By Stephanie Kelton and Randall Wray
A few days ago, Jared Bernstein posed some Questions for the MMTers in order to gain a “better understanding [of our] arguments.” We appreciate his interest in our ideas and, especially, his direct appeal for clarification of our views. He raised four big questions, which our Australian counterpart, Bill Mitchell, has already answered in his own three-part series. What follows is a response from two North American MMTers.
Jared: Overheating is possible, and taxing is a lousy mechanism for dealing with it.
We agree that relying on Congress to raise/lower taxes to fine-tune the economy will not succeed. We agree with Janet Yellen that stronger automatic stabilizers are needed to enhance cyclical stability, taking pressure off lawmakers (and the