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LloydDobler posted:Is this another way of saying that if everyone had money, everyone else would jack prices up on everything and the money would go down in value, rendering it moot? If so, how is that really so different than keeping tabs on dollars in vs dollars out, like an individual? The dollars going into and out of the government are only one factor influencing inflation. There's no reason to think that a balanced budget is necessarily optimal, it's just an arbitrary benchmark. It's like demanding that Blizzard "pay for" quest rewards by precisely modulating shop fees to match, coin-for-coin. Having said that, I don't really see the difference between MMT and Keynes.
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Jan 24, 2019 05:31
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Gnumonic posted:This is what worries me about leaning too hard into a "print more money" approach. I have no idea whether MMT is legitimate on the merits, but it seems eminently possible that a country could end up in a scenario where the inflationary effects of printing money were under-accounted for and the only way out is a politically unpalatable tax increase. (Such a situation would almost certainly lead to printing more money, on the assumption that that's more palatable politically, and risks hyperinflation.) It's worth remembering that you can also fight inflation with monetary policy, i.e. the Fed. My understand is that ultimately, the economy is a question of distributing scarce goods and services. If the government is buying everything up, then the private sector prices will increase due to scarcity. But if the government spending is activating underutilized resources, then supply as well as demand is increasing, so inflation would not be expected. Thus it's helpful to think of the government as influencing aggregate supply and demand, rather than in terms of cash flow. theblackw0lf posted:It should be said we’re taking about Kenysian economics as practiced today, not Keynes himself. In fact some have said MMT is just a way of getting back to what Keynes originally meant. As an economics minor from a prestigious Midwestern state university, I never did read past Keynes, so maybe that's why I was confused.
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Jan 24, 2019 17:48
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