re: #320 lostlakehiker

I’m glad to see your insane claims have now been moderated slightly. You previously claimed the monetary base had expanded by a factor of four since 2008. It’s nice to see you now acknowledge this claim was wrong, even as you are making— or rather, transmitting another claim.

However, this sentence:

The monetary base measures the amount of money Uncle Sam prints in order to buy things, whether those things are financial securities, tanks, space ships, or lunch for the president.

Is just flat out wrong, and makes me doubt Kotlikoff’s credibilty entirely.

The monetary base is not simply the amount of money that the US government ‘prints’. If a bank makes a profit on an investment, that increases the monetary base. If the bank simply claims an asset is worth more, that increases the monetary base. Neither of those necessitates any action on the part of the US government. They are both affected highly by the monetary supply, but neither of them is the US government printing money to buy anything.

Finally, in order to actually understand the monetary base, you have to take into account the velocity of money.