5 ms·
The 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".
by currymj 8y ago
The 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".
- jonahhorowitz 8y agoI think it's more "the government must spend to be able to tax"?
- doppelganger27 8y agoI'm no expert on this, but I think that wording suggests that the government's goal is to tax, but it seems to me that a government really wants to spend. My understanding of MMT is that it removes the direct relationship between the ideas of spending and taxation, instead tying them both to inflation. Spending increases inflation by adding currency into circulation, and taxation decreases inflation by removing it from circulation. Although I'm not sure how that fits into a one-liner :)
- chombier 8y agoGovernment also needs to tax to ensure sufficient demand for its money ("taxes drive money")