It's great that Germany is doing this and I think with the instability they are feeling it makes total sense. That said, it is so frustrating to hear from world governments that we don't have the...
It's great that Germany is doing this and I think with the instability they are feeling it makes total sense.
That said, it is so frustrating to hear from world governments that we don't have the funds to quickly switch over our energy grids to renewables. Reducing/removing European dependence on Russian oil/gas would have a much bigger effect than putting together a defense force (and it isn't so geopolitically contentious).
I think the lesson of the global supply crunch is that in the short term, it's less "don't have the funds" and more "don't have the manufacturing capacity or logistics." Even when a large,...
I think the lesson of the global supply crunch is that in the short term, it's less "don't have the funds" and more "don't have the manufacturing capacity or logistics." Even when a large, government-sized source of funding says "go," building infrastructure takes time.
Even switching to different sources of natural gas would take a while. I've read that building a new liquified natural gas terminal takes years. Looks like Germany is doing it though:
Germany has decided to accelerate work to build two LNG terminals in the country to help reduce dependence on Russian gas imports, Chancellor Olaf Scholz said Feb. 27.
[...]
Germany has no LNG import terminals at present, with two projects currently in the development stage -- the 8 Bcm/year terminal at Brunsbuttel and a 12 Bcm/year facility at Stade.
[...]
Germany is linked directly to Russia via the 55 Bcm/year Nord Stream pipeline and can also import Russian gas via Belarus, Poland and Ukraine.
I'm somewhat surprised that I haven't seen any talk about a tariff on Russian natural gas, though. Maybe it could fund NATO? It would be a carbon / geopolitical risk tax.
I appreciate the thoughtful insight and great analysis of the current situation. Also very onboard with your proposed tariff. Your handle on the logistics/development of infrastructure always...
I appreciate the thoughtful insight and great analysis of the current situation. Also very onboard with your proposed tariff. Your handle on the logistics/development of infrastructure always really impresses me.
I think I'm miscommunicating my frustration. Regardless of this current moment (both pandemic and Russian Aggression), it feels like whenever progressive legislation to move away from gas/oil is proposed the popular response is to balk at the cost. "We don't have that kind of money!" "Who would pay for it!" and all the other usual exclamations. Within the United States we can just look at Build Back Better and the Green New Deal. When events like this happen it shatters that illusion for me. The reframing is "We have the funding, but it's only for reactive bullshit." It's too little too late now, but imagine the long term geo-political effect moving away from petroleum could have on our world. Our reliance on OPEC/Russia would be heavily reduced and Russia wouldn't have the leverage that they currently do. I'm really sick of reactive politics/regulation/legislation.
John Stewart's podcast has had a few episodes lately discussing this exact thing. He's talked to former Fed chair, and a few economists about MMT, basically asking this same question. It was...
Within the United States we can just look at Build Back Better and the Green New Deal. When events like this happen it shatters that illusion for me. The reframing is "We have the funding, but it's only for reactive bullshit."
John Stewart's podcast has had a few episodes lately discussing this exact thing. He's talked to former Fed chair, and a few economists about MMT, basically asking this same question.
It was starkly obvious to me that after years of legislation being shot down with cries of "oh but how will we pay for it" that during the pandemic the federal government just miraculously shat out a few trillion dollars and sent people checks. Who paid for it? Nobody, the federal government has the ability and sole authority to create USD out of thin air. So they did.
I'm not an MMT guy but from what I do know inflation is acknowledged as the primary limit on printing money. Where they differ I think (not 100% sure on this) is that taxation is another lever...
I'm not an MMT guy but from what I do know inflation is acknowledged as the primary limit on printing money. Where they differ I think (not 100% sure on this) is that taxation is another lever that can be used to control inflation alongside the money supply (or is part of the same lever). I'm not the person to argue if that's correct or incorrect but on the surface I've heard it explained as analogous to an MMO where "money-sinks" are used to control currency inflation. So I don't think MMT people would disagree with 'coincidental' inflation not being coincidental.
Cool, I'll have to check them out. If you haven't checked out Stephanie Kelton's work with Modern Monetary Theory you should check out The Deficit Myth: Modern Monetary Theory and the Birth of the...
John Stewart's podcast has had a few episodes lately discussing this exact thing. He's talked to former Fed chair, and a few economists about MMT, basically asking this same question.
Cool, I'll have to check them out.
It was starkly obvious to me that after years of legislation being shot down with cries of "oh but how will we pay for it" that during the pandemic the federal government just miraculously shat out a few trillion dollars and sent people checks. Who paid for it? Nobody, the federal government has the ability and sole authority to create USD out of thin air. So they did.
If you haven't checked out Stephanie Kelton's work with Modern Monetary Theory you should check out The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy. It's a great read.
It's hidden within the article, here's the section mentioned (emphasis mine).
It's hidden within the article, here's the section mentioned (emphasis mine).
German Chancellor Olaf Scholz’s announcement of new defense funding is hugely significant for Germany, which has come under criticism from the United States and other NATO allies for not investing adequately in its defense budget. NATO member states committed to spending 2% of their GDP on defense, but Germany has consistently spent much less.
“It’s clear we need to invest significantly more in the security of our country, in order to protect our freedom and our democracy,” Scholz told a special session of the Bundestag in Berlin.
Scholz said the 100 billion euro fund ($113 billion) was currently a one-time measure for 2022. It wasn’t immediately clear whether similar funding would be allocated in future years. But Scholz indicated Germany will exceed the 2% of GDP threshold going forward, signaling an overall future increase in defense spending.
It's great that Germany is doing this and I think with the instability they are feeling it makes total sense.
That said, it is so frustrating to hear from world governments that we don't have the funds to quickly switch over our energy grids to renewables. Reducing/removing European dependence on Russian oil/gas would have a much bigger effect than putting together a defense force (and it isn't so geopolitically contentious).
I think the lesson of the global supply crunch is that in the short term, it's less "don't have the funds" and more "don't have the manufacturing capacity or logistics." Even when a large, government-sized source of funding says "go," building infrastructure takes time.
Even switching to different sources of natural gas would take a while. I've read that building a new liquified natural gas terminal takes years. Looks like Germany is doing it though:
Germany to push ahead with two LNG terminals to reduce Russian gas dependence: Scholz
[...]
[...]
I'm somewhat surprised that I haven't seen any talk about a tariff on Russian natural gas, though. Maybe it could fund NATO? It would be a carbon / geopolitical risk tax.
I appreciate the thoughtful insight and great analysis of the current situation. Also very onboard with your proposed tariff. Your handle on the logistics/development of infrastructure always really impresses me.
I think I'm miscommunicating my frustration. Regardless of this current moment (both pandemic and Russian Aggression), it feels like whenever progressive legislation to move away from gas/oil is proposed the popular response is to balk at the cost. "We don't have that kind of money!" "Who would pay for it!" and all the other usual exclamations. Within the United States we can just look at Build Back Better and the Green New Deal. When events like this happen it shatters that illusion for me. The reframing is "We have the funding, but it's only for reactive bullshit." It's too little too late now, but imagine the long term geo-political effect moving away from petroleum could have on our world. Our reliance on OPEC/Russia would be heavily reduced and Russia wouldn't have the leverage that they currently do. I'm really sick of reactive politics/regulation/legislation.
John Stewart's podcast has had a few episodes lately discussing this exact thing. He's talked to former Fed chair, and a few economists about MMT, basically asking this same question.
It was starkly obvious to me that after years of legislation being shot down with cries of "oh but how will we pay for it" that during the pandemic the federal government just miraculously shat out a few trillion dollars and sent people checks. Who paid for it? Nobody, the federal government has the ability and sole authority to create USD out of thin air. So they did.
I'm not an MMT guy but from what I do know inflation is acknowledged as the primary limit on printing money. Where they differ I think (not 100% sure on this) is that taxation is another lever that can be used to control inflation alongside the money supply (or is part of the same lever). I'm not the person to argue if that's correct or incorrect but on the surface I've heard it explained as analogous to an MMO where "money-sinks" are used to control currency inflation. So I don't think MMT people would disagree with 'coincidental' inflation not being coincidental.
Cool, I'll have to check them out.
If you haven't checked out Stephanie Kelton's work with Modern Monetary Theory you should check out The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy. It's a great read.
I'm actually in the middle of reading that book already! I set it down but really need to pick it back up.
Is great that they're doing this, but it's incredibly sad that they need to do it.
It's hidden within the article, here's the section mentioned (emphasis mine).