by This analysis is basically right about the economics, but very wrong about the finance.The problem we face with human contributions to climate change and the levels of pollution that are unhealthy for a vast majority of people is basically economic in the sense that negative externality is being socialized. This means that in markets, goods that generate negative externality through use or in the course of their production are sold at below true cost.The result is mispricing of negative externality in markets. The economic answer is imposing true cost rather than using cost of goods sold and mark up with respect to pricing. This can be addressed by preventing socialization through tax imposition that approximates true cost.The solution lies in tackling economic rent politically, that is,
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Mike Norman considers the following as important: GND, Green New Deal
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This analysis is basically right about the economics, but very wrong about the finance.
The problem we face with human contributions to climate change and the levels of pollution that are unhealthy for a vast majority of people is basically economic in the sense that negative externality is being socialized. This means that in markets, goods that generate negative externality through use or in the course of their production are sold at below true cost.
The result is mispricing of negative externality in markets. The economic answer is imposing true cost rather than using cost of goods sold and mark up with respect to pricing. This can be addressed by preventing socialization through tax imposition that approximates true cost.
The solution lies in tackling economic rent politically, that is, preempting financial rents, lands rents, natural resource rents, and monopoly and monopsony rents, along with crime, including legalized crime, as well as socializing negative externality.
Why aren't we doing this? Because it would destroy "capitalism" as we know it.
Why is he wrong about solution when he proposes a carbon tax, which would address socializing negative externality? This is not an argument against using MMT analysis, which, after all, is based on a correct institutional description. MMT simply argues that taxation is not needed to "pay for" a GND, since taxation doesn't pay for anything the government spends on.
MMT does NOT argue that imposing taxes to address economic rent and negative externality is a bad idea even though it is unnecessary for funding, although at least some would argue that it preferable to preempt economic rent anti rather than tax it away post. Better to keep the petroleum in the ground.
MMT argues that taxation is needed for two reasons: to create demand for a currency and to control inflation. Moreover, taxes can also be used functional for public purpose by discouraging behavior that is taxed.
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