Monday 25 June 2018

The Key Difference between Transfinancial Economics, and Modern Monetary Theory, or MMT.



The following is a statement, or extract from a certain site which hosts a "paper," or presentation on Transfinancial Economics







''......It should be said too that MMT seems to be gaining some traction notably among the American progressives. It can be summed up in one sentence. Essentially, it believes that government should create new money to fund public expenditure, and taxation itself is only used as a means of controlling inflation.  This is a good idea. One recommends it as a good start in the development towards a more Non-Debt Based Economic System. On a downside note, the degree of inflation taxation within the MMT concept could possibly become increasingly greater over time, and hence, lead a grave social, economic, and political situation... when the tax debt could become "too heavy". However, the big advantage of MMT has over TFE in its Advanced Stage is that it would require time to set up, but the amount of new money it could create, and safely phase in would ultimately be far greater than MMT. The reason for this is that it would be possible to gradually increase the levels of growth and potential inflation in such a way as to retain the value of the currency (This is explained later in the text). Such a process can only be successfully achievable if the economy can be monitored, and controlled in Real-Time, or near Real-Time. Furthermore, taxation itself could be phased out altogether as a means of controlling inflation, and only used in an emergency situation.''



For further explanation please go to the link below. TFE can also be seen as the most advanced, and most "scientific" system in Economics yet to be fully developed.


https://wiki.p2pfoundation.net/Transfinancial_Economics


R.Searle the Blogger, and Originator of TFE

36 comments:

  1. Both TFE and the creation of money by MMT are the same thing in their basic natures. Both are dishonest yet have been practiced by many governments as a deliberate means for inflating the prices of goods or deflating the value of the currency). Savers will loose and debtors gain when the currency is made less useful in this way. A government which allows this to happen or which deliberately creates money so that it does, is not an honest. In practice it will do this before elections so as to gain favor with some of the public who find that the interest on investment rises to a related degree.

    Without any taxation the degree of the new money needed to cover national expenditure would be enormous, and the country would be in a state of hyperinflation, so it is not what is needed! Similarly to wipe out the national debt would have a similar adverse effect. Hyperinflation has been tried before and it results in the substitution of a foreign currency for popular exchanges of goods and services.

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  2. With respect you do not fully understand TFE. It is more advanced than MMT. But the idea of transmitting new money safely into the economy is basically the same for both paradigms. The same though notably goes to Social Credit.

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