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Maybe not for UBI, but definitely for Modern Monetary Theory. 2 years ago, Stephanie Kelton was doing lectures about how fears of inflation are unfounded. Now

Maybe not for UBI, but definitely for Modern Monetary Theory. 2 years ago, Stephanie Kelton was doing lectures about how fears of inflation are unfounded. Now she is reduced to sharing every conspiracy theory about price fixing. Even if you believed that there was some amount of free money the government was able to find before reaping the penalties of inflation a) it ended up being a lot less than they promised and b) high inflation is much more painful and politically toxic than people remember.

dragonwriter 5y ago
> Maybe not for UBI, but definitely for Modern Monetary Theory MMT: “The only real constraint, and the one from which false fiscal constraints are a distraction, of government net tax and spending policy is monetary impacts like inflation/deflation, so government spending and taxation debate should center monetary conditions and considerations, not fiscal balance“ (For sake of argument leaving off debate over accuracy of this characterization): massive inflation resulting from monetary effects of fiscal stimulus Commentators: “This is why wer should disregard MMT!” Wait, what?
- legitster 5y ago
  Many of the chief proponents of MMT are now spending their time arguing that current inflation is not a result of net tax or spending policy. Kelton has even been advocating for things like price controls and micromanagement of supply chains. My point is that their own model implies that now is the time for a tax-hike or spending controls but none of them want to admit it.
  - candiodari 5y ago
    They're right. Current inflation is not a result net tax of spending policy. Current inflation is the result of sabotaging the supply chain (due to Covid, not saying it wasn't justified) + Russia attacking Ukraine ... That doesn't really change the reaction central banks/MMT/all of finance should have. It doesn't matter what causes inflation to start rising. It only matters that we don't get it feeding back on itself: we must have inflation ... without raises (because demand for goods needs to go down). You're of course right that it'll be politically toxic in the extreme. So they will try everything in their power to avoid doing that.
    - legitster 5y ago
      > current inflation is the result of sabotaging the supply chain This is an often repeated misconception (signal boosted by the White House, no less), but a lot of the purported supply chain disruptions are a result of consumers flat out just consuming more stuff: https://www.businessinsider.com/americans-spending-goods-versus-experiences-supply-chain-crisis-2021-10 https://www.businessinsider.com/americans-spending-goods-ver... A chip shortage can explain the cost of a car going up, and a global war can explain the cost of gas or wheat. But why is the cost of domestic beef going up? Or a cubic yard of soil? The old Monetarist explanation is clearly the right one - there is too much consumer money in the economy. From both stimulus (much of which was initially good), but clearly interest rates have been too low for too long.

dragonwriter 5y ago

> Maybe not for UBI, but definitely for Modern Monetary Theory MMT: “The only real constraint, and the one from which false fiscal constraints are a distraction, of government net tax and spending policy is monetary impacts like inflation/deflation, so government spending and taxation debate should center monetary conditions and considerations, not fiscal balance“ (For sake of argument leaving off debate over accuracy of this characterization): massive inflation resulting from monetary effects of fiscal stimulus Commentators: “This is why wer should disregard MMT!” Wait, what?

legitster 5y ago
Many of the chief proponents of MMT are now spending their time arguing that current inflation is not a result of net tax or spending policy. Kelton has even been advocating for things like price controls and micromanagement of supply chains. My point is that their own model implies that now is the time for a tax-hike or spending controls but none of them want to admit it.
- candiodari 5y ago
  They're right. Current inflation is not a result net tax of spending policy. Current inflation is the result of sabotaging the supply chain (due to Covid, not saying it wasn't justified) + Russia attacking Ukraine ... That doesn't really change the reaction central banks/MMT/all of finance should have. It doesn't matter what causes inflation to start rising. It only matters that we don't get it feeding back on itself: we must have inflation ... without raises (because demand for goods needs to go down). You're of course right that it'll be politically toxic in the extreme. So they will try everything in their power to avoid doing that.
  - legitster 5y ago
    > current inflation is the result of sabotaging the supply chain This is an often repeated misconception (signal boosted by the White House, no less), but a lot of the purported supply chain disruptions are a result of consumers flat out just consuming more stuff: https://www.businessinsider.com/americans-spending-goods-versus-experiences-supply-chain-crisis-2021-10 https://www.businessinsider.com/americans-spending-goods-ver... A chip shortage can explain the cost of a car going up, and a global war can explain the cost of gas or wheat. But why is the cost of domestic beef going up? Or a cubic yard of soil? The old Monetarist explanation is clearly the right one - there is too much consumer money in the economy. From both stimulus (much of which was initially good), but clearly interest rates have been too low for too long.