4 ms·

I know you're goofing on it, and tbh I give more credence to MMT than most folks do, but most folks I know who think about MMT still acknowledge that if people

I know you're goofing on it, and tbh I give more credence to MMT than most folks do, but most folks I know who think about MMT still acknowledge that if people believe they're being taxed to pay for things, they still kinda are. MMT is a guiding principle for policy, not something to tell individuals how their relationship with the state actually works (because most folks don't care).

hgomersall 3y ago
You make a good point, which is that even through an MMT lens, tax and spend should be the norm, since the resource provisioning and supply should balance to avoid inflationary pressure. However, I suggest they probably should care given how much policy is guided by an incorrect understanding of the monetary system. The whole concern about deficits and sovereign "debt" is the obvious one. In addition, a good understanding of why taxation is necessary helps to understand which taxes might be useful and which are not. Finally (for now!), policy options open up when you understand this stuff properly that make no sense at all through the state-as-a-household view. Politicians need to be held to account and an ignorant population is not able to do that.
marcus0x62 3y ago
I was goofing on it to a certain extent, but the central problem with MMT -- as I see it -- is that the "deficit spending doesn't cause inflation" part of it will work, until it doesn't. MMT has developed (in popularity, at least,) during a highly unusual period of economic stability and peace in the developed parts of the world. Extrapolating that experience into perpetuity is beyond foolish. Put another way, go ask some African nation that got "bailed out" by the IMF if their "deficits didn't matter."
- neilwilson 3y ago
  I'm the government. I buy your labour for $100 after tax, and you leave that in your bank account - which you have to do or you would get taxed on further spending/income which would reduce the deficit on that spending below $100. Where's the mechanism for inflation? It's government spending that doesn't cause a deficit that is potentially inflationary, not the deficit spending part.

hgomersall 3y ago

You make a good point, which is that even through an MMT lens, tax and spend should be the norm, since the resource provisioning and supply should balance to avoid inflationary pressure. However, I suggest they probably should care given how much policy is guided by an incorrect understanding of the monetary system. The whole concern about deficits and sovereign "debt" is the obvious one. In addition, a good understanding of why taxation is necessary helps to understand which taxes might be useful and which are not. Finally (for now!), policy options open up when you understand this stuff properly that make no sense at all through the state-as-a-household view. Politicians need to be held to account and an ignorant population is not able to do that.

marcus0x62 3y ago

I was goofing on it to a certain extent, but the central problem with MMT -- as I see it -- is that the "deficit spending doesn't cause inflation" part of it will work, until it doesn't. MMT has developed (in popularity, at least,) during a highly unusual period of economic stability and peace in the developed parts of the world. Extrapolating that experience into perpetuity is beyond foolish. Put another way, go ask some African nation that got "bailed out" by the IMF if their "deficits didn't matter."

neilwilson 3y ago
I'm the government. I buy your labour for $100 after tax, and you leave that in your bank account - which you have to do or you would get taxed on further spending/income which would reduce the deficit on that spending below $100. Where's the mechanism for inflation? It's government spending that doesn't cause a deficit that is potentially inflationary, not the deficit spending part.