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Tom, "wealth" is not a word which appears in the MMT literature very often. I'm struggling with understanding this from an MMT perspective and thinking of S=I and JKH's S=I + (S-I). It seems from an MMT perspective that private debt would not add to "wealth/net worth" per se since for every dollar of savings there is a dollar of dis-saving. But it also seems beyond coincidence that the dollar value of US "wealth/net worth" according to this report is approximately equal to the sum total of government debt plus private debt. Can you give me some thoughts or point me toward some literature which will shine a light?
Dave, MMT takes the same definition of "wealth" as everyone else. It is net worth. The net worth (equity) of firms is owned by households, so a country's net worth is basically the public net worth and private net worth including citizens ownership of foreign assets, minus net worth of foreigners in domestic assets. As Piketty point out public net worth is always much less than private net worth in capitalistic societies and that net worth is distributed very unevenly in most countries.
The net worth of households includes equity shares with the equity on firms books on the RHS, and net financial assets created by fiscal deficits. private saving nets to zero, but there are net savers offset by net borrowers (dissavers).
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Tom, "wealth" is not a word which appears in the MMT literature very often. I'm struggling with understanding this from an MMT perspective and thinking of S=I and JKH's S=I + (S-I). It seems from an MMT perspective that private debt would not add to "wealth/net worth" per se since for every dollar of savings there is a dollar of dis-saving. But it also seems beyond coincidence that the dollar value of US "wealth/net worth" according to this report is approximately equal to the sum total of government debt plus private debt. Can you give me some thoughts or point me toward some literature which will shine a light?
Dave, MMT takes the same definition of "wealth" as everyone else. It is net worth. The net worth (equity) of firms is owned by households, so a country's net worth is basically the public net worth and private net worth including citizens ownership of foreign assets, minus net worth of foreigners in domestic assets. As Piketty point out public net worth is always much less than private net worth in capitalistic societies and that net worth is distributed very unevenly in most countries.
The net worth of households includes equity shares with the equity on firms books on the RHS, and net financial assets created by fiscal deficits. private saving nets to zero, but there are net savers offset by net borrowers (dissavers).
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