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That's where the wasteful bit comes in. If the taxed dollars ended up with say hurricane victims or other struggling Americans, those dollars would chase goods
by willcipriano 2y ago
That's where the wasteful bit comes in.
If the taxed dollars ended up with say hurricane victims or other struggling Americans, those dollars would chase goods and services domestically driving up the price of those goods.
Now consider if instead you helped fund Israels socialized medicine program or paid off some of Ukraines debt or paid interest to Chinese creditors. Those dollars wouldn't have much effect when it comes to increasing the price of eggs in the US as they are being spent far away in another economy.
A similar effect could occur if the money ended with the wealthy folks, say wealthy owners of private defence contracting firms, as those dollars might chase building a super yacht (inadvertently employing some people but also consuming foreign made materials and labor) instead of trying to rent an apartment in Iowa. Less dollars chasing Iowa apartments, considering supply and demand, lower prices, lower CPI.
Take dollars from the middle class who will drive up the cost of the American dream and instead give them to people who will drive up the price of luxury goods.
It's never explained this clearly beacuse people would riot, but with this framework the choices of government in the last few decades or so suddenly makes more sense.
(I don't endorse MMT)
- hgomersall 2y agoI'm yet to meet anyone that actually understands MMT and doesn't endorse it. You might be the first, but I doubt it. Which bit of MMT do you have trouble with?
- willcipriano 2y agoThe political will only exists to do money printing part in practice. The rest is a pipe dream.
- hgomersall 2y agoSo no, you don't understand it?
- willcipriano 2y agoSo, its implemented then?
- hgomersall 2y ago"implemented"? What does that mean? MMT accurately describes the monetary operations and fiscal constraints of a sovereign government (i.e. with their own currency) and from which you can predict outcomes with a high degree of reliability. Insomuch as "implemented" means using the policy prescriptions (specifically, the job guarantee), there are no countries doing that, but various real world experiments have touched on it. Japan had done things differently (albeit from a different perspective of mainstream economics) and is a good test case for the MMT model, especially given how many bet against the yen (and lose), implying the mainstream models are struggling there.
- willcipriano 2y agoI said the political will does not exist (in several different ways) now you say: > Insomuch as "implemented" means using the policy prescriptions (specifically, the job guarantee), there are no countries doing that, but various real world experiments have touched on it. Something that you can't implement, doesn't work. In practice MMT is a smokescreen for politicians to print money for their friends.
- hgomersall 2y agoThe point is, you don't "implement" MMT. It's a useful framework for analysis regardless of what policies you choose. If we could get to the point of discussing monetary and fiscal operations from a sound basis, then we can start debating policies, but we're so far from that at the moment.
- willcipriano 2y agoI'd argue a less correct framework that you could actually sell to voters and politicians would be more successful by the virtue of its policy actually being implemented (not just the fun bits). I can find you far more people who wish to abolish the fed and return to the gold standard than people who are willing to have the levels of taxation required to limit the inflation caused by funding the government with unsound money. MMT's advocates policies would work if it wasn't for that pesky democracy and realities around campaign finance.