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That's the fallacy the article is trying to combat. The war in Afghanistan did not take away from our capacity to build infrastructure at home. It's not like al
by wonnage 5y ago
That's the fallacy the article is trying to combat. The war in Afghanistan did not take away from our capacity to build infrastructure at home. It's not like all the construction capacity in America was busy building stuff for Afghanistan.
> The real limit on government spending was not some artificial debt ceiling, or the risk of “running out of money”, but the productive capacity of the economy and the risk of sparking either inflation, or a ruinous multiplication of bottlenecks and dysfunctional backlogs of unmet orders. As Keynes said, we can afford anything we can actually do.
But the discourse about the war (as in your comment) focuses entirely on all the things we could've done with that money, as though building bridges vs bombing people was a binary decision.
It's not. We didn't spend $5T on war and leave our infrastructure crumbling because the war crowded out our capacity to build; we simply have decided, through our politics, not to bother with the latter.
The irony is that MMT has been perceived as a progressive theory to encourage spending on social programs. But progressives are arguing against war using the same austerity economics that conservatives use to justify not spending on said programs. Meanwhile, nothing about MMT is actually left or right; in practice the military-industrial complex in our government is evidence that MMT works.
- strbean 5y agoI'm pretty sure everyone complaining about the price of the war would be perfectly comfortable substituting the phrase "wasted money" with the phrase "wasted productive capacity and physical resources". I don't really see how this counter-argument is anything but quibbling over phrasing.
- wonnage 5y agoIt's not. It's pointing out that the money argument for why we can't have nice things is a fallacy. We have the money, we just don't want to spend it for a variety of political reasons.
- nostromo 5y agoEven a die-hard Keynesian would agree that while the monetary supply is not fixed, the amount of productivity in our economy is at any given moment. And when we decide to spend $5T of printed money on something boneheadedly stupid, while those dollars are not technically lost, we did lose our capacity to spend two decades, $5T worth of labor and supplies on something else -- something that would have made us all richer people today. And as any economist will tell you -- you can print money right up until you can't. And when you realize you can't print anymore money -- it's already too late to course correct without inflicting tremendous misery on real people.
- wonnage 5y agoLet me rephrase. Who cares that we didn't build infrastructure in wartime when we don't even have the political will to build it in peacetime?
- anm89 5y agoThere is not an unlimited amount of skilled construction labor or construction equipment, especially over the short term. When you ship massive quantities of both off to a desert far from your country you get less construction. So yes,it very literally reduces our capacity to construct infrastructure at home. Before you you get to the non imaginary budgetary issues. The "fallacy" this article is trying to combat is econ 101