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Of course spending matters. MMT is in agreement. Here's the main public advocate of MMT tweeting that: https://twitter.com/stephaniekelton/status/1044313733600

Of course spending matters. MMT is in agreement. Here's the main public advocate of MMT tweeting that: https://twitter.com/stephaniekelton/status/1044313733600874496 https://twitter.com/stephaniekelton/status/10443137336008744... Before we continue this discussion, you need to define "printing money". Because I will provide the definition: in the MMT worldview, printing money is synonymous with government deficit spending. Can we agree on that definition? Ok, then inflation is a controllable problem. Because what I'm suggesting is increasing government spending to pay for Medicare. That's like... pushing on a gas pedal. It can create inflation. Now, there are 2 ways to deal with inflation: 1) Stop pushing on the gas pedal. Cut spending. 2) Raise taxes. That's like pushing on the brakes. Because my definition of "printing money" is "deficit spending", and raising taxes lowers the deficit. So we shouldn't be afraid of inflation, because it is something we can control. And if we start by spending first on Medicare, and then taxing later to control inflation... then we've stabilized the size of the deficit while growing the overall size of the federal government budget. And there's Medicare for All.

ikeboy 8y ago
No, you can print money without spending. Central bank is independent.
- jganetsk 8y ago
  I'm not sure what we are really arguing about at this point. I'm claiming that the government would increase deficit spending to pay for Medicare For All. If you want to discuss the impact of having a larger government deficit, I would agree with you that inflation is the potential risk. We can have that discussion. I'm probably more optimistic about the risk of inflation and the effectiveness of mechanisms for controlling inflation. If you want to discuss government debt default risk for a country that prints its own currency, MMT and many mainstream economists says it is zero. If you want to discuss technical constraints on the size of the deficit for a country that prints its own currency (through mechanisms like bond vigilantes, etc) MMT would say there is no constraint. There is plenty of evidence to support this. Just look at what's happening with the US federal government deficit right now. If you want to discuss what fraction of GDP is appropriate for government spending, that's an interesting conversation and would be curious to hear your thoughts. Central banks are a necessary mechanism, as you point out, and need to do their job well. But the main questions in this debate are around fiscal policy, not monetary policy.

ikeboy 8y ago

No, you can print money without spending. Central bank is independent.

jganetsk 8y ago
I'm not sure what we are really arguing about at this point. I'm claiming that the government would increase deficit spending to pay for Medicare For All. If you want to discuss the impact of having a larger government deficit, I would agree with you that inflation is the potential risk. We can have that discussion. I'm probably more optimistic about the risk of inflation and the effectiveness of mechanisms for controlling inflation. If you want to discuss government debt default risk for a country that prints its own currency, MMT and many mainstream economists says it is zero. If you want to discuss technical constraints on the size of the deficit for a country that prints its own currency (through mechanisms like bond vigilantes, etc) MMT would say there is no constraint. There is plenty of evidence to support this. Just look at what's happening with the US federal government deficit right now. If you want to discuss what fraction of GDP is appropriate for government spending, that's an interesting conversation and would be curious to hear your thoughts. Central banks are a necessary mechanism, as you point out, and need to do their job well. But the main questions in this debate are around fiscal policy, not monetary policy.