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Really happy to see a thread like this, good job.BrandorKP posted:MMT didn't make sense to me until I realized it was basically stocks and flows in the trade thread. Taxes, spending, fed actions, these are all just flows or controls on flows some positive and some negative. I think the concept of "sectoral balances" can be really useful for helping illustrate this point, and it might be worth throwing a reference to the concept into the op. DrSunshine posted:If taxes are just "deleting" money out of existence, what's the functional difference between taxing the rich at a higher rate, and simply paying the poor more generously? Like, would it be possible to get rid of inequality by paying everyone enough such that everyone is a millionaire? Ultimately there are still limits on government spending such as the stock of actual resources in the economy. At some point if you don't tax the rich or somehow regulate prices there are going to outspend everyone else and bid up prices on anything scarce. MMT doesn't solve the problem of scarcity it just gives us a more accurate perspective on how government finances work.
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# ¿ Jan 25, 2019 03:10 |
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# ¿ May 16, 2024 01:11 |
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silence_kit posted:Agreed. It isnt a very useful policy design model, to use lingo from engineering, because one of the key inputs to the model, inflationary risk, is hard to predict. If that were true then this objection would equally apply to any current government spending since we apparently we just cannot know whether that latest tax cut or expenditure will trigger a round of impossible to predict inflation.
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# ¿ Feb 16, 2019 20:38 |
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TrixR4kids posted:Someone from Jacobin did a hit piece on MMT and a job guarantee (semi) recently, I'll admit to not being equipped to really know how much their critiques are valid: https://www.jacobinmag.com/2019/02/modern-monetary-theory-isnt-helping Somehow I knew something like this was coming before it shows up late in the article: quote:On social media, the style of argumentation is even more striking. Critiques are first met with the assertion that you just don’t understand — you haven’t read enough of the literature to comment knowledgeably. But they’re quick to resort to mockery and insult. One of my favorite instances came from two of the more prominent younger members of the school, who had these persuasive reactions to my critiques on Facebook. Henwood has been around left spaces for a long time and probably isn't terribly well accustomed to being attacked by a younger generation of lefties who are saying he's actually too conservative in his thinking. In its own way this kind of comes off as the lefty economist equivalent of that Jonathan Chait piece complaining about the totalitarian campus radicals who don't give him enough respect. It's kind hard to separate his judgement that MMT is a terrible misstep in the left's Gramscian war of position from his personal feeling of aggrievement over the unfair treatment that he and some others have endured online from advocates of MMT. That isn't to say that there's nothing of substance in that article but the author really rhetorically overplays his hand. This piece just calls out for a re-write that maybe involves fewer allusions to Henwood's hurt feelings.
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# ¿ Mar 6, 2019 20:24 |
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tl;dr when you're a published academic author writing a longform critique of a rival school of economics you probably shouldn't include random screenshots of somebody on facebook making fun of you by capitalizing their words in a funny way. Yes every published author actually is that thin skinned in real life but usually by the time you're as old as Henwood is you've gotten better as disguising it!
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# ¿ Mar 6, 2019 20:27 |
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theblackw0lf posted:Really encourage people to read this article on how MMT views inflation, and why that's so important for making policy decisions This is absolutely not the only restraint on government spending. Under capitalism the health of the economy relies on the accumulation of capital within the private economy. If you pass a bunch of policies that reduce the social power of the boss (i.e. getting fired is no longer scary because you always have a government job waiting for you) then this can undermine the profitability of capitalist firms. It cannot be emphasized enough that while MMT gives us an interesting way to think about fiscal policy it does not solve the problem of class conflict. No amount of good fiscal policy can compensate for the fundamental imbalances of power that actually structure the economy. As long as government is run by and for the rich MMT alone cannot achieve anything. MMT will be useful insofar as it aids the left in its war of position with the capitalist class. Squalid posted:Could you give an example of how taxes might increase inflation? Im having trouble imagining it A tax on fuel could increase costs throughout the economy which might be passed on to consumers in the form of a price increase.
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# ¿ Mar 6, 2019 20:56 |
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I think this might help shed on light on a hypothetical MMT approach to inflation. It also points out some of the failures of the current approach and suggests why an MMT approach might be better.Financial Times posted:
Helsing fucked around with this message at 23:15 on Mar 6, 2019 |
# ¿ Mar 6, 2019 23:11 |
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MixMastaTJ posted:Technically any tax will reduce consumption, universally lowering demand and thus reducing economic growth. If a hypothetical tax on real estate speculation resulted in lower rental and housing prices then the additional income going to renters and home buyers might be more than enough to compensates for the reduced income accruing to home owners and landlords. I think the impact of any given tax needs to be assessed based, as much as possible, on the actual economic circumstances under which the tax would be applied. Typo posted:taxes can cause inflation if you assume there's no propensity to consume at the individual/household level and you take the money and the government spends it Or you could have a scenario where supply chain bottlenecks mean that a decrease in demand doesn't stop an increase in prices. Imagine the (extreme example) of the price of bread during a famine. People might be dying en masse, farmable land might be decreasing, and aggregate demand might be plummeting but the handful of people still capable of producing food could raise prices.
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# ¿ Mar 7, 2019 19:28 |
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MMT doesn't advocate for "paying" for programs with inflation, it merely says that the government's ability to spend is constrained by the need to avoid excessive inflation. Besides which, most MMT economists advocate for a variety of taxes, including taxes aimed specifically at curbing wealth inequality. The politicians championing MMT are also calling for an increasing top income tax rates to 70%.
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# ¿ Mar 22, 2019 03:11 |
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Good to see intellectual heavyweights Typo and Owlofcreamcheese have really brought their A game to this discussion.
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# ¿ Mar 22, 2019 15:04 |
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# ¿ May 16, 2024 01:11 |
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It's pretty badass that MMT is simultaneously libertarian and socialist at the same time.
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# ¿ Mar 22, 2019 18:07 |