4 ms·

Not everyone believes in Modern Monetary Theory

littlestymaar 2y ago
Not everyone believes the earth isn't flat either unfortunately. There's no need to adhere to a particular economic theory (I'm not particularly familiar with MMT) to realize that, at societies scale, money isn't some kind of scarce commodity.
- ttoinou 2y ago
  The government spending more money makes money less scarce [0], at any scale (macro, micro etc). That's what we're talking about here. [0] Unless you believe in MMT
  - littlestymaar 2y ago
    You're moving the goalpost. Here's the original quote: > stop spending money the government doesn't have Which has nothing to do with your response.
    - andriesm 2y ago
      I interpret "government should stop spending money they don't have" metaphorically as standing in for "don't spend so much money (especially in economically unproductive ways) that it devalues money and misallocates resources so much that it slows down economic growth". I think simplistic statements "government should not spend money it doesn't have" or "government should stop spending so much money" are all just the normal average person's way of trying to phrase this fundamental economic truth that anyone with a working brain can intuit. It's obvious that governments cannot just spend any arbitrary large amount of money without consequence. It's also obvious to anyone, that just like eating too many calories, it's much easier to overspend than to underspend. So constant calls for governments to go on monetary diets and "make better food choices" are clearly warranted.
      - littlestymaar 2y ago
        > I think simplistic statements "government should not spend money it doesn't have" or "government should stop spending so much money" are all just the normal average person's way of trying to phrase this fundamental economic truth that anyone with a working brain can intuit. There Is Always a Well-Known Solution to Every Human Problem—Neat, Plausible, and Wrong > It's also obvious to anyone, that just like eating too many calories, it's much eadier to overspend than to underspend. You accidentally came up with the best possible illustration for the topic, and it's a really good illustration that actually goes against your argument: - If you eat too much, you'll get fat and unhealthy. - If you eat too little, you'll die from starvation. And you're right, it's exactly the same for government spending: if the government spends too much, it's not good, but if it's spends too little the economy's dead.
        karparov 2y ago
        Wouldn't an economic indicator for the "right level" be nice? Maintained by some economic research institute (without some obvious agenda)? Or does that already exist, I just don't know it? Maybe it's not just one-dimensional though, i.e., it could matter where exactly spending occurs.
        simiones 2y ago
        There's no such thing as an economic institute without an obvious agenda, and generally no way that we know to compute the optimal spending. And even if there was some way to decide how much to spend, there would still be the insurmountable problem of deciding what to spend this money on. It's pretty obvious that some uses of money are more useful than others - if the state spent large amounts of money on buying snow and storing it in the sun, that's not going to have the same kind of effect as spending the exact same amount of money on building new roads. But beyond obviously silly examples, no one can really agree on even the basics of the effects of government spending in other areas. For example, a question like "if the government pays very large pensions and social aids, does that increase the economy as much as spending the same amount of money on subsidizing private business?" is extremely divisive in economic circles - with opposing schools of economics claiming opposite results as the "obvious scientific answer".
    - ttoinou 2y ago
      I was answering to “ That shows quite the misconception about what "money" actually is.”

Not everyone believes the earth isn't flat either unfortunately. There's no need to adhere to a particular economic theory (I'm not particularly familiar with MMT) to realize that, at societies scale, money isn't some kind of scarce commodity.

ttoinou 2y ago
The government spending more money makes money less scarce [0], at any scale (macro, micro etc). That's what we're talking about here. [0] Unless you believe in MMT
- littlestymaar 2y ago
  You're moving the goalpost. Here's the original quote: > stop spending money the government doesn't have Which has nothing to do with your response.
  - andriesm 2y ago
    I interpret "government should stop spending money they don't have" metaphorically as standing in for "don't spend so much money (especially in economically unproductive ways) that it devalues money and misallocates resources so much that it slows down economic growth". I think simplistic statements "government should not spend money it doesn't have" or "government should stop spending so much money" are all just the normal average person's way of trying to phrase this fundamental economic truth that anyone with a working brain can intuit. It's obvious that governments cannot just spend any arbitrary large amount of money without consequence. It's also obvious to anyone, that just like eating too many calories, it's much easier to overspend than to underspend. So constant calls for governments to go on monetary diets and "make better food choices" are clearly warranted.
    - littlestymaar 2y ago
      > I think simplistic statements "government should not spend money it doesn't have" or "government should stop spending so much money" are all just the normal average person's way of trying to phrase this fundamental economic truth that anyone with a working brain can intuit. There Is Always a Well-Known Solution to Every Human Problem—Neat, Plausible, and Wrong > It's also obvious to anyone, that just like eating too many calories, it's much eadier to overspend than to underspend. You accidentally came up with the best possible illustration for the topic, and it's a really good illustration that actually goes against your argument: - If you eat too much, you'll get fat and unhealthy. - If you eat too little, you'll die from starvation. And you're right, it's exactly the same for government spending: if the government spends too much, it's not good, but if it's spends too little the economy's dead.
      - karparov 2y ago
        Wouldn't an economic indicator for the "right level" be nice? Maintained by some economic research institute (without some obvious agenda)? Or does that already exist, I just don't know it? Maybe it's not just one-dimensional though, i.e., it could matter where exactly spending occurs.
        simiones 2y ago
        There's no such thing as an economic institute without an obvious agenda, and generally no way that we know to compute the optimal spending. And even if there was some way to decide how much to spend, there would still be the insurmountable problem of deciding what to spend this money on. It's pretty obvious that some uses of money are more useful than others - if the state spent large amounts of money on buying snow and storing it in the sun, that's not going to have the same kind of effect as spending the exact same amount of money on building new roads. But beyond obviously silly examples, no one can really agree on even the basics of the effects of government spending in other areas. For example, a question like "if the government pays very large pensions and social aids, does that increase the economy as much as spending the same amount of money on subsidizing private business?" is extremely divisive in economic circles - with opposing schools of economics claiming opposite results as the "obvious scientific answer".
  - ttoinou 2y ago
    I was answering to “ That shows quite the misconception about what "money" actually is.”