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I’m not really sure that you understand MMT. MMT isn’t about giving out a free pass to print money, it simply states that deficits are the primary driver of inf

I’m not really sure that you understand MMT. MMT isn’t about giving out a free pass to print money, it simply states that deficits are the primary driver of inflation rather than changes in the money supply. That’s not the same thing as giving out a free pass, in fact, it’s proponents would state that in the face of rising inflation one should reduce budget deficits.

whimsicalism 5y ago
> deficits are the primary driver of inflation rather than changes in the money supply MMT "theorists" will say different things every time you ask them. I doubt many of them would say this though, because it's pretty obviously on-face wrong.
- wbsss4412 5y ago
  It seems clear that you have very little respect for the MMT set. But I haven’t seen anything to suggest they’d disagree with my characterization. I wonder where you draw your understanding of MMT because from my view the theory is fairly straightforward: money creation happens when the government spends, and is taken out when it raises taxes. The purpose of central banks is to provide financial stability.
  - whimsicalism 5y ago
    > from my view the theory is fairly straightforward But as you've stated it, the "theory" is on-face wrong. Money isn't created when the government spends because it borrows from private credit markets when it spends, taking money out of circulation. Money is created by monetary policy, not fiscal policy. I don't necessarily disrespect MMT, I just have trouble tying people down to making a specific claim. Either they are saying something obvious and not at all contrary to mainstream economics, or they are making claims that I think are wrong - but I have trouble pinning down any particular claims.
    - wbsss4412 5y ago
      I think the crux of the disagreement is the order of events. MMT proponents would not character bond issuance as something that takes money out of circulation per se. It is only when that money is taxed back out of the economy that money is removed. In this construction central bank policy and government budgets both do play a role, the question is what comes first. When governments runs deficits, it signals the central bank to print money.

whimsicalism 5y ago

> deficits are the primary driver of inflation rather than changes in the money supply MMT "theorists" will say different things every time you ask them. I doubt many of them would say this though, because it's pretty obviously on-face wrong.

wbsss4412 5y ago
It seems clear that you have very little respect for the MMT set. But I haven’t seen anything to suggest they’d disagree with my characterization. I wonder where you draw your understanding of MMT because from my view the theory is fairly straightforward: money creation happens when the government spends, and is taken out when it raises taxes. The purpose of central banks is to provide financial stability.
- whimsicalism 5y ago
  > from my view the theory is fairly straightforward But as you've stated it, the "theory" is on-face wrong. Money isn't created when the government spends because it borrows from private credit markets when it spends, taking money out of circulation. Money is created by monetary policy, not fiscal policy. I don't necessarily disrespect MMT, I just have trouble tying people down to making a specific claim. Either they are saying something obvious and not at all contrary to mainstream economics, or they are making claims that I think are wrong - but I have trouble pinning down any particular claims.
  - wbsss4412 5y ago
    I think the crux of the disagreement is the order of events. MMT proponents would not character bond issuance as something that takes money out of circulation per se. It is only when that money is taxed back out of the economy that money is removed. In this construction central bank policy and government budgets both do play a role, the question is what comes first. When governments runs deficits, it signals the central bank to print money.