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Modern monetary theory: the rise of economists who say government de (cont)
- rossdavidh 6y agoI know this sounds boring and old-fashioned, but whether government debt is a good or a bad thing, would depend a lot on what it was doing with the money it borrowed. If it spent it on repairing aging dams that were about to burst, bridges that needed repairs, and roads that have become unable to bear the traffic they are meant to, they could be a very wise decision. If they are used to build dams where none are needed, bridges to nowhere, and re-pave roads that are already fine, then they are not good. It is not so much the amount of debt that matters (for a sovereign state like the UK that is able to borrow in its own currency), but what the money (and thus the labor and real materials the money is used to purchase) is used to do.
- csense 6y ago> The only limit, according to this view, is if inflation starts to rise, in which case the solution is to increase taxes. But that's the problem. Spend too much, and you'll be paying for it later, with either ruinous inflation or ruinous taxes.
- alpineidyll3 6y agoNo government in power now has shown any desire to allow inflation, and in the absence of inflation central bank spending only benefits the wealthy basically by tautology. Even proponents would admit it must without taxing the wealthy. Proponents of mmt imagine a "new deal 2.0" what they will get is even worse inequality, followed by social upheaval. Virtually all of the balance sheet expansion the us fed has engaged in since qe has only enriched bondholders. Mmt is nothing but an excuse for easy policies. It's like a slim fast shake treatment for heart disease and I can't wait for it to go away.