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It's pretty fringe; virtually all economists either Disagree or Strongly Disagree with the theory[1]. When weighted by confidence, 72% of economists strongly di
by bhupy 6y ago
It's pretty fringe; virtually all economists either Disagree or Strongly Disagree with the theory[1]. When weighted by confidence, 72% of economists strongly disagree.
Also, this works both ways — if we can MMT unlimited money to fund spending, why pay taxes at all? We should, in theory, be able to cut taxes to 0 (or as close to 0 limited by real scarcity) and MMT the entire budget.
[1] http://www.igmchicago.org/surveys/modern-monetary-theory/ http://www.igmchicago.org/surveys/modern-monetary-theory/
- 3pt14159 6y agoIf you lower taxes to 0 then there will be no demand for your money because people will start using other currencies as a medium of exchange.
- bhupy 6y agoForget about cutting taxes, MMT holds that we can in theory institute a regressive UBI program that gives cash to people == to their effective income tax (thereby zeroing it out). The only limit, per MMT, is real resource scarcity. Now skip the extra step, and have bondholders just get paid back directly by the money printer.
- ctchocula 6y agoSome of the write-in comments were interesting such as "there are some limits such as financing the entire world's output" and "this will make it impossible to sell more bonds". I would be interested to see a debate between a mainstream and MMT economist, to hear how a MMT supporter would address these critiques.
- bhupy 6y ago"this will make it impossible to sell more bonds" Forget about actually cutting taxes directly, MMT holds that we can in theory institute a regressive UBI program that gives cash to people == to their effective income tax (thereby zeroing it out). The only limit, per MMT, is real resource scarcity. In this implementation, the bonds are still being paid back via taxes, but those taxes are coming from the Fed's printing of money.