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Another excellent article about MMT. The reason the government doesn’t need to sell treasury securities, or levy taxes, to spend money is that the central bank, under the control of the treasury, can pay for everything by conjuring up electronic money. In MMT’s ideal world there would still be taxes, but their main purpose, aside from lessening inequality, would be as “offsets” to keep inflation under control. Taxes would drain just enough money from consumers and businesses so total spending in the economy won’t be excessive. It’s tempting to view MMT’s conception of fiscal policy as essentially similar to that of the mainstream—“Hey, they believe in taxes, too!”—but that’s not quite right. MMTers hold that inflation isn’t primarily the result of excessively strong growth. They blame
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Another excellent article about MMT.Another excellent article about MMT. The reason the government doesn’t need to sell treasury securities, or levy taxes, to spend money is that the central bank, under the control of the treasury, can pay for everything by conjuring up electronic money. In MMT’s ideal world there would still be taxes, but their main purpose, aside from lessening inequality, would be as “offsets” to keep inflation under control. Taxes would drain just enough money from consumers and businesses so total spending in the economy won’t be excessive. It’s tempting to view MMT’s conception of fiscal policy as essentially similar to that of the mainstream—“Hey, they believe in taxes, too!”—but that’s not quite right. MMTers hold that inflation isn’t primarily the result of excessively strong growth. They blame
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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The reason the government doesn’t need to sell treasury securities, or levy taxes, to spend money is that the central bank, under the control of the treasury, can pay for everything by conjuring up electronic money. In MMT’s ideal world there would still be taxes, but their main purpose, aside from lessening inequality, would be as “offsets” to keep inflation under control. Taxes would drain just enough money from consumers and businesses so total spending in the economy won’t be excessive.
It’s tempting to view MMT’s conception of fiscal policy as essentially similar to that of the mainstream—“Hey, they believe in taxes, too!”—but that’s not quite right. MMTers hold that inflation isn’t primarily the result of excessively strong growth. They blame much of it on businesses’ excessive pricing power. So before trying to choke off growth to kill inflation, they would try to break up monopolies and stop banks from making too many loans.
“The more actively we regulate big business for public purpose, the tighter the full employment we can achieve,” three MMTers wrote in a letter to the Financial Times’ Alphaville column that was published on March 1.
Bloomberg