Currency issuers and users

A few comments at MMT blogs on the subject of consolidating the nation's central bank and its treasury.

See here and here.

This argument could probably go on forever, but it is an interesting one. MMT's "general case" is one in which there is a government and at some sub-level a treasury and central bank. The government reigns supreme as a currency issuer since it consolidates both institutions. I don't know why this setup must be the "general case" and everything else anomalous. Why not call an independent central bank and a non-issuing treasury the "general case" and then reason from there? It seems ad hoc to me. I prefer thinking not in terms of hierarchies, nor in some sort of tiered progressions away from the general case, but in terms of poles. At one extreme is a totally independent central bank, at the other is a totally consolidated central bank. In the real world, every institutional setup lies somewhere in between.

This reminds me of an old argument I had back in 2010 at WCI.

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