A Beginner’s Guide to MMT
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A Beginner’s Guide to MMT
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Re: A Beginner’s Guide to MMT
#2It seems obvious once you think about it that at the federal level taxes don't pay for spending. The fed can print as much money as it wants. Taxes only serve to remove excess cash from the economy and keep inflation down.
Re: A Beginner’s Guide to MMT
#3>What’s more surprising is how much flak the school of thought is taking from liberal economists who’d appear to be natural allies, such as Larry Summers
That's not in the slightest bit surprising. Larry Summers instinctively sides with the large banks and has essentially built an entire career off that.
He was also one of the advisors to the Soviet Union breakup who told them how to privatise in such a way that oligarchs captured most of the wealth.
Re: A Beginner’s Guide to MMT
#4another primer: https://www.bradford-delong.com/2019/01/what-is-modern-monet...
Re: A Beginner’s Guide to MMT
#5It’s immediately obvious that increasing the money supply and spending the money will result in inflation.
MMT says that the only constraint on spending is inflation, but also turns around and says that you can always print more money. That’s a contradiction.
Printing more money does not change the real wealth in the economy. You can’t create additional purchasing power with an increase in the money supply because prices will adjust to the new level.
Re: A Beginner’s Guide to MMT
#6It seems obvious once you think about it that at the federal level taxes don't pay for spending. The fed can print as much money as it wants. Taxes only serve to remove excess cash from the economy and keep inflation down.
Or, even more abstractly, they serve as an alternative to inflation, which devalues money indiscriminately. Printing money and taxation both transfer value to the fed; but the latter can be crafted & targeted while the former cannot. In practice perhaps the most significant realization of this is that inflation is a tax on wealth while our system today is mostly a tax on income.
Re: A Beginner’s Guide to MMT
#7Completely crazy.
Ten years of QE produced nothing, so we need to try harder. MMT and Unveraal Basic Income - that will like totally save us, dude!
Re: A Beginner’s Guide to MMT
#8The mainstream way of thinking says "the government must tax in order to spend" whereas MMT says "if the government wants to spend it will have to tax".
Re: A Beginner’s Guide to MMT
#9It’s immediately obvious that increasing the money supply and spending the money will result in inflation. MMT says that the only constraint on spending is inflation, but also turns around and says that you can always print more money. That’s a contradiction. Printing more money does not change the real wealth in the economy. You can’t create additional purchasing power with an increase in the money supply because pr…
Yes, but you can steal by diluting the value of existing money.
Re: A Beginner’s Guide to MMT
#10A fear of mine is that MMT gains enough traction to be implemented, but only partially. Similar to what has happened with the ACA. For argument's sake, let's just assume MMT is a sound theory. Regardless, if it's only half-implemented -- without all components for regulating taxes, inflation, and spending -- it could be an absolute disaster.
Additionally, there are concerns about having the government itself involved with regulating inflation and business cycles. An independent Fed, at least in theory, allows for the fed to take a longer view of the economy even if politicians have incentives to care only about the next election cycle. All it would take is one conservative majority congress to semi-dismantle any MMT mechanism and completely mess up any "controls" put in place by MMT proponents.
That being said, it is refreshing to have different ideas being taken seriously enough to enough mainstream conversation. I don't think the field of economics is "solved" (probably far from it) so I think good ideas that challenge the status quo are generally good.