It’s either ZIRP or this. Take you pick

MMT shows money is chartal: taxes create demand. But there's no global tax authority. That's the fundamental int’l money problem- & why EVERY suggestion automatically reverts to idea needs to be “backed” & thus pegs. Pegs were ALWAYS the problem. But if no global tax…then what?

An Indecent Proposal How to Complete Chartalism and End the International Dollar System On Pegs, Rates, Governance, and the Only International Monetary System That Avoids All Three open.substack.com/pub/clintbal...

Imagine a world with: -universal Fed-style swap access, -automatic liquidity provision, -no sanctions risk, -guaranteed trade settlement, -robust international legal institutions. How many reserves would countries want? Probably far fewer.

A six-word clause from 1935, written to address that era's specific banking politics, became the foundation on which a century of monetary theory, deficit orthodoxy, and financialization was constructed

6 little words in the Banking Act of 1935 - These force the system that confuses the public, even the highly curious/educated public, and many/(most) economists, into profoundly misunderstanding the system we have. Accounting shakes out to OMF, but appearace radically deceiving

Why does the world hold $12 trillion in reserves? Not because of prudent central banking, but because the international dollar system lacks a standing, unconditional settlement backstop. Countries cannot rely on automatic access to dollar liquidity, so they self-insure by

Imagine a world with: -universal Fed-style swap access, -automatic liquidity provision, -no sanctions risk, -guaranteed trade settlement, -robust international legal institutions. How many reserves would countries want? Probably far fewer.

More fundamentally: Publicly created privileges should be conditional on public obligations.

Mainstream Macroeconomics assumptions repeatedly require a neutral rate concept. So monetary economics repeatedly invents one. The idea that there must exist some interest-rate benchmark coordinating the system is never abandoned:

Zero is what safe assets cost when you've actually made them safe

Functionally, r* is a metaphysical substitute for gold #econsky

Functionally, r* is a metaphysical substitute for gold #econsky

“let me reassure you that I have discussed this with bond traders, central bankers & more than a few financial economists, and these conversations have always ended with them agreeing that in principle the bond market is an anachronism which we do not need open.substack.com/pub/stevenha... #econsky

“Let me share with you what it is like to step into the mainstream economics department of a university and give a talk about modern monetary theory.” open.substack.com/pub/stevenha... #econsky

Funny that the politically acceptable, boringly technocratic (& simple) steps of allowing The Fed to issue securities & expanding FDIC would collapse all kinds of overly complex/politically radioactive debates on “the debt,” bond markets, banks etc. And many wouldn’t even know why

Look at normal countries (NOT UK) & core relationships become easier to see. Why? bc “the bond market”= three different stories confusingly mixed: Bonds arising from domestic deficits. Bonds held abroad bc trade leaves foreigners w the currency. And bonds as portfolio/collateral assets.

The debate usually presented as “can government afford debt?” should be: Should core duration and collateral infrastructure be publicly supplied through sovereign bonds, or more privately generated and absorbed?

Mainstream Econ and Finance say they are for lean government and free markets. Nothing could be further from the truth: #econsky open.substack.com/pub/clintbal...

A Geochartalist Response To Ballinger on the Night Watchman State open.substack.com/pub/geochart... #econsky

Mainstream Econ and Finance say they are for lean government and free markets. Nothing could be further from the truth: #econsky open.substack.com/pub/clintbal...

“The Mosler-Cantillon-Menger Synthesis: A Complete Theory of the Price Level” zenodo.org/records/1954... #econsky

"À la recherche de débats perdus": how model setup language structures economic analysis A sampling of standard modeling phrases and what earlier economists debated and later ones forgot clintballinger.substack.com/p/a-la-reche... #econsky

The Intercept Is Where Causality Lives: A Structural Turn in Economics Economics happens in the intercept clintballinger.substack.com/p/the-interc... #econsky

This post introduces the non-scalable intercept – a coordination threshold in network industries crossed only once without destroying value.

À LA RECHERCHE DE DÉBATS PERDUS Modeling terms and what earlier economists debated, and later ones forgot How model-setup language structures economic analysis clintballinger.substack.com/p/a-la-reche... #econsky

The Non-Scalable Intercept: When Networks Defy Antitrust Thresholds that create markets, not margins clintballinger.substack.com/p/the-non-sc... #econsky

The Non-Scalable Intercept: When Networks Defy Antitrust Thresholds that create markets, not margins clintballinger.substack.com/p/the-non-sc... #econsky

À LA RECHERCHE DE DÉBATS PERDUS Modeling terms and what earlier economists debated, and later ones forgot How model-setup language structures economic analysis clintballinger.substack.com/p/a-la-reche... #econsky

"À la recherche de débats perdus": how model setup language structures economic analysis A sampling of standard modeling phrases and what earlier economists debated and later ones forgot clintballinger.substack.com/p/a-la-reche... #econsky

Before Identification and Inference: Where the Causal Claim Enters clintballinger.substack.com/p/before-ide... #econsky

Before Identification and Inference: Where the Causal Claim Enters clintballinger.substack.com/p/before-ide... #econsky

Zero Is Not a Floor. It Is the Foundation. Why the Decline in r* Signals Progress, Not Stagnation clintballinger.substack.com/p/zero-is-no... #econsky

Causality in applied economics doesn’t come from estimators, asymptotics, or robustness checks. It enters earlier - when the design defines the baseline and the shock. Everything else just measures it. #econsky open.substack.com/pub/clintbal...

Causality in applied economics doesn’t come from estimators, asymptotics, or robustness checks. It enters earlier - when the design defines the baseline and the shock. Everything else just measures it. #econsky open.substack.com/pub/clintbal...

The Intercept Is Where Causality Lives: A Structural Turn in Economics Economics happens in the intercept clintballinger.substack.com/p/the-interc... #econsky

Zero Is Not a Floor. It Is the Foundation. Why the Decline in r* Signals Progress, Not Stagnation clintballinger.substack.com/p/zero-is-no... #econsky

The Defector’s Dividend: Administered Rates and the Corruption of the Global Price "Interest rates are a price, not a policy vector When we ask them to stabilize employment, inflation, FX, asset prices, and inequality, they cease to function as prices at all" substack.com/@clintballin... #econsky

@nathantankus.bsky.social You probably have already read/seen this but just in case. Looks interesting sites.utexas.edu/macro/2025/1...

“Assume interiority conditions” A technical convenience- Requires everyone consumes positive amounts and remains in the market. Absolute deprivation, exclusion, and starvation as equilibrium outcomes become impossible by assumption

“Without loss of generality, normalize…” Lossless for whom? Normalization fixes the unit of account- what everything else is measured against - anchoring reference points and binding constraints before optimization begins. Just “WLOG” though

“Assume a complete probability space” Every outcome must have an assignable probability. This replaces Knightian uncertainty, regime change, and genuine unknowability w calculable risk. What can’t be priced simply vanishes

Central banks must tighten more than models predict because multiple offsetting channels taken together weaken transmission. I think there should be a clearer term for this. I suggest: “Fundamental overshoot bias” 1/2 #econsky

“With the usual transversality condition…” “Usual” for whom? Boundary condtion requires the present value of terminal assets go to zero. Rules out debt monetization as equilibrium & perpetual rollover. Austerity appears as mathematical necessity rather than political choice

“Assume preferences satisfy Gorman polar form” Sounds like a technical aggregation condition. It requires linear income effects, distribution-independent demand, and redistribution neutrality A strong political claim enters as a theorem

“Calibrate parameters to match long-run moments” Sounds purely empirical. But calibration treats observed distributions as benchmarks the model must reproduce, anchoring it to existing inequality. History becomes validation rather than an object of explanation

"Under standard Inada conditions…” Standard according to which world? These conditions rule out subsistence constraints, zero marginal product of capital, poverty traps, and hard resource limits. Entire development paths disappear under “regularity”

One more example that I also mean to suggest how *over time* formalization absorbed previously contested questions into background conditions: “Assume lump-sum transfers are available / solve the planner’s problem / assume the Second Welfare Theorem applies” ...

🧵1/x I’ve been thinking about how mainstream Economics encodes political commitments before any formal results for a long time. Below is a more systematic attempt to show how this happens through routine model-setup-language that is treated as mundanely technical #econsky