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Modern monetary theory is an interesting look at this that says “print money to pay for the things you need; you only raise taxes to pull money back out of the

by z3ugma 6y ago

Modern monetary theory is an interesting look at this that says “print money to pay for the things you need; you only raise taxes to pull money back out of the economy so that inflation doesn’t skyrocket”

TrispusAttucks 6y ago
Sure, but this punishes good actors to pay for the government's mismanagement. A republic grows weak when you keep whipping the horse pulling the hardest. When the horse dies. The republic dies.
AngrySkillzz 6y ago
MMT is dumb, it's isomorphic to the current situation only it moves the responsibility for "cooling off" an overheating economy from the central bank (interest rates) to the legislature (taxes). And there is no way the legislature will have the wherewithal to actually raise taxes when it needs to to regulate that system.
lumost 6y ago
This presumes that the government can tax and print money equally amongst market participants, and that the economy doesn't re-arrange itself to capture the money printer. As a counter point one could imagine a hypothetical implementation of MMT where money was printed in a particular room at particular times of day, and those in the room were able to capture the money. This would of course help the government offload distribution of printed currency and avoid direct corruption. Given the room can only hold so many people those in the room will have had to wheel, deal, and bribe to get make their way in. As its impossible to have a taxation room as everyone would simply avoid the money pit, the government would of course need to still tax all market participants according to some taxation scheme, presumably the government would tax investments less than income to keep the money velocity from falling. We'd be left with a hypothetical economy where ~100 individuals/corporations get dollars printed at them and a taxation system which taxes what those individuals happen to spend in the rest of the economy. Creating a natural monopoly for those with a spot in the room.

by z3ugma 6y ago

TrispusAttucks 6y ago

Sure, but this punishes good actors to pay for the government's mismanagement. A republic grows weak when you keep whipping the horse pulling the hardest. When the horse dies. The republic dies.

AngrySkillzz 6y ago

MMT is dumb, it's isomorphic to the current situation only it moves the responsibility for "cooling off" an overheating economy from the central bank (interest rates) to the legislature (taxes). And there is no way the legislature will have the wherewithal to actually raise taxes when it needs to to regulate that system.

lumost 6y ago

This presumes that the government can tax and print money equally amongst market participants, and that the economy doesn't re-arrange itself to capture the money printer. As a counter point one could imagine a hypothetical implementation of MMT where money was printed in a particular room at particular times of day, and those in the room were able to capture the money. This would of course help the government offload distribution of printed currency and avoid direct corruption. Given the room can only hold so many people those in the room will have had to wheel, deal, and bribe to get make their way in. As its impossible to have a taxation room as everyone would simply avoid the money pit, the government would of course need to still tax all market participants according to some taxation scheme, presumably the government would tax investments less than income to keep the money velocity from falling. We'd be left with a hypothetical economy where ~100 individuals/corporations get dollars printed at them and a taxation system which taxes what those individuals happen to spend in the rest of the economy. Creating a natural monopoly for those with a spot in the room.