2 ms·
I've struggled to wrap my head around MMT. I'll definitely read this paper in full. What I've gleaned so far: One big primary difference between camps (pro, c
by specialist 6y ago
I've struggled to wrap my head around MMT. I'll definitely read this paper in full.
What I've gleaned so far:
One big primary difference between camps (pro, con) is emphasis on monetary policy versus fiscal policy.
As a layperson, it seems to me that all involved are still struggling with the metaphors, the narrative. What is the Ray Dalio level explanation?
Worse, fundamentally, I don't think people yet agree the definition of "money". On this, David Graeber's book "Debt: The First 5,000 Years" blew my mind. Methinks this debate (and rhetoric) would become more constructive if the belligerents stopped wrestling with notions of money as a thing -- to be minted, exchanged, and hoarded -- and squinted a bit to think instead about debts.
So I'll now share (again) my very draft metaphor:
Government spending is a loan, which is repaid thru taxes.
After all, banks create money thru issuing debt, and governments are the biggest banks of all.
With this frame, addressing inequity then becomes a matter of who receives those loans and their consequent tax burden.
- dnautics 6y agothere is also an ethical question of who gets to decide how loans are spent. The traditional ethos of the United States, at least, has been of 'no taxation without representation' - you must be able to have a say in how the money taken away from you is spent. It is, of course, impossible for future generations to go back in time and vote for how the borrowed money they are responsible for is spent.
- alexmingoia 6y agoMoney is what debt is often denominated in. Money being a good which is widely accepted for trade isn’t the same as an obligation. I may have dollars but that doesn’t mean anyone is obligated to give me anything for them, and what they decide to trade for them is entirely up to them.