data center) and once the peak in consumption is over, some things might scale down quickly, but some are stuck now with a lot of expensive hardware taking up space in our server racks.

Mortgages are in AWS and rents are on-prem in my very confusing analogy.

47/ I don’t know what the answer is, my earlier idea of constraining the supply of NOK… it looks like they did that, and it had apparently about as much effect as the interest rate (not much if any).

Maybe without these two things it would’ve spiraled out of control… but I don’t think so, because this wasn’t caused by our economy.

So maybe the best thing would’ve been to just accept it? Yeah, the NOK is weak, because the world is rough, increase salaries some and just sit tight? Maybe even stimulate internal growth to compensate?

52/ Ok, I think I get it. MMT says that a deficit isn’t a sign of government overspending, inflation is. (And here they are clearly talking about the overheated economy inflation) So as long as the spending doesn’t cause inflation, it doesn’t matter if you run with a deficit even over a longer period (she mentioned decades).

So basically she is sort of saying that deficits aren’t real because taxes aren’t real.

This is more like the water in a radiator system (my analogy). You can add in water or remove water, but the system isn’t the water. And adding water (money) only becomes a problem when the pressure in the system gets too high and water starts spilling out somewhere.

Basically, money isn’t “real”. It’s… just water in a radiator system in a building. The building and the radiators and the people living there are the real things.

62/ I feel so smart when I read news articles that agree with me 🤓 🤣
“And an interest rate increase will not help, he believes. - The higher the interest rate goes, the more landlords have to raise the rent, and then the interest rate increase is inflationary. It does not have the same effect as in the housing market, where prices fall if interest rates rise. The interest rate is not a good weapon to deal with this kind of inflation. It makes matters worse, he says.”
https://e24.no/norsk-oekonomi/i/93zl4d/uenige-om-leieprisene-det-gjoer-vondt-verre

https://social.vivaldi.net/@Patricia/112720508129615142

65/ After spending ages on inflation, I’m apparently breezing through chapter 3 “The National Debt (That Isn’t)”

Basically, in the same way tax isn’t real (in that it is just a mechanism to remove money from the economy and/or create demand for the currency. MMT says that the deficit isn’t real. Very clear that it is the US they are talking about. To generalize to more countries she picked the UK and I would’ve preferred another more “normal” country.

@Patricia @BenAveling MMT'ers would balk at your description of MMT as something you do. MMT (the theory) is descriptive and not restricted to reserve currencies.

What they mean when they say "the national debt isn't real" is that it's a misnomer designed to invoke fear, when in reality it's just the amount of private and foreign savings in USD.
The same goes for NOK. Whatever money the government has not yet claimed in taxes can hardly be called a debt, and it certainly can't be repayed.

@Patricia @BenAveling @Paxxi yeah, I do seem to remember her glossing over it pretty quickly (it's been a while since I read the book).

I remain confident, even though I can't "prove" it, because I remember sooooo many discussions and Twitter before it went 💩, where critics would attack MMT saying "MMT is printing money" or "MMT is impossible to do unless so and so" and them having to untangle the monetary analysis (what they see as MMT) from what had previously been ruled out as impossible.

@joelving @BenAveling @Paxxi its absolutely unmistakable in the book, but if Wikipedia is more your jam its right there in the table.

Achieving full employment: “Main strategy uses fiscal policy; running a budget deficit large enough to achieve full employment through a job guarantee.”

https://en.wikipedia.org/wiki/Modern_monetary_theory