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I'll try to respond to specific discussions in a few hours. I think it might be productive, though, to step back and develop a shared understanding of what MMT is and whether it describes a system that currently exists before getting into debates about the specific implementation details.
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Jan 30, 2019 21:54
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plogo posted:Going down that road seems like a fools errand. Determining the inflationary impact of any given program after the fact is extremely difficult, forecasting the impact of individual programs is gonna be an educated guess at best. Yeah it’s my understanding that macroeconomics can only make very approximate estimates of the effect of big fiscal policy. That’s not a weakness of MMT, every economic paradigm will have the same problem. That doesn’t mean you can’t make predictions you just have to prepared to adjust policy on the fly depending on outcomes.
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Jan 30, 2019 22:06
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Squalid posted:Yeah it’s my understanding that macroeconomics can only make very approximate estimates of the effect of big fiscal policy. That’s not a weakness of MMT, every economic paradigm will have the same problem. That doesn’t mean you can’t make predictions you just have to prepared to adjust policy on the fly depending on outcomes. Haha yes, to quote an old review essay paper (from a skeptic of fiscal policy, no less): "I will conclude that the U.S. aggregate multiplier for a temporary, deficit financed increase in government purchases (that enter separately in the utility function and have no direct effect on private sector production functions) is probably between 0.8 and 1.5. Reasonable people can argue, however, that the data do not reject 0.5 or 2. "
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Jan 30, 2019 22:12
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Fiscal multipliers and inflationary effects of government spending aren't really what MMT is about, though? For those things stick with neo-Keynesian models or whatever else you like. The question MMT asks is must we create debt, then create fiat currency to 'buy' the debt, or can we just create the fiat currency and directly use it.
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Jan 30, 2019 22:33
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Fiscal multiplers are often brought up by MMTers, they absolutely belong in the discussion. What is unique about this to MMT? "The question MMT asks is must we create debt, then create fiat currency to 'buy' the debt, or can we just create the fiat currency and directly use it."
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Jan 30, 2019 22:42
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Traditional view is the government works like this, with government programs as an output function and taxes as an input function: Government💰(Some finite amount of money lowers) -💵Government spending💵-> Economy As the government spends, it loses money to the economy. There is some finity to the government's bag of money. Government💰(Some finite amount of money increases) <-💵Taxes/Loans💵- Economy The government needs to replenish its stock of wealth through taxes and loans. When the government is spending more than it takes in through taxes, it loses money, and if that money reaches 0, it's game over. When the government takes in more taxes than it spends, that's a surplus which will enable us to spend more in the future. This is not how it works at all, though, and the point of MMT is it's actually harmful to view things this way. MMT is about flipping that whole perspective. Rather than viewing government spending as an output and taxes as an input, government spending is an INPUT of the economy and taxes are an OUTPUT of the economy. The government has no real money and the money is IN the economy. But of course you have to understand inflation, here. The economy has an amount of USD floating around. This is a literal number that is countable, right around $20,000,000,000,000. There is also some value of the economy's actual worth. In other words, how much production is there? This is impossible to truly quantify since it involves more data points than we could ever acquire and involves subjective value judgments. For simplicity I'm going to assume that right now the value of our dollar is perfect and the actual value of our economy is 20 trillion dollars. We're going to judge all inflation based on how it affects this perfect balance of 20 trillion dollars in cash versus 20 trillion in economic value. Inflation is modeled thusly: Money in circulation ($20 Trillion) / Value of Economy ($20 Trillion) = 1 + Relative inflation (Currently 0). When the government spends money and there is no economic growth: Money in circulation ($20 Trillion + $N Government Spending) / Value of Economy ($20 Trillion) = 1 + Relative inflation (>0), and so the overall value of each dollar lessens and the price of goods goes up. On the other hand, when the government TAXES without economic growth: Money in circulation ($20 Trillion - $N Taxes) / Value of Economy ($20 Trillion) = 1 - Relative deflation (>0), and the value of each dollar increases and we have deflation. This is what a government surplus entails; inherent deflation. Now, ideally, our economy is actually growing. So, let's look at the conservative wetdream of economic growth and a perfectly balanced budget: Money in circulation ($20 Trillion + $N Government Spending - $N Taxes) / Value of Economy ($20 Trillion + $M Growth) = 1 - Relative deflation (>0). This also leads to deflation. Now there are two edge cases here that are very important to understand: Where relative deflation is at a maximum and where relative inflation is at a maximum. In the former case, you have economic growth, or your rate of production is good however you do not have enough currency in circulation to support this growth. Meaning people are working, items are being produced, but no one has enough cash to make use of this economic growth. The preposterous extreme is the economy is left with one dollar, you need that dollar to purchase bread, however that single dollar is currently in the hands of a shoemaker. You have to wait for everyone in line to finally purchase your good so you can purchase the goods you need with the single dollar in the economy. You can see how this is in no way a functional economy. At the other end of the spectrum... well, there's no "max" value of inflation. We can keep on pumping money in and all that changes is your dollar hamburger now costs 100 dollars. or 1000 dollars. The only limit is practicality: hamburgers costing 1000 dollars is not ideal. However, as long as you HAVE the thousand dollars to buy that hamburger there isn't really a problem. What is a problem is hyperinflation. This is when the cost of goods dramatically exceeds what consumers are capable of paying for them, grinding your economy to a halt. Now, no matter how ludicrous your relative inflation is, there is no inherent hyperinflation. It doesn't matter that a hamburger costs a thousand dollars SO LONG AS the guy getting payed ten bucks an hour now makes 10,000 an hour. This is why your granddad was fine making a nickle an hour - he could buy 5 burgers with it. At a nickle an hour, you'd need to work 20 hours to purchase one hamburger. So steady inflation is fine. Rapid inflation without increase in wages to match is not fine. But now let's put in some actual numbers. Our economy is about $20 trillion and our deficit spending is about $1 trillion. Ergo, if we assume there's no economic growth: $21/$20 = 1.05. In other words, that dollar hamburger will cost you an extra 5 cents next year. That's the effect of $1 Trillion with a T in deficit spending with no economic growth. In actuality, our economy is doing pretty well and growing. The actual inflation rate is estimated around 1.02. So, hey, let's talk about the stupid, dumb, very dumb wall. I like round numbers, so let's call it $6 Billion to fund. Money in circulation ($20 Trillion) + ($1 Trillion extant deficit) + ($0.006 Trillion for the wall) / Value of Economy ($20 Trillion) Except the economy isn't so simple. I'm going to assume that the resources we'll build the wall with are inexhaustible (they aren't). The biggest part of a project like this is labor. I'm going to be VERY generous to Trump and say about $3 Billion is going to labor. So, where's this labor come from? Why, the private sector of course! Let's be clear, America doesn't have $3 billion worth of workers twiddling their thumbs. We have an unemployment rate of 4%, so the vast majority of these builders are going to be at worst leaving more productive government jobs like road work or hospital construction and at best leaving private work that would grow the economy directly. Any dollar that's spent on labor that WOULD have been used for work in the private sector is a direct loss for the economy's value. I'm going to assume everyone who isn't unemployed was in the private sector since the loss in efficiency from failing to maintain roads etc. is entirely speculative and would get complex numbers that are well beyond the scope of my point. I'm also going to generously assume a whole 4% of the workers were previously unemployed meaning we're only diverting .96 * $3 Billion ($2.88 Billion) out of the economy. So, in this model, the cost of Trump's big, stupid, dumb, very dumb wall is: 21.006/19.99712 = 1.05045. Or, that hamburger that cost a dollar now costs a dollar and five cents (actually, 2 cents), but at this rate in 20 years it's going to cost one extra penny. If we increased taxes by $6 billion to pay for it, this would be negligibly less. Is the big, dumb, stupid, very dumb wall big, dumb, stupid and very dumb? Yes, yes it is. Is it going to be the financial ruination of this country? No, probably not. Actually, the bigger cost is assuming it succeeds in its goal, we currently have 8 million illegal workers, earning about 36k a year. In economics terms, we would be losing about 288 billion dollars worth of annual labor. Again, unemployment is not a problem in this country: we have jobs for workers. Regardless of if these workers are paying taxes they are directly contributing to the economy. So ASSUMING the wall is a perfect success and we manage to get all the illegal immigrants out of the country, the cost would be: 21.006/19.80912 = 1.06042. That's assuming we manage to recover from the labor void in a year (but I'm also assuming the big, stupid, dumb, very dumb wall isn't a big, dumb, stupid, very dumb failure.) Now, let's say we spend 6 Billion on something that isn't stupid. Like scholarships! Low estimates peg the return growth on scholarships around 13%. So. 6 Billion in scholarships will actually grow the economy by 6.78 billion (Again, simplifications. Not everybody you give a scholarship to is going to graduate, but this is an average. In reality, it also takes at least 4 years to see the effect of this, but let's pretend we did this 4 years ago.) So, now we still have 21.006 on top but on bottom we're actually increasing to 20.00678. That comes out to 1.0499. Woo! We saved a whole hundredth of a cent on next year's hamburger! (Again, actual inflation rates suggest a better number to use would be 20.406 which would give us 1.0199 in inflation. Still a fraction of a penny.) Okay, so my point- the idea of "paying" with taxes is abstract and dumb to begin with. A 6 billion dollar program, whether it helps or hurts our economy, has such a tiny effect on actual inflation rates. The reason we shouldn't build a big, dumb, stupid, very dumb wall isn't because we can't afford it - it's because there's absolutely no reason to build it and its building will contribute to our rampant xenophobia. The reason we should invest in education isn't because it will "pay for itself" and "it's basically free." It's because an educated populace is desirable. No, we shouldn't consider any government spending as "free," what we SHOULD do is conceptually divorce taxation from spending. I'm not arguing in favor of health care reform because it's economically beneficial. I'm arguing in favor of healthcare reform because people are dying.
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Jan 30, 2019 22:55
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plogo posted:
Here is, for example, a pretty well known paper discussing the same tradeoff from another perspective. https://www.minneapolisfed.org/research/qr/qr531.pdf I would also point you towards the fiscal theory of the price level stuff from eric leeper and friends.
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Jan 30, 2019 23:16
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http://jwmason.org/slackwire/tag/lost-in-fiscal-space/ I think this sorta captures my feelings. I don't know if JW Mason and Arjun Jayadev speak for all MMTers, but I can't help but think theory wise there is nothing new. "An increasingly visible school of heterodox macroeconomics, Modern Monetary Theory (MMT), makes the case for functional finance—the view that governments should set their fiscal position at whatever level is consistent with price stability and full employment, regardless of current debt or deficits. Functional finance is widely understood, by both supporters and opponents, as a departure from orthodox macroeconomics. We argue that this perception is mistaken: While MMT’s policy proposals are unorthodox, the analysis underlying them is largely orthodox. A central bank able to control domestic interest rates is a sufficient condition to allow a government to freely pursue countercyclical fiscal policy with no danger of a runaway increase in the debt ratio. The difference between MMT and orthodox policy can be thought of as a different assignment of the two instruments of fiscal position and interest rate to the two targets of price stability and debt stability. As such, the debate between them hinges not on any fundamental difference of analysis, but rather on different practical judgements—in particular what kinds of errors are most likely from policymakers."
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Jan 30, 2019 23:51
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I found this example helpful and interesting. Macroecon is weird! One soundbite I heard not long ago on the radio, in reply to the question "what's wrong with running up the national debt?" was "Well you have to pay it back." Can someone help me understand what is really meant by paying back the national debt?
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Jan 31, 2019 01:13
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Squalid posted:I found this example helpful and interesting. Macroecon is weird! The national debt is really bonds. You can walk into a bank, say you want to buy a treasury bond and they will sell you one. then after ten years you hand the bond back and they give you 2.8% more money. The truth that MMT is based on is the fact than in ten years it's not really possible the government couldn't pay back the bond. If they didn't have the money a loan shark doesn't come and break their knees, they just have to go "aw geez, print more money guys!" and everyone' money is worth less instead. (and in 2019 it's not even like they really physically print money, they just set parameters to encourage types of loans that generate new money). That part is true. The thing people try to turn that into is some sort of "that means everything is free!" and try to like, use it as some weird excuse for why they want socialist style programs but don't want to have rich people pay taxes, or have themselves pay taxes. Or something. Like it's one weird trick to have right wing libertarian socialism with low taxes AND generous social programs. (although sometimes you see people suggesting it where you just tax rich people to like, punish them or something? where it's not even necessary but you just do it for fun?)
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Jan 31, 2019 01:28
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I want rich people to be taxed into oblivion because the concept of rich people is morally repugnant and bad for society. But MMT still suggests that you have a large amount of potential investment with little to no risk involved, ergo it obliges you to use it. If you were running any other large concern in that situation you would absolutely be spending like hell to grow the operation.
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Jan 31, 2019 01:36
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Owlofcreamcheese posted:The national debt is really bonds. You can walk into a bank, say you want to buy a treasury bond and they will sell you one. then after ten years you hand the bond back and they give you 2.8% more money. Yeah, this is basically how I already understand things. I guess I'm just trying to use this thread to feel out how economists generally and MMT people specifically think about the effects of national debt for the US economy. I also want to try and work through the consequences of various methods for managing debt. We can use inflation to devalue existing bonds. However who is it that ends up losing out on the value of that interest? If it is mostly rich capitalists, then inflation could be a progressive way to control debt levels. If the effect is concentrated on pensioners or elderly people living off savings, then the effect is going to be more negative. Obviously the impacts will be mixed, I just wonder where it is concentrated. Also, is there any scenario where MMT people would want the government to run a surplus?
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Jan 31, 2019 01:42
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My understanding is that full employment is the target for MMT, so if the fiscal policy required to hit that target results in a surplus, then great! There is no reason that deficits will necessarily result. If the goverment just prints money to pay for the fiscal policy, then there will be no deficit at all, for example.
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Jan 31, 2019 02:09
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Squalid posted:Yeah, this is basically how I already understand things. I guess I'm just trying to use this thread to feel out how economists generally and MMT people specifically think about the effects of national debt for the US economy. Modern monetary theory is like, trivially correct. It's obvious that the US government could not run out of US dollars. They would simply print more and make money worth less. That part is clearly true, but treating it as the one weird trick where we don't need to have taxes but can pay for everything is the dumb part. It's not that. It just means that it's not perfectly one to one and you can run deficits and have it be fine. Which is literally how it already is.
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Jan 31, 2019 02:17
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Dead Reckoning posted:I'm starting to think that you don't understand the sources you are citing. That paper from the St Louis Fed says that government spending does not drive inflation. But, and this is the important part, it describes spending by governments operating under conventional monetary theory. Congress can spend as much as it wants right now, but it has to appropriate revenue or issue debt in order to do it. MMT seeks to do away with that limitation. 1. The original request was regarding empirical evidence of "an empirically established method for predicting the effects of inflation," or, in your words: quote:He's asking if there is a method for accurately, empirically predicting the inflationary effects of specific policy choices in advance. For example, if I come to you and say, "the government should print and then spend a billion dollars to do X", can you run some numbers and say to me, "that will cause the inflation rate to rise/fall by zero point Y%"? I therefore offered the evidence I identified. Overall, the evidence suggests government spending hasn't been linked to inflation. That does not mean government spending can never create inflation, though, which is one of the things you keep trying to claim. The evidence also suggests military spending is a policy area that tends to increase inflation, but other types of government spending may not. Again, this is based on things that have actually happened, and it's possible no country has yet met a condition where general government spending does drive inflation. Full article for the multi-country study here, if anyone else is interested. The various articles I linked have models for predicting inflation, I believe. I'm therefore inclined to say, yes, we've got empirically established methods for predicting inflation. E: I went back and looked again at the original request on page 1. The poster seemed interested in ensuring no inflation occurs. That's also not a realistic benchmark, since the US has an inflation target and too low inflation puts the country at economic risk. If you want empirical evidence of an MMT-loving regime having employed functional policies, that's a different request from the one I responded to. This is one reason I feel you're not engaging in good faith. That evidence may be unavailable if no such regimes exist(ed). However, making evidence involving <thing that hasn't been tried before> a prerequisite to trying <thing that hasn't been tried before> isn't a reasonable request. 2. MMT isn't doing away with the limitation you describe. There's no limitation to do away with. If we agree the U.S. has the authority to create money, then it logically follows they don't need to borrow or tax it from anyone if they don't want to. In fact, they had to create and distribute money in the first place for there to be anything to tax or borrow against. The US chooses to issue debt and extract taxes. These options are and will remain policy tools. Even if you want to insist the government has to do the song and dance of "borrowing" from somewhere, they can just borrow from themselves, as the United States currently does: "Forbes Article posted:Money can be and is created with a keystroke, ... MMT only tells us to disregard the song and dance surrounding the fact that the government simply brings money into existence. It doesn't require us to materially change how we do business. quote:Our government has operated under conventional monetary theory for the period they studied, so the government spending being studied was counterbalanced by the government taking similar amounts of money out of the economy through revenues or issuing debt. MMT says that the government can do away with the latter and simply print money to pay its bills. Since none of the governments being studied were operating under MMT, it doesn't support your assertion that spending by a government operating in the way that MMT enthusiasts want would not cause inflation. Again, the original request was not for a empirical evidence involving an MMT-loving regime. Further, at no point have I suggested government spending at the levels advocated by some MMT enthusiasts wouldn't create inflation. You keep trying to put those words in my mouth, and it's another reason I think you're arguing in bad faith. Another edit: you did catch the part where I said any spending carries inflationary risk, right? Dead Reckoning posted:I'm participating in a few parallel discussions. With LuciferMorningstar, I'm trying to figure out if they understand that, under MMT, the ability of a government to print money to pay for spending is constrained by how much that spending contributes to rising inflation. (The government can also raise taxes to put downward pressure on inflation.) Inflation is not a constraint. It's a response. There may be a point at which it would be more advisable to not spend money in favor of limiting inflation, but that doesn't mean policymakers would *have to.* LuciferMorningstar fucked around with this message at 02:34 on Jan 31, 2019 |
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Jan 31, 2019 02:21
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LuciferMorningstar posted:Inflation is not a constraint. It's a response. There may be a point at which it would be more advisable to not spend money in favor of limiting inflation, but that doesn't mean policymakers would *have to.* Save and not spend? Fine private sector, were always hiring, are brutally efficient and don't need to profit to survive. Currently, the private sector can just starve you out and makes you bargain against the reserve army of the unemployed. MMT is one of the only economic theories that makes full employment possible. Unlike a UBI, it lets labor keep its say, gives dignity to the other-abled, and doesn't depend on funding levels keeping pace with purchasing power and cost of living.
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Jan 31, 2019 03:35
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Babylon Astronaut posted:MMT theorists support a job guarantee to fix much of the system's ills, and the Marxists think it's the most humane way to let capitalism eat itself. I would imagine that Marxists would disagree pretty strongly with the MMT understanding of value and capital, no?
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Jan 31, 2019 04:34
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LTV is more of a moral system of value that emphasizes the costs which are generally externalized from the system of monetary value, as well as being a tool for radicalizing people by presenting the role of the employer in the equation. I don't think it really has a lot of bearing on how fiat currency works on a macroeconomic level other than to inform your political leanings. Like as a marxist I obviously don't think money is reflective of the true value of a thing but it doesn't change whether or not the rest of the world does, and as long as the rest of the world does, systems describing the way it actually affects the world are still correct.
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Jan 31, 2019 04:41
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It was literally invented and advanced by modern money theorists.
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Jan 31, 2019 14:42
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Delthalaz posted:I would imagine that Marxists would disagree pretty strongly with the MMT understanding of value and capital, no? I'm confused by this question? Like, there's not really an ethical "for" or "against" on MMT. It's a model for a sovereign nation's role in its economy. From a Marxist perspective I'd say the ability of a nation to utilize MMT style spending implies virtually unlimited control over the workforce by the ruling class. As well even seizing the means of production wouldn't inherently grind the economy to a halt as the government could continue to issue currency, making a worker's revolt much harder. Do I personally like the idea of plutocrats with this power? No. However my feelings on the matter do not affect the validity of MMT, and nothing will change the U.S.'s economic control short of total economic collapse. As long as this is the case, I'd rather we use that power for benevolent causes instead of funding genocide.
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Feb 1, 2019 09:20
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Dead Reckoning posted:If this is effectively a free lunch, why has no one done it before? It's not a free lunch, but the real answer is because the politicians in charge don't even understand how an ATM works let alone 1900s economics let alone 2019 economics. Owlofcreamcheese posted:The point is that the whole thing seems to be an effort to obfuscate things by declaring everything free then demanding everyone pay taxes to pay for it but with a weird fanciful claim that you are "Deleting" the money that spending totally different money instead. With the answer to any "well how much taxes would need to be deleted to pay for X program" being some sort of weird "heh, of course I can't tell you that, you just gotta trust me" I think you're just misinterpreting to be honest. No one is saying "everything is free." They are saying the gov't doesn't need to worry about going into default because it can print dollars and as long as the economy remains solvent dollars will retain value. quote:With the answer to any "well how much taxes would need to be deleted to pay for X program" being some sort of weird "heh, of course I can't tell you that, you just gotta trust me" How do you think this works now exactly? The Fed does the best it can to manage inflation but it's not like there is some dial they can just turn to have the desired effect. Gnumonic posted:MMT seems to mandate that we place some blind faith in...someone... who has an oracular power to predict the inflationary effects of a given policy. ... what? This is how it works now!!! COMRADES fucked around with this message at 18:22 on Feb 1, 2019 |
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Feb 1, 2019 18:18
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So in a scenario where government spending is not constrained by government revenue, what keeps the government from over-spending or under taxing?MixMastaTJ posted:
Dead Reckoning fucked around with this message at 18:25 on Feb 1, 2019 |
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Feb 1, 2019 18:21
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Dead Reckoning posted:So in a scenario where government spending is not constrained by government revenue, what keeps the government from over-spending or under taxing? You see a rise in inflation beyond what you want and adjust accordingly. Just like now. You think revenue actually keeps Congress from over-spending? It doesn't. That's why our debt keeps ballooning. It's just some political sideshow the parties can argue about before raising the ceiling again.
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Feb 1, 2019 18:23
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Delthalaz posted:I would imagine that Marxists would disagree pretty strongly with the MMT understanding of value and capital, no? They don't really have anything to do with each other. MMT is about currency and managing its flows. Marxism is about who controls the output of society's labor. All LVT really says is "why does the allocation of the surplus [the profit] get entirely determined by some autocraft assholes who didn't actually work to create it?"
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Feb 1, 2019 18:25
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COMRADES posted:You see a rise in inflation beyond what you want and adjust accordingly. Just like now. Under a MMT government, if Congress decides to print a quintillion dollars to pay for M4A and free college and a border wall and laser fighter jets and also simultaneously slashed tax rates in half, would the Fed be able to control the resulting inflation? What functionally stops Congress from doing this, if the government was run the way MMT enthusiasts suggest?
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Feb 1, 2019 18:27
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Dead Reckoning posted:That's my point: Congress currently has to issue debt to cover the expenses it incurs in excess of revenue. There are even laws that limit their ability to issue too much debt. Those laws get constantly changed as needed. Congress has to issue debt by issuing bonds... which the Fed turns around and purchases off the market with money they created out of thin air as they see fit. MMT just points out there is an unnecessary step here. Dead Reckoning posted:Under a MMT government, if Congress decides to print a quintillion dollars to pay for M4A and free college and a border wall and laser fighter jets and also simultaneously slashed tax rates in half, would the Fed be able to control the resulting inflation? What functionally stops Congress from doing this now? Pass a law that says they can't do that without reasonable economic analysis and approval. Problem solved. Presumably the leaders of the country also don't want to destroy the economy by injecting poo poo tons of money supply in for no good reason. I said it before itt but as an aside, M4A would likely result in less gov't spending than what we do now (evidenced by every single other country with socialized healthcare that gets better results for less money).
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Feb 1, 2019 18:29
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There also seems to be some fundamental miscommunication here I think. This isn't an argument to "switch over" to an MMT government. We are already in an MMT economy. Fractional reserve banking. The Fed doing quantitative easing. Like it or not, money is generated out of nowhere as needed all the time. If you print your own money that is only backed by "full faith and credit," MMT applies. MMT just describes what is happening. Like the Theory of Gravity describes what is happening as the planets orbit the sun. The politicians talking about default are just making a political issue out of it, or don't understand the country's economics. Or both. Dead Reckoning posted:What functionally stops Congress from doing this, if the government was run the way MMT enthusiasts suggest? btw it is just Keynesian economics, not some new thing. MMT just provides ammo for the Keynesians against the supply-sider Friedman lovers that have taken over in the last few decades. COMRADES fucked around with this message at 18:37 on Feb 1, 2019 |
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Feb 1, 2019 18:33
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COMRADES posted:What functionally stops Congress from doing this now? COMRADES posted:Pass a law that says they can't do that without reasonable economic analysis and approval. Problem solved.
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Feb 1, 2019 18:36
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Dead Reckoning posted:Their ability to find buyers for US debt willing to give them reasonable rates, something they are already managing to gently caress up. So you're choosing to ignore that the US can and does buy its own debt?
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Feb 1, 2019 18:37
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Dead Reckoning posted:Their ability to find buyers for US debt willing to give them reasonable rates, something they are already managing to gently caress up. The Fed buys bonds and securities all the time, so not really. Dead Reckoning posted:Lmao yes why would Congress engage in profligate spending and tax cutting that they could put their names on if we make the price an abstract problem a future congress will have to deal with. I mean basically if we have a government full of morons who want to destroy us then we're hosed no matter what. If we had a proper public education system and took all the corporate money out of politics we might get some representatives that actually do care about the country's future. Weird concept, I know. Dead Reckoning posted:Lmao yes why would Congress engage in profligate spending and tax cutting that they could put their names on if we make the price an abstract problem a future congress will have to deal with. Anyway they do this now already so  There's no change that has to be made to 'switch' to MMT this is already how it works. OwlFancier posted:Maybe you just have to accept that you can't actually make informed choices? No one can predict the future but you can actually use math to predict effects. Fiscal multipliers are a thing, etc. This isn't just some poop pulled out of a goon's rear end, this is something that economists are studying intently. quote:Because the government can issue its own currency at will, MMT maintains that the level of taxation relative to government spending (the government's deficit spending or budget surplus) is in reality a policy tool that regulates inflation and unemployment, and not a means of funding the government's activities by itself. 
COMRADES fucked around with this message at 18:55 on Feb 1, 2019 |
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Feb 1, 2019 18:38
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Just caught up on the thread and lolling at the ~1/3rd of posters who think this is a system we would switch to and not simply a more accurate way of describing and predicting the system we already have, as was clear from the OP.
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Feb 1, 2019 19:40
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Dead Reckoning posted:Then you aren't actually making an economic argument, you're making a moral argument and grasping for an economic theory to dress it up. If the conclusion of MMT analysis was that it is economically most efficient to let the bottom 2% die than to spend any money on helping them, you'd be arguing that MMT is bullshit or that the analysis was wrong, irrespective of its merits. u wot. Economic models don't have "conclusions." Either a model is accurate at describing how certain behaviors affect an economy or they aren't. You can punch in the numbers for letting the bottom 2% die, and maybe you'd see a "desirable" output but you're left with the question if that result is worth the moral depravity of letting 6 million people die. Did you actually read my post or just skip to the part that let you say "GOTCHA!"? The only way I illustrated the government having significant impact on inflation was by causing a massive recession, in which case you'd see an extra penny of inflation. At the size of our economy you'd need to spend about 100 billion to actually see a noticable affect within the year. So "we can't afford it" is a bullshit reason not to do most programs. The ethical factors are much more significant talking point than effect on the economy. Opposing Trump's wall on grounds that we "can't afford it" is bullshit. We need to talk about the environmental impact, the diplomatic ramifications and how it's one more step towards genocide.
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Feb 1, 2019 21:32
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Chitin posted:Just caught up on the thread and lolling at the ~1/3rd of posters who think this is a system we would switch to and not simply a more accurate way of describing and predicting the system we already have, as was clear from the OP.
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Feb 1, 2019 21:34
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Chitin posted:Just caught up on the thread and lolling at the ~1/3rd of posters who think this is a system we would switch to and not simply a more accurate way of describing and predicting the system we already have, as was clear from the OP. There are two sorts of claims floating around in this thread, both by people who support and oppose MMT: 1) MMT is just a more accurate analysis of what we already do. 2) MMT is a panacea that will allow us to implement social programs without worrying about the cost. I might be able to buy 1), but for the reasons Dead Reckoning and a few other posters have noted, 1) doesn't imply 2) and seems inconsistent with it. If it's just a new way of analyzing something and doesn't involve substantive policy changes at all then whether or not we should prefer it is an entirely academic question.
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Feb 1, 2019 23:55
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Gnumonic posted:There are two sorts of claims floating around in this thread, both by people who support and oppose MMT: With regard to how MMT is a more accurate analysis of what we do, I'd ask you to specifically make an evidence-based argument about how MMT isn't a more accurate analysis. Accepting that MMT is accurate doesn't necessarily prompt policy change, but it allows for more policy space. Questions like "can we afford it?" stop being a consideration (note that isn't the same question as "Should we spend money on it?"). All that said, MMT is only valuable if citizens electorally punish elected officials for (a) not taking advantage of the expanded policy space, or (b) abusing the expanded policy space. I'm not going to get my hopes up.
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Feb 2, 2019 01:22
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Like the fact that the US can't default because it can just print money is a trivially obvious fact. If you think about it for a second that is clearly a true thing. It's an 'accurate analysis" of something no one would or ever has questioned. Whats questionable is it being a "one weird trick governments don't want you to know" that lets you get whatever your favorite program is cost free. Or some weird libertarian half step of wishing to live in socialist utopia but trying to figure a way to get out of taxing the rich (or yourself) to do it.
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Feb 2, 2019 01:32
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Socialists don't have a problem with raising taxes on the rich or on themselves, but they realize that most of the electorate isn't on board with it. In that sense, MMT is excellent messaging, because instead of raising taxes on white collar professionals in the suburbs to pay for healthcare for poor people, you pay for healthcare for poor people and then at some point you have to raise taxes but the relationship between these two things is highly abstract. LuciferMorningstar posted:Questions like "can we afford it?" stop being a consideration (note that isn't the same question as "Should we spend money on it?"). Dead Reckoning fucked around with this message at 01:40 on Feb 2, 2019 |
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Feb 2, 2019 01:36
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Owlofcreamcheese posted:Like the fact that the US can't default because it can just print money is a trivially obvious fact. If you think about it for a second that is clearly a true thing. It's an 'accurate analysis" of something no one would or ever has questioned. I mean, you say this, but Obama, for example, is on record saying, "Well, we're out of money now." Elected officials trot out lacking of funding as being a reason for enacting (or not enacting) legislation. I think there's reason to believe people don't understand the system, or are at the very least willfully obscuring how it works. Dead Reckoning posted:If we assume that we have a finite a mount of money to spend, or a finite ability to print more money without either raising taxes or causing too much inflation, then it really is the same question, with the second part being "Should we spend money on it (instead of other things)?" Good thing you're the only one trying to make those assumptions.
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Feb 2, 2019 01:45
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Gnumonic posted:There are two sorts of claims floating around in this thread, both by people who support and oppose MMT: Because MMT is a joke. Its a Charlatans version of Chartalism. The core theory of MMT ('nee Neo-Chartalism) is that money derives value because it is used for taxation. This is a false claim. Currencies exist that can not be used to pay taxes and they retain value. When the foundation of your fiscal and monetary policy is a claim that is known to be objectively incorrect the rest is just axiomatic bullshit designed to tell people what they want to hear.
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Feb 2, 2019 01:54
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Xae posted:This is a false claim. Currencies exist that can not be used to pay taxes and they retain value. Name one.
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Feb 2, 2019 02:09
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