by Some setting the record straight on MMT.MMT is an economic framework for understanding how the macroeconomy works and the role of the currency-issuer in the monetary economy.It has a rich history and provides a novel way of generating that understanding.Its predictive capacity is excellent over 25 or more years. Many economists and observers keep saying they knew all this stuff but if you go back through the historical record, they were not rehearsing these ideas or conclusions until recently.But MMT is not a ‘movement’, nor, is it a progressive agenda.I keep reading things like “MMT advocates taxing the rich”.It doesn’t.What an understanding of MMT will allow one to conclude is that there is no contingency between the provision of public services or infrastructure by government and tax
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MMT is an economic framework for understanding how the macroeconomy works and the role of the currency-issuer in the monetary economy.It has a rich history and provides a novel way of generating that understanding.
Its predictive capacity is excellent over 25 or more years. Many economists and observers keep saying they knew all this stuff but if you go back through the historical record, they were not rehearsing these ideas or conclusions until recently.
But MMT is not a ‘movement’, nor, is it a progressive agenda.
I keep reading things like “MMT advocates taxing the rich”.
It doesn’t.
What an understanding of MMT will allow one to conclude is that there is no contingency between the provision of public services or infrastructure by government and tax revenue it might receive from high income or wealth individuals.
MMT also provides a coherent aggregate explanation about the role of taxation in fiscal policy, which excludes any causal association between the government receiving tax revenue and spending.
That is it.
MMT is agnostic about where the tax revenue comes from....MMT is not a policy framework. That is a different issue.
The body of knowledge does not cover questions of incidence, progression or regression and all the other facets of taxation policy and structure that experts in that field are interested in.When I talk about the need to ‘tax the rich’, I am expressing a value system, which is quite separate from when I am teaching the principles of MMT.
I want to tax the rich to ensure they have less financial resources so they can spend less on things like lobbying governments, influencing elections, dominating the media etc....
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia