NO.238 The economic policies allowed by the Japanese government are pension government bonds and Keynes' policy. ・・・For Japan only, the Modern Monetary Theory, abbreviation, MMT theory, is claimed to be correct.


I dare argue that the MMT theory is correct only in Japan.

This is an article that summarizes my previous articles and concludes.

Reference Article





Here is the MMT theory I heard. I remember my source was Wikipedia, but it may have been rewritten. The following description was not found.


"When the following two conditions are satisfied, the government will not fail the government finances no matter how much government bonds are issued.

Condition 1 Most of government bonds issued by the government are held by persons belonging to the country.

Condition 2 The country's inflation rate is kept below a properly set upper limit. "

At present, many Nobel laureates in economics oppose MMT theory. "Causes hyperinflation," seems to be the reason for their claim.
Hyperinflation is not a problem for Japan's pension bonds and Keynes' policy.
This fits the principle of macroeconomics.

My recommendations on issuance of government bonds.

I make the following suggestions.

Going forward, the Government of Japan will limit the purchasers of government bonds to the Bank of Japan. Going forward, we will set the interest rate on all government bonds issued by the Japanese government to 0%.
In the future, JGBs that are due for redemption will be redeemed by issuing new government bonds.

The government issues government bonds, and the Bank of Japan issues new Banknotes and purchases the government bonds. The government will implement the Keynes policy and provide pensions with funds raised through government bonds.

The purpose of Keynes's policy is to hire people and pay them. It is assumed that there are many people who are employed by Keynes policy and need to be paid.
This policy is based on the premise that there are many people who want to buy a product but have no or insufficient income and cannot purchase the product sufficiently.
People employed under the Keynesian policy purchase goods when paid. Goods are produced in an amount corresponding to the total amount of wages paid. There are products that are worth the total amount of BOJ issued by the Bank of Japan to purchase government bonds.
That is, it does not result in hyperinflation.
The fact that inflation does not exceed the set limit means that Keynesian policies are being implemented on the scale of those who need to be employed under Keynesian policies.

Regarding the payment of pensions through pension government bonds, it is a condition that the recipient of the pension uses up the pension.
Using up the pension means that the product will be purchased for the amount of the pension used. This means that the Bank of Japan issued the amount equivalent to the purchase amount of the pension government bonds, and the corresponding amount of products is produced.
This means that the Bank of Japan has been supplied to society with a total amount corresponding to the amount of goods purchased. This means that inflation is kept below a reasonable upper limit.

There is no need to reduce Japan's national financial debt.

Japanese financial bureaucrats often say "fiscal discipline." Finance bureaucrats seek to implement a fiscal consolidation policy called "bone reform."
Let's conclude.
Never let the finance bureaucrats do this.

Japanese finance bureaucrats do not understand macroeconomics and the nature of the economy. This was evident during the 100 trillion yen Keynes policy implemented by Finance Minister Miyazawa during the Obuchi Cabinet era.

Reference Article


If this policy had been carried out soundly, it would have been a special demand of about 100 trillion yen. There must have been an explosive economic growth effect.
There should have been a clear economic growth effect in everyone's eyes. However, in reality, no such economic phenomenon has occurred.

What happened was that Japan's national debt increased by 100 trillion yen and Japanese personal assets increased by only 100 trillion yen.
It was as if the amount of JGB issued was added to the balance of someone's bank account.

"The amount of the government bonds issued was added to the balance of someone's bank account as it was."
Other than that, it was impossible.

Finance bureaucrats will try to reimburse this national financial debt with taxes collected from the people. That would be "bone reform."
Doing so would cause a serious recession. If corporate bankruptcy continues and a large number of unemployed people emerge, the Japanese economy will enter the Great Depression.

Reference Article


Restrict buyers of Japanese government bonds to the Bank of Japan. Set Japanese government bond interest rates to zero.
As long as these two conditions are met, there is no problem if Japan's national financial debt continues to expand forever. There is no problem if the BOJ continues to raise funds to redeem government bonds by purchasing government bonds.

In the past, government bonds purchased by people other than the Bank of Japan will be redeemed in the manner described above. Eventually, the JGB holders will be solely the Bank of Japan.

Finally, the next article will update and fix.
The Bank of Japan continues to purchase government bonds and receivables as part of its quantitative easing policy.
Unless the government bonds and receivables purchased by the Bank of Japan are managed in the financial markets, it will not increase the Great Depression.







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