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MMT’s Fatal Flaw: Political Willpower — Michael Lebowitz

Summary:
MMT’s Fatal Flaw #1 – Measuring InflationThe first flaw is in the measurement of inflation. In the article mentioned above, we state:“Inflation is impossible to calculate. Inflation is impossible to calculate. No, that is not a typo. For emphasis, let us put it another way. Inflation is impossible to calculate.The point that inflation is impossible to calculate cannot be overstated.”…MMT’s Fatal Flaw #2 – Political WillpowerThe second and more vexing problem with inflation is politicians’ willpower and vested interests. Should we expect elected officials to reduce spending and raise taxes when inflation is problematic? One needs only to consider the current environment when answering the question....Inflation is MMT’s fatal flaw. Inflation is the fly in MMT’s ointment.The current high

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MMT’s Fatal Flaw #1 – Measuring Inflation
The first flaw is in the measurement of inflation. In the article mentioned above, we state:

“Inflation is impossible to calculate. Inflation is impossible to calculate. No, that is not a typo. For emphasis, let us put it another way. Inflation is impossible to calculate.

The point that inflation is impossible to calculate cannot be overstated.”…

MMT’s Fatal Flaw #2 – Political Willpower
The second and more vexing problem with inflation is politicians’ willpower and vested interests. Should we expect elected officials to reduce spending and raise taxes when inflation is problematic? One needs only to consider the current environment when answering the question....

Inflation is MMT’s fatal flaw. Inflation is the fly in MMT’s ointment.

The current high inflation episode exposes MMT’s fatal flaw. Despite the flaw, we suspect the push for MMT will continue, and the rules around inflation will change, allowing for more inflation. Without stringent inflation guidelines [contradiction: he says inflation cannot be measured] and willpower, MMT is nothing more than a printing press for the government....

Historically, MMT-like schemes have always resulted in default. We do not doubt that the adaption of MMT leads us on that same path.

I suspect quite a few people view it this way.
 
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MMT’s Fatal Flaw: Political Willpower
Michael Lebowitz
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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