by Summary:
Poorly argued. Economics professor Jonathan Portes admits that the fundamentals of MMT about operations are correct, and that MMT economists recognize that the financial constraint on fiscal deficits is inflation. Then he concludes that it is obvious that MMT cannot work since the real constraint is available resources and government spending uses resources instead of creating them. So, over time, inflation cannot be avoided other than by increasing taxes, that is, limiting the deficit by reducing or reversing its growth. Like the MMT economists didn't realize this and have not addressed it. Public investment is a key aspect of government spending in order to increase supply in needed sectors of the economy. Moreover, rising demand draws forth private investment to increase supply
Topics:
Mike Norman considers the following as important: MMT, MMT criticism, MMT critics
This could be interesting, too:
Poorly argued. Economics professor Jonathan Portes admits that the fundamentals of MMT about operations are correct, and that MMT economists recognize that the financial constraint on fiscal deficits is inflation. Then he concludes that it is obvious that MMT cannot work since the real constraint is available resources and government spending uses resources instead of creating them. So, over time, inflation cannot be avoided other than by increasing taxes, that is, limiting the deficit by reducing or reversing its growth. Like the MMT economists didn't realize this and have not addressed it. Public investment is a key aspect of government spending in order to increase supply in needed sectors of the economy. Moreover, rising demand draws forth private investment to increase supply
Topics:
Mike Norman considers the following as important: MMT, MMT criticism, MMT critics
This could be interesting, too:
Mike Norman writes Jared Bernstein, total idiot. You have to see this to believe it.
Steve Roth writes MMT and the Wealth of Nations, Revisited
Matias Vernengo writes On central bank independence, and Brazilian monetary policy
Michael Hudson writes International Trade and MMT with Keen, Hudson
Like the MMT economists didn't realize this and have not addressed it. Public investment is a key aspect of government spending in order to increase supply in needed sectors of the economy. Moreover, rising demand draws forth private investment to increase supply when doing so is profitable. The assumptions also overlook the role of the external sector in supply. It's complicated.
But the fundamental point remains. The argument that "we cannot afford it" financially is incorrect. Of course, there are other considerations, and the MMT economists have dealt with them in their work. Ignoring this vitiates the argument.
Jonathan Portes | Professor of Economics and Public Policy at the School of Politics & Economics of King's College, London
In addition, Jonathan Portes builds his argument on quote of Richard Murphy, who is not only not an MMT economist but also not an economist. He is a British chartered public accountant. In addition, Richard Murphy is not a good candidate to select to represent MMT since he and Bill Mitchell, one of the founding MMT economists, have recently had a very public disagreement. Jonathan Portes seems to be ignorant of this.
Building a case against MMT without reference to actual MMT economists or citations of their work is unprofessional and Jonathan Portes should be embarrassed about it. Another fail.
Prospect
Nonsense economics: the rise of modern monetary theory
See also
MMT economist Scott Fullwiler tweeted:
