Do We Need To ""Pay For" Federal Programs? Talking Modern Monetary Theory

The Something Awful Forums > Discussion > Debate & Discussion > Do We Need To ""Pay For" Federal Programs? Talking Modern Monetary Theory

Infinite Karma: Oct 23, 2004; Good as dead

Dead Reckoning posted:

I think everyone understands the theory, the question is whether that theory tells us anything useful about how we should run our government. Because same people are saying, "well, it's really just a more accurate way to model what already happens", and others are saying, "Actually, it lets us spend whatever we want on democratic policy priorities without raising taxes."

It tells us that hyperinflation is a stupid loving bogeyman. And it tells us that a "balanced" budget is meaningless. So we should measure the inflationary/deflationary effects (and money multiplier effects) of spending programs, and the same effects of tax structures separately. Because they're un-loving-related.

It's like deficit hawks think that's a bad faith argument? Maybe because they use bad faith arguments to justify their spending preferences? If this looks like a left-wing biased theory... maybe it's because there's a factual basis for these policies instead of just a tribal preference.

# ¿ Feb 15, 2019 18:51

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# ¿ May 15, 2024 18:31

Infinite Karma: Oct 23, 2004; Good as dead

Inflation isn't a bad thing. Too much inflation is a bad thing. But too little inflation is also a bad thing. Those are factual and politically neutral statements.

Inflation is a good thing, because it eases debts and increases liquidity in the economy. It also devalues savings and capital, while not devaluing labor (hypothetically), transferring power from the haves to the have-nots. Those are politically loaded statements, but are still good faith arguments, even if you don't want that outcome.

Typo posted:

from a pure political mechanism perspective MMT also demonstrates how dysfunctional the US system is that we are basically talking about relegating the responsibility of revenue raising from an elected legislature to an unelected technocratic institution

That seems like a "how the sausage is made" problem. It's not that the legislature doesn't raise revenue, they just supervise the operations of a technocratic organization more complex than 500 legislators can manage on their own. Likewise, people accept that taxes pay for necessary things right now, even if nobody likes paying taxes. If we realize having money sinks in the economy is necessary, it's unappetizing... but it's still necessary.

# ¿ Feb 15, 2019 20:18

Infinite Karma: Oct 23, 2004; Good as dead

MixMastaTJ posted:

-What if hyperinflation?

...

-For most countries this is a legitimate concern. However, the US has the strongest economy in the world and every other country is invested in making sure USD retains value. If the USD fails it's not gonna be from welfare progtams, it'll be because there's a global Communist revolt which MMT might help prevent.

I have to wonder if this is a legitimate concern. Have strong economies ever actually "oopsed" their way into hyperinflation? In real life, the only examples I can think of were places that were weak economies already in dire straits - hyperinflation is one kind of market crash, but they were on a path towards a devastating market crash regardless. Are there prosperous countries who imploded that I don't know about?

# ¿ Mar 6, 2019 20:13

Infinite Karma: Oct 23, 2004; Good as dead

theblackw0lf posted:

[...] inflation is primarily a resource scarcity issue. So the answer might not be raising taxes, it might be finding ways to increase resources. Or it might be increased regulations to restrict companies that eat up resources.

That's kind of the genius of a green/sustinable infrastructure push. Having the government "fiat" its way into building out infrastructure (instead of "borrowing" it, i.e. enriching finance companies in a shell game) is a huge win for available resources that will offset inflation. Traditionally the cost has been that it causes pollution and environmental damage and a whole host of externalities... but if we can roll out green infrastructure, it's basically a win-win.

# ¿ Mar 6, 2019 20:50

Infinite Karma: Oct 23, 2004; Good as dead

Typo posted:

What the gently caress does this even mean

Government prints money to pay for building solar power plants and fiber internet and smart grids and other useful things, instead of borrowing it or getting it from taxes. These are scarce resources that can be used by the public. Instead of there being more money in circulation to buy the same amount of resources (this is inflation), there is more money in circulation to buy more resources (which is not inflation).

# ¿ Mar 6, 2019 23:05

Infinite Karma: Oct 23, 2004; Good as dead

Owlofcreamcheese posted:

Paying for things via inflation is taking people's wealth, but it is less direct than a tax, and disproportionately effects people with fixed incomes or simple assets. Just having a regular old tax lets you actually tax the people that should be taxed and rebate the people that shouldn't be. an inflation based "tax" just makes the poor guy's dollar worth less (but probably not the rich guy's stock option)

Like Helsing just said, inflation is what happens if you spend but don't tax.

The whole idea of MMT is that you balance out the inflows of central bank cash into the economy with outflows from taxes. Inflation is what happens when the levers are aligned badly, not as a natural consequence.

The reason it's different from orthodox economics is because those two numbers don't have to equal zero to avoid inflation.

# ¿ Mar 22, 2019 03:17

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# ¿ May 15, 2024 18:31

Infinite Karma: Oct 23, 2004; Good as dead

Moridin920 posted:

We've been doing MMT for years (decades?) it's just that instead of funding things the population actually needs we spend it on idiot grift programs for rich people and also tax breaks for rich people and also hand outs for rich people when they destroy their companies and the economy. Instead of Keynesian stimulus we do trickle down but the end result is the government is still injecting tons of money into the economy - just at the top versus an even distribution.

Like hello lol we have a massive gov't deficit that only grows every year and there is no danger of default unless the gov't does it on purpose to own the libs or whatever.

I don't get why it is adopting a new monetary paradigm versus just recognizing that this is how it already functions.

The non-elite are so disenfranchised that it causes massive cognitive dissonance to imagine that they could just vote for people like them who want populist programs instead of mealy-mouthed pols. It's easier to keep believing that they're not qualified to understand than it is to internalize that they've been duped for their entire lives and it really is that simple.

# ¿ May 21, 2019 19:16

The Something Awful Forums > Discussion > Debate & Discussion > Do We Need To ""Pay For" Federal Programs? Talking Modern Monetary Theory