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Owlofcreamcheese posted:You can pay taxes in cash, do they actually do that? Bills cost money to print so I would doubt it, but the point is that you don't need to take the actual money from the tax office and give it to the programs in a big sack with a dollar sign on it. The specific bills and coins don't matter, it's just how many dollars, real or computerised, you have in circulation at the time. If you need it you can borrow against yourself, basically, by just asking your central bank to create money, and you can "pay off" your own "debt" by taxing people and then not spending it. And as long as everyone continues to believe a dollar is worth more or less a dollar in the process, this is all fine.
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Jan 25, 2019 15:52
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I mean depending on where you are it might be cheaper to just throw all the cash collected in Hawaii into a big incinerator rather than shipping it back to the US when it piles up. I think it's more to illustrate the concept though, you don't have to keep track of the fine details, very specifically you definitely don't need to keep track of every penny because it doesn't matter what happens to them, economically speaking. The reason the government would count things down to the penny is because everyone else who doesn't have their own currency, has to. OwlFancier fucked around with this message at 16:09 on Jan 25, 2019 |
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Jan 25, 2019 16:05
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karthun posted:Not to mention that the entire point of fully funding these bills is to avoid annular appropriations where the funding can just be zeroed out effectively eliminating M4A? How do you "fully fund" socialized healthcare for the entire country forever without it being part of the annual budget? Like isn't it necessarily an ongoing expense subject to modification by subsequent budgets? And necessarily so because obviously the cost is likely to increase with the population and over time as more conditions become treatable and the population subsequently gets older and requires more medical care to sustain? OwlFancier fucked around with this message at 19:15 on Jan 26, 2019 |
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Jan 26, 2019 19:07
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Is that... not equally susceptible to manipulation by hostile governments? If there's one thing the republicans like doing it's cutting taxes, obviously. I mean I guess it's not a bad thing to try to do but I'm not sure there is a way to credible write "permanent good healthcare" into law and not have it be easily breakable by a government so inclined to doing it. Your insurance against that is popular support for the program which is achieved largely by creating universal dependence on it, so that it becomes politically impossible rather than legally difficult. OwlFancier fucked around with this message at 20:29 on Jan 26, 2019 |
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Jan 26, 2019 20:26
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There is the question as to whether not simply wholly rejecting the argument of "we need to be careful about paying for things" is an obstacle to getting the programs in place to begin with. If people buy into the tax and spend idea of monetary policy they become susceptible to other forms of attack on national spending such as "we need to balance the budget" or the perennial favourite: "the national budget is like a credit card". Convincing people that the government works just like they do is a major underpinning of quite a lot of reactionary economics and it would be valuable, I think, to break that idea.
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Jan 26, 2019 21:34
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So if I'm understanding right the size of your deficit is basically the size of your economy? Or should track relatively closely? Because the deficit represents the liquid money supply, more or less?
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Jan 27, 2019 14:53
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Family Values posted:The size of the deficit matches (or needs to) the annual growth of the economy. You have to add currency to the economy at the rate that the economy grows so that you don't run into effective deflation (i.e. try to keep the 'share of the economy' that a single dollar represents constant) Sorry, the debt is the size of the economy then, the deficit year on year being the size of the added currency each yeah because yes you need currency proportionate to the amount of exchange happening. Keep conflating deficit and debt.
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Jan 27, 2019 18:53
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I think part of the notion is that politicians are ideologically opposed to high taxes and public spending because politicians are almost all rich people who own things. They therefore do not want to pay taxes and also do not want services provided in ways that do not maximise their ability to extract value from them. This is, in part, achieved by instilling a belief in the general public that government services and taxes are both evil and irresponsible because taxes simply go into a black hole of bureucracy and services are going to bankrupt the government. So, popularizing the belief that taxes literally do go into a black hole and this is fine and that service provision cannot bankrupt the government unless the government deliberately tries to make it happen, is an instrument against that. Essentially there is no such thing as fiscal discipline, politicians vote to spend money in ways that benefit them regardless of how wasteful or destructive it is to the country at large or the people in it, and they justify it in part by spreading the lie that national finances work the same way that your personal finances do. A wide scale MMT understanding of public finances would be beneficial to improving democratic control of society because the alternative is really stupid and destructive understandings of how it works.
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Jan 28, 2019 01:04
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Owlofcreamcheese posted:Honestly it seems like the opposite, where the link where the government takes X% of my paycheck then buys food for poor people or roads or something is a lot more acceptable than the idea that the government just takes my money and does nothing with it and that vaguely helps manage national inflation levels totally separate from paying for government programs. You tax the rich guy for 10 million dollars because even if you only left him with 1 million dollars he can still buy literally anything he could ever reasonably want or need. The point of tax is to acquire money, you acquire money best from people with lots of it, both because they have all the money and because it doesn't actually harm them if you take it off them. None of that changes because of how the money works. You take millions off rich people who don't need it so that you can create it and give it to poor people who do need it while keeping a dollar worth about the same as before. That's no different to moving the money from one to the other in a big swag bag except that one of them is how it actually works. If inflation is a function of available currency per unit of economic activity, then there's no way not taxing the rich and taxing all the poor will actually help it, because poor people don't accumulate currency anyway, rich people do. OwlFancier fucked around with this message at 01:36 on Jan 28, 2019 |
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Jan 28, 2019 01:31
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Owlofcreamcheese posted:Are you agreeing with me or disagreeing with me? You... don't need an exact number... More money = more effective tax. Money from people who have literally no legitimate use for it = ideal tax. Under either circumstance..? It isn't the act of doing taxes that reduces inflation it's the act of taking money out of the economy that does it, so more money taxed = more inflation reduction. The most effective tax remains the one that raises the most revenue with the least harm, which is exactly the same logic as taxes have always had... You don't just adopt absolute moon logic about how tax revenue works because the function of tax revenue has changed. The understanding is that you tax the rich guy a lot because he has all the money and you take it off him to reintroduce it in places that are useful. But it's not the same exact money. Also importantly is that this model helps you to understand the economic stimulus effect, if you keep injecting money at the bottom that fuels economic activity and grows the economy, if you want to operate under the capitalist model then this is very desirable, you issue currency at the bottom and structures grow to utilize labour to get that money off people, then you tax it again at the top and stuff it back in at the bottom, plus a bit more so that you grow even more businesses to get even more money off people. Injecting cash at the bottom of society either in the form of service provision which saves people money or in the form of flat injections of cash is what stimulates the allegedly "productive" enterprises in the world. They need people to have money in order to get it off them, an economy where people sitting on increasing piles of lucre argue about how best to pry pennies out of the hands of a population with bugger all is a pretty weak economy. The MMT model I find helps with that understanding a lot. OwlFancier fucked around with this message at 01:55 on Jan 28, 2019 |
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Jan 28, 2019 01:45
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Dead Reckoning posted:But, unless I'm misunderstanding MMT proponents, you take money from a rich guy and then destroy it, with that transaction being only vaguely related to the useful spending of money elsewhere. Yes, but if you don't do the taking part you're just shoveling money into the bottom of society and never taking anything out, thus constantly inflating your currency and devaluing it. Like shoveling coal into the firebox and never letting off the steam. They aren't directly related but they should roughly round out and in particular, you can quite comfortably shovel a bunch of extra cash in right now if it results in economic growth fairly promptly, because that's the other way you can keep your currency supply to economy ratio about right. And there's a lot of projects you can do that do produce economic growth, infrastructure and things that improve the ability of people to work like education and healthcare and poo poo. OwlFancier fucked around with this message at 02:02 on Jan 28, 2019 |
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Jan 28, 2019 01:58
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Owlofcreamcheese posted:This is what I am saying, and why I feel like you are agreeing with me but not realizing it. This is the conventional idea of how taxes work. Which has the advantage of being very very clearly right and fair and just. Moving away from this framework at best obfuscates this relation and at worst suggests other answers that you or I would not feel are as intuitively fair. How does it? What mechanism of action suggests that actually not taking any money out of the economy while continuing to print it to pay for things is the preferred option?
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Jan 28, 2019 02:03
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What are you calling "the classical framework" because as far as I'm aware there's the idea that the government has a big pile of money and it can't spend more than that without borrowing from the government sized loan shark and when the government does this it means that the international loan shark's gonna come round with a big hammer and break the country's kneecaps which means your job. If you're gonna break that dumb idea outta people's heads you might as well replace it with one that illustrates just how not like you the government operates. If you go around telling people the government's finances operate inutitively you invite all the nonsense scare tactics about how governments can't have deficits because if you had a deficit you'd go bankrupt. Breaking that idea is a desirable thing. And to that end the MMT understanding has a lot of utility, as well as being apparently right. If people are for some reason on board with the tax and spend view of things then they probably aren't the people you necessarily need to convince, but a lot of people don't seem to be at that point. If you're putting in the effort to change that you might as well change it to something that wholly rejects the idea of the government being liable to anyone or having fixed budgets and paints the idea of government spending as being entirely a political decision. OwlFancier fucked around with this message at 02:51 on Jan 28, 2019 |
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Jan 28, 2019 02:32
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I am extremely skeptical that convincing people of 1 but not 2 would be worse than the present state of affars which is clearly not stable or livable for an overwhelming majority of people. Your choice in that instance is not present stability vs the prospect of future instability but great present instability interspersed with periods of things not actually being on fire but still being lousy.
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Jan 28, 2019 03:02
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You can put money into making more medical professionals and teaching staff and improving conditions for both helps greatly with retention of ones you train. Lack of supply is lack of investment, also solved by spending money. You can specifically incentivize particular careers by mandating the creation of schools for them and offering generous packages for enrollment. Also in the short term you can absolutely buy labour via immigration though you should look to create domestic supplies too because it isn't the job of the rest of the world to staff your own systems because you're too stingy. OwlFancier fucked around with this message at 04:10 on Jan 29, 2019 |
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Jan 29, 2019 04:05
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Gnumonic posted:In a democracy, it's probably a good thing if we adopt a macroeconomic policy that isn't incomprehensible to the average voter? "Tax people in order to pay for programs" is pretty comprehensible. I'm not sure adopting whatever economic policy is easy to explain regardless of its veracity is necessarily the best foundation for a democracy... I mean it's how the world works, sure, but it's a bit silly to pretend it's democratic when you're suggesting "tell people nonsense platitudes to get them to vote for you"
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Jan 30, 2019 01:05
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Given that a big concrete wall isn't what you'd call an effective long term economic stimulus the answer is almost certainly "a lot more than you would need to delete if you funded an education program"
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Jan 30, 2019 02:52
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I mean yeah probably you could look at previous investments in similar economic situations and seeing what the results were, or looking at what your economy needs in terms of skills and train people towards that? Is it a super exact science? No. But again this is how it actually works, supposedly so whether or not you like the level of inexactness it's unfortunately what you have to work with? You have time to be reactive, regardless. If your currency is changing value at a rate you don't like you can just make changes to adjust the rate? Economies of major first world countries are, on the whole, fairly robust things? They generally work regardless of how loving incompetent the politicians are. It takes serious effort to actually break them, they're not gonna keel over because you decided to spend money on things you know are going to be in some way useful to the economy, as almost all government investment in productivity is. OwlFancier fucked around with this message at 03:08 on Jan 30, 2019 |
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Jan 30, 2019 03:04
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You can't make an informed choice if you're using a system that's wrong, either... Just because you have a bunch of words you can say in response to a question doesn't mean you're actually right about it... If you're operating under the notion that there is such a thing as truth then it's really weird to follow that up by "except it's complicated and that makes me uncomfortable" Maybe you just have to accept that you can't actually make informed choices? OwlFancier fucked around with this message at 03:20 on Jan 30, 2019 |
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Jan 30, 2019 03:16
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Owlofcreamcheese posted:Okay, but that is the exact problem. If we talk in conventional terms a 50 billion dollar wall is 50 billion dollars. I can say exactly how many text books and how many ipads and how many teachers 50 billion can buy. If trump starts building a wall and president bernie sanders cancels it I can say that exactly 50 billion - exactly what was spent can be reallocated to buy babies formula or whatever. Likewise if the wall is built over 5 years I can say it needs 10 billion of taxes a year and if it's built over ten years it needs 5 billion taxes per year raised. You can very clearly know how much something costs... The concept of calculating how much money you need to spend to do a thing does not cease to exist because the mechanism by which you acquire the money is disputed... What you can do with an MMT approach is look at what you're spending money on and consider what it's likely to do to the economy. So it's not "we need to tax 50 billion dollars right now to pay for 50 billion dollar thing" and instead it's "if we spend 50 billion dollars on thing and it produces economic growth, we do not necessarily need to tax 50 billion dollars to pay for it, also we can absolutely do it in that order, because we effectively borrow against ourselves and the economy as a whole can flex to accomodate that amount of deficit easily." If you prefer the first view of things then that's... nice for you but you're still fundamentally arguing that because it's a system that makes intuitive sense to you and doesn't require further investigation, that must be how things work. Dead Reckoning posted:Do you understand why having the MMT "real" cost of every federal program, i.e. of how much it contributes to inflation, being "I dunno, it's abstract, ask your favorite economist" creates perverse incentives? I get that balance budgeting is a lie for any country that issues its own currency, but it at least allows a comparison between alternatives in a quantifiable way. A quantifiable and wrong way. What do "perverse incentives" have to do with it when you're instead suggesting adopting an incorrect model because it gives you numbers to compare that don't actually reflect real things? Does having the numbers just make you feel better regardless of whether they have any basis in reality? Even if you adopt the simplistic model it begs the question of how any given investment is going to affect future tax revenue, you're obviously wilfully removing elements under that system to make prettier numbers. OwlFancier fucked around with this message at 03:34 on Jan 30, 2019 |
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Jan 30, 2019 03:27
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Owlofcreamcheese posted:It's an inefficiency. I am absolutely sure some perfect nonpartisan ultracomputer could run a country on infinite free money and perfect domination of inflation and deflation, handing out random tax bills for seemingly random amounts to seemingly random people at just the right times for just the right time that it perfectly counterbalances the ripple effects. But that doesn't seem like a realistic system for a bunch of guys in a democracy to do. Which means we have to use a less efficient and less perfect system. So your argument is literally that it's too complicated for humans to understand because it doesn't work exactly the same way your bank account does?
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Jan 30, 2019 03:35
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Dead Reckoning posted:OwlFancier clearly believes that printing $5bn and spending it to build a giant wall in the desert would be more inflationary than printing $5bn and spending it to send people to college. But how do we know that in an algorithmic, verifiable way? This is really important, because if it isn't possible to accurately and precisely predict what effect government spending will have on the inflation rate, then we can't logically decide what programs we should print money for with the limited capacity of the market to absorb excess inflationary pressure. And if that's the case, MMT doesn't tell us anything useful about how to run the government. If you take 5 billion dollars and put in a big pile in the desert, and you take 5 billion dollars and spend it on starting or supporting any business whatsoever which do you think is going to create a greater return? What you're arguing is that the entire concept of investment is unknowable and that people who run companies and allocate funding to expand their businesses do it entirely at random. What MMT tells you is that you have, right now, as much money to invest as your economy can sustain you printing.
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Jan 30, 2019 15:34
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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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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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