The chaos of Trump is probably partly his spiteful idea of fun and partly the historical psychosis of thinking that doing the same thing that didn't resolve over and over...is going to result in a resolution. It IS true that the chaos of identity crisis is a requisite for breaking out of the orthodox mindset and being willing to actually look at alternatives. Thats the mental phenomenon that always accompanies genuine change and is particularly difficult with new paradigms...because it requires embracing conceptual illogic which is an historical fact of accomplished paradigm changes but is rare in an era of scientific intellectual inquiry ONLY.
So it takes bravery, open mindedness, creativity and a higher toleration of ambiguity. However, the most important thing needed to break through to these desired traits is to have a program whose benefits are mentally demonstrable to the general populace. We also have digital technology and mass social media which can shorten the time it takes to get to the mind of the masses.
So let us take MMT's insight that fiat monetary systems create new money with accounting entries and communicate how utilizing that same process at retail sale with a 50% Gift of Price to the individual and a rebate back to the merchant of same:
1) wildly benefits everyone,
2) resolves inflation and
3) serenditously enables the greatest opportunity to self actualize gratitude since meditation and prayer.
The job guarantee is an excellent policy which aligns with the new monetary paradigm of Gifting. A universal monthly dividend also aligns with it and would enable us to eliminate the payroll taxes for welfare and unemployment insurance while benefiting those who either cannot work or choose not to. Combine these two policies and the 50% Discount/Rebate at retail sale and we'll have an economy that participating in it is the greatest opportunity to self actualize gratitude since meditation and prayer. Visualize how beneficial that could be.
Completely agree. A job guarantee is a direct gift of revenue to the individual. With the beneficial deflationary effects of my Discount/Rebate policy at retail sale both the job guarantee and a universal dividend of say $1000/mo. which with the discount/rebate would give every adult $2000/mo. worth of purchasing power for their entire adult lives could also be implemented.
Implementing the new key/core idea utilizing double entry bookkeeping resolves inflation and terminates the quantity theory of money. The world changes for the better for everyone.
The problem with a guaranteed job is you are also guaranteeing that no one has to do a good job while at work. you are living in a fairytale apparently. If Giving people a job made any sense we would've been doing it for 1000 years
Your first statement is a logical non-sequitor and just confirms your "old fogey" mindset. Your second one is projection. Current orthodoxy's 6000 year old insanity is that monetary austerity is the solution. No, monetary abundance created by strategically implementing Gifting breaks that spell. Try doing it.
A 50% discount/credit of price at retail sale creates beneficial deflation for the individual and a rebate/debit of the entirety of that discount back to the merchant makes them whole on their entire price while doubling the potential demand for every one of their goods and services...which is the very definition of good economic times. Look at it.
Ok, so we imagine that a Nazi socialist fascist govt requires me at gunpoint to lower my prices by 50%. The govt then taxes the customer the 50% to give it back to me. I'm not better off and neither is the customer. There is no free lunch.
If you think about it you will realize that we are far better off than in the Stone Age not because of Nazi socialist free lunch schemes but because people invented great new products and services. If you want economic growth think about becoming a Republican supply side economist to encourage the invention or supply of new goods and services that will increase our standard of living.
No, both mathematically as you assume, and also because if you end inflation as my policies do, what reason (other than enforcing compliance with the new system) would the current rates of most taxation have to be as high as they now are???
The orthodoxy/Quantity Theory of money says that increasing the money supply will cause inflation. I just demonstrated that increasing the money supply can produce DEFLATION. Got it?
Banks and the government ctreate money with the accounting operations of equal debits and credits. I described that very process strategically implemented at the point of retail sale. Try dropping your prior assumptions. It helps you to look at and see temporal universe reality. OK?
There is actually no connection between MMT and a guaranteed job or a guaranteed welfare check or a guaranteed apartment to live in or guaranteed food. If there is a connection why don't you tell us what it is? Thanks
MMT has our money creating process correct which is a good insight. My policies APPLY MMT's money creating insight in ways that creates a paradigm change in economics and the money system.
Of course we can't tell if there's any long term strategy behind anything Trump does since he's so erratic. Most likely why Cheney endorsed Harris; she could be trusted to keep the Biden appointed neocons at State, whereas with Trump, who knows?
Given current econ beliefs, corporations must keep growing, but the planet is finite. For now, though, globally there are still resources to extract and people to exploit. ((Not that private enterprise and trade have to be this way, but that would take fair rules, a return of effective government regulations.)) Trade chaos must be upsetting for multinational corporations if they can't predict expected profits. We'll see what happens when they speak with admin. contacts and direct their sponsored members of Congress as to what they want.
There are groups who benefit from economic and political chaos. Right wing libertarians would be fine with everything falling apart because they don't want rules anyhow. As the naturally superior few, they are sure they deserve to rule and will be at the top. Like technocrats and plutocrats.
The others would be the fascists. Political and economic chaos, especially when the dominant political parties are either ineffective or don't want to change anything, mean the majority of the population feels abandoned and anxious. They may come to believe their only salvation is what Chris Hedges (and others like Kevin Phillips) have long called Christofascism.
It may be on purpose. Read the brief, reasonable arguments of Omar Ocampo at the Institute for Policy Studies (Inequality.org) reposted Apr 4. 2025 on Consortium News. Trump and the Rs perpetually calling for tax cuts in the name of prosperity for all (oh, sure) claim revenues from tariffs will render the income tax unnecessary. Getting rid of this is their real goal.
Tariff policy is supposed to be under the purview of Congress. But Congress has ceded that crucial power to Trump. It was a disastrous decision.
It's probably next to impossible for the entire Congress to intentionally manipulate the stock market. Such a conspiracy would eventually be discovered and there would be all hell to pay. But if the power to move markets lies in the hands of one man (and a tiny cabal of devout loyalists), then the temptation to get rich quick is just about impossible to resist.
We've already seen the ridiculous jump in the stock market after Trump announced his "pause" on increased tariffs (10% is still in effect) to everyone but China. Democrats suspect--who can blame them--that Trump and his cronies have cashed in by buying the dip just before announcing the "pause."
The draconian tariff on Chinese goods provides Trump with a second opportunity to make a quick buck. It's a win-win situation for Trump. In the unlikely case that he forces Xi to fold, Trump will look like the one and only Master of the Universe. And if XI doesn't surrender and markets tank, Trump can buy the dip and then announce he's rescinding the China tariff and watch markets explode for a second time.
Trump must be ruefully thinking: "Why didn't I come up with this scheme in my first administration?"
It seems to me that the problem MMT has to solve is how to substantially increase the buying power of low- and middle-income families without triggering inflation. We've seen that giving huge tax breaks to the wealthy doesn't spur inflation because the rich have a high propensity to save. But if the bottom 80% of Americans receive a financial windfall, they are going to spend it. And thus we get inflation. One solution is to institute rigid price controls that will allow the 80% to spend freely and "catch up" on the goods and services they have been forced to do without. Price controls can be repealed once the economy has found a new supply/demand equilibrium.
I suppose another possibility is to simply allow inflation to run its course without any active measures taken by the Federal Reserve. So imagine the gov't cuts a check for $100,000 to every household in America. Inflation will go wild--for the sake of argument let's say 20% the first year. So the $100,000 is suddenly only worth $80,000. As supply begins to catch up with demand and buying power decreases, inflation for year 2 might be 15%. Now that $80,000 is only worth $68,000. With each passing year inflation ratchets downward along with the value of the initial gov't payment of $100,000. And, of course, during this time a great deal of money gets spent and taxes get paid. Some households may be able to sock away a few bucks in a savings account. Others might burn through the whole $100,000 and have nothing to show for it at the end except for a higher standard of living.
Of course, the wealthy will howl. A guy with $100 million in the bank is not going to be happy if it's suddenly worth only $80 million. Perhaps this guy can be mollified by the protection of inflation adjusted bonds. This would create the Mother of All Deficits, but who cares? It's just money. Think of the enhanced living standards for 300 million Americans.
I'm just spit-balling here. If anyone else has any ideas, I'd love to hear them. But the policy of simply hoping the creation of more jobs will solve the problem seems to me to be the problem.
You're getting close to seeing the new paradigm, but you have to let go of the final conceptual vestiges of the present one and all of the theoretical falderal that accompanies it. For instance your first statement: "It seems to me that the problem MMT has to solve is how to substantially increase the buying power of low- and middle-income families without triggering inflation." assumes there is no way to effectively do that. However, a 50% discount to the consumer at retail sale DOES do that because retail sale is the terminal ending point of the entire economic/productive process where production becomes consumption and exits the economy. So the individual gets $100 of groceries for $50, a $60k EV for $30k, a $500k house for $250k and the 50% discount reduces the payment on your $250k loan by half and the same for your insurance premiums etc. etc. etc. and every merchant gets their full price with the rebate aspect of the policy. Voila! You are the greatest American president or politician EVER in the eyes of the general populace. Sure, sure. sure you have to have some additional rules and regs o stabilize the system, but thats just human reality instead of slavishly believing in "free" market theoretics that turns economic theory into a fetish that is too holy to touch or amend in any way.
You could make the Discount 52% and allow enterprise to inflate their prices by 2% per anum before taxing them 100% on any legitimate additional costs that might be able to slip through the new system's perousal, and also index inflation to any same rise in inflation. Of course you'd want to make opting into the potential doubling of demand for all their goods and services with the discount/rebate policy (YIPPEE! for the merchant), conditional upon that enterprise agreeing to not unethically attempt to destabilize the system which the current fetishistic theoretics allows, by the 100% tax rule over 2% per annum. Wouldn't it be nice if the economy and its rules was imbued with an ethic of gratitude for a gift instead of unregulated greed??? Finally, I suggest we create The Department of Innovation, Competition, Boycotting and The Individual's Bully Pulpit which would do weekly press conferences that congratulated complying businesses and pointed a severe finger at non-complying ones and then asked the public: What are you going to do Mr. and Mrs. America, buy from this ungrateful enterprise...or the ones who actually have good will toward your long suffering and neglected self?
New paradigms are beneficial conceptual inversions of both temporal universe realities and mental inversions as well. That in fact is how you know its an actual paradigm change. So lets get to it!
thanks for the update ! what i cannot seem to understand is why tax-cuts aren't viewed as spending ? discussions with ChatGPT and Grok, (elon'sAI) have generated data showing how tax-cuts, bailouts and 'defense' (wars, bombs, aftermath healthcare etc) have increased the national debt, without boosting GDP while increasing Inflation more than MMT type spending . How can we demonstrate that MMT type spending on infrastructure, research, FJG's, public health and security, etc has been historically more effective in terms of increasing GDP and reducing DEBT and increasing capacity / "growth" by looking at data over all the historical administrations ?
I sent Tanvi Ratna a Simulated Discussion: Tanvi Ratna and Stephanie Kelton on Price Stickiness, Historical Parallels, and Rhetorical Risks (April 5, 2025)
She thought it was fun, but said "world is quite different today"
I agree that world is quite different, but this idea that government spending for the people will make them immoral and weak never seems to change. From Hoover to Reagan, Bushes and Trump it's all the same. Must be rooted in Calvinism. Tax Subsidized Churches and Non-profits need to care for the humble after handouts to corps and wealthy. Even though it's possible that Supply-Side economics lost them their jobs and homes. Handouts only available for corporations and wealthy, who these presidents believe are responsible for all the growth => TRICKLE DOWN somehow the solution for moral decay!!
Hoover:
"The basis of successful relief in national distress is to mobilize and organize the infinite number of agencies of self-help in the community. That has been the American way."
"The Federal Government must not encroach upon the sacred obligation of the individual to care for himself and his neighbor… We must not undermine the morale of our people by destroying their sense of responsibility."
"Many persons left their jobs for the more profitable one of selling apples… The poor were hit hardest, but even they were sustained by the American spirit of neighborly help."
(The Memoirs of Herbert Hoover: The Great Depression, 1929-1941)
Reagan:
"We’ve gone astray from first principles. We’ve lost sight of the rule that individual freedom and ingenuity are at the very core of everything that we’ve accomplished. Government’s first duty is to protect the people, not run their lives."
(Speech at the National Conference of the Building and Construction Trades, March 30, 1981)
"I know that there are people in this country who are hurting… But we must not turn to government to solve our problems. The answer lies in the hearts of the American people, in our ability to pull together."
(Remarks at a fundraising event, October 1982)
Bush Sr:
"I know times are tough for a lot of Americans… We’re working to get this economy moving again, and that means keeping taxes low and government out of the way."
(Speech in Toledo, Ohio, September 1992)
Bush Jr:
"The best way to help the poor is to create jobs, and the best way to create jobs is to cut taxes and reduce regulation… Prosperity will lift those who are struggling."
(Radio address, June 2001, defending EGTRRA tax cuts)
"I know millions of Americans are hurting right now… We’re taking action to stabilize markets, but the ultimate solution is growth, and that comes from keeping money in people’s pockets."
(Remarks on financial rescue plan, October 2008)
Trump...continues with the shaming of 40%
"Our tax cuts will put money back in the hands of American workers and businesses, and they’ll hire more people… Everybody’s going to benefit, believe me."
(Speech in St. Louis, Missouri, November 2017, on TCJA)
"We’re bringing jobs back for people who’ve been left behind… My policies are about growth, not handouts."
(Remarks at CPAC, February 2018)
Moore: “What is irrefutable is that marriage with a devoted husband and wife in the home is a far better social program than food stamps, Medicaid, public housing or even all of them combined.” (Washington Times op-ed, 2014)
Interesting, in 2025 we now have "populist" supply-side preachers, like Bessent,Lutnick,Navarro, who have to go more carefully on the shaming of workers. So now instead, they must shame other countries.
"The Federal Government must not encroach upon the sacred obligation of the individual to care for himself and his neighbor… We must not undermine the morale of our people by destroying their sense of responsibility."
(Hoover Speech vetoing relief legislation, July 1932)
"I know that there are people in this country who are hurting… But we must not turn to government to solve our problems. The answer lies in the hearts of the American people, in our ability to pull together."
Unlike Hoover, Reagan, Bush Jr and Sr, in 2025 we now have "populist" supply-side preachers, like Bessent,Lutnick,Navarro, Moore who have to go much more carefully on the moral shaming of the humble. As those humble folks, comprise their base of support. So they have turned to shaming other countries,to direct humble eyes away from expensive tax-cut spending, bailout spending, defense spending... And maybe Trump will give the humble a patriotic carrot for christmas, stolen from a 60 cents/hour Bangladeshi worker, but the rest of the carrots, as we can plainly see will be quietly disbursed to less humble pockets, according to the false prophet, #TrickleDown
(Reagan Remarks at a fundraising event, October 1982)
"The best way to help the poor is to create jobs, and the best way to create jobs is to cut taxes and reduce regulation… Prosperity will lift those who are struggling."
(Bush Sr Radio address, June 2001, defending EGTRRA tax cuts)
"I know times are tough for a lot of Americans… We’re working to get this economy moving again, and that means keeping taxes low and government out of the way."
(Bush Jr Speech in Toledo, Ohio, September 1992)
Bush’s tax cuts and bank bailouts prioritize systemic recovery, assuming the poor benefit later. Debt-to-GDP soared (55% to 76%, 2001-2009), partly from cuts ($1.5 trillion, CBPP)
What isn't misguided when it comes to felon tRump? He pretends to care about America. He charms and manipulates certain kinds of people into believing his lies (30,000+ in 1st term). But behind this facade of "Making America Great" is a sinister, sociopathic obsession with making himself look good with all his money and power he can show off to the world. He gleefully abuses his power as President to make himself even more so with his "executive orders" like a tyrant dictating to his subjects. His authoritarian instincts are now manifest in his desire to kill democracy and make himself "dictator". He hired Musk, another narcissist, to do his dirty work dismantling our federal agencies under the guise of ridding them of alleged waste, fraud and abuse. It will make it easier for both of them to grift more off of gov't.
Now he is hell bent on "making the economy great" by inflicting a little 'temporary' pain with the tariffs he imposes universally....even to penguins. He claims these tariffs will make a lot of money for America. Tariffs weren't really his idea (surprise, surprise), but Peter Navarro, his econ advisor from 1st term. He is another con man who made up a fictitious "expert" economist that he could source for his tariff ideas on trade deficits. Ideas he whispered in tRumps ear and words that were magic to tRump so he could use them to retaliate on China who he claims are ripping us off.
The tRump Regime is full of corruption, sociopaths, narcissists incompetents, NeoNazi/fascist ideologues and just plain stupid people.
We must impeach him and prosecute Musk/Doge for their crimes.
Happy to see you, Prof Kelton, on MSNBC cable news media with Chris Hayes. Keep it up.
The present and increasingly rigid intellectual paradigm is Science Only. Science is wonderful and necessary, but its reductionist methodology is in logical and conceptual opposition to the integrative, inclusive and resolving phenomenon of conceptual/paradigmatic analysis. Hence Science Only is actually the equivalent of Ptolemaic cosmology where you can fiddle around with epicycle type fixes and yet never get to the base of the key problem (the current monetary paradigm) and find the new concept's optimal applications...that will change the character and realities of the entire system you're analyzing.
The key word is reckless. From the tariffs, to the massive tax cuts and now the spending to boot it seems like its a giant ball of recklessness without any clear direction for our economy. I also agree 100% that neither party is looking at this from an MMT standpoint with regards to mitigating inflation risk and real resources. But then again, in the world of Trump, the only way he can slow down inflation and get low rates is to engineer a recession which as we all know will be catastrophic for the low income and poor in this country.
For the record, if we did a better job of realizing the US gov being the issuer of dollars, we can start to make the necessary investments to produce a solid manufacturing base here at home instead of thinking tariffs will do the trick.
The way to prevent inflation and double every individual's purchasing power is to implement a 50% Discount at retail sale and then have the government or the FED rebate every cent of that discount back to the merchant so they are made whole on their entire price and all you have to do to accomplish that is to recognize that MMT correctly states that our new money is created by double entry bookkeeping. The policy is simply an application of MMT insight. Thats why I'm puzzled she doesn't respond by saying: "Oh, yes! Lets communicate that to everyone on social media and win the day!
How is this not inflationary? If an $80K luxury car can be purchased for $40K by consumers or a $20 ribeye can be bought for $10, demand will quickly outpace supply. What am I missing?
I go with Mosler's department store model. The government should step in and spend alongside private consumers to keep those providing products and services running at a capacity below inflationary rates.
What you are missing is 1) Look at what the consumer pays ($40k for an $80k auto = temporal universe FACT of beneficial DEFLATION) 2) Commercial agent gets their entire price of $80k with the rebate aspect of the policy 3) and probably most importantly, you miss the fact that the current bulk of "free" market theoretics is a delusional misnomer for the actual reality which is a chaotic theoretics that does not enable ACTUAL control...because the current monetary paradigm for the creation and distribution of new money is DEBT ONLY (a dominating MONOPOLY paradigm concept exactly like Salvation Via Roman Catholic Sacraments ONLY was before The Reformation) when strategically integrating Monetary Gifting into the DEBT ONLY system with the 50% Discount/Rebate policy at retail sale creates the realities of 1 and 2 above which resolve inflation and brings a more prosperous and stable economic system.
The chaos of Trump is probably partly his spiteful idea of fun and partly the historical psychosis of thinking that doing the same thing that didn't resolve over and over...is going to result in a resolution. It IS true that the chaos of identity crisis is a requisite for breaking out of the orthodox mindset and being willing to actually look at alternatives. Thats the mental phenomenon that always accompanies genuine change and is particularly difficult with new paradigms...because it requires embracing conceptual illogic which is an historical fact of accomplished paradigm changes but is rare in an era of scientific intellectual inquiry ONLY.
So it takes bravery, open mindedness, creativity and a higher toleration of ambiguity. However, the most important thing needed to break through to these desired traits is to have a program whose benefits are mentally demonstrable to the general populace. We also have digital technology and mass social media which can shorten the time it takes to get to the mind of the masses.
So let us take MMT's insight that fiat monetary systems create new money with accounting entries and communicate how utilizing that same process at retail sale with a 50% Gift of Price to the individual and a rebate back to the merchant of same:
1) wildly benefits everyone,
2) resolves inflation and
3) serenditously enables the greatest opportunity to self actualize gratitude since meditation and prayer.
The job guarantee is an excellent policy which aligns with the new monetary paradigm of Gifting. A universal monthly dividend also aligns with it and would enable us to eliminate the payroll taxes for welfare and unemployment insurance while benefiting those who either cannot work or choose not to. Combine these two policies and the 50% Discount/Rebate at retail sale and we'll have an economy that participating in it is the greatest opportunity to self actualize gratitude since meditation and prayer. Visualize how beneficial that could be.
Completely agree. A job guarantee is a direct gift of revenue to the individual. With the beneficial deflationary effects of my Discount/Rebate policy at retail sale both the job guarantee and a universal dividend of say $1000/mo. which with the discount/rebate would give every adult $2000/mo. worth of purchasing power for their entire adult lives could also be implemented.
Implementing the new key/core idea utilizing double entry bookkeeping resolves inflation and terminates the quantity theory of money. The world changes for the better for everyone.
The problem with a guaranteed job is you are also guaranteeing that no one has to do a good job while at work. you are living in a fairytale apparently. If Giving people a job made any sense we would've been doing it for 1000 years
Your first statement is a logical non-sequitor and just confirms your "old fogey" mindset. Your second one is projection. Current orthodoxy's 6000 year old insanity is that monetary austerity is the solution. No, monetary abundance created by strategically implementing Gifting breaks that spell. Try doing it.
current orthodoxy whether you're Milton Friedman or Stephanie Kelton is that 0-2% inflation is a good target. Do you understand?
Thats a very nice palliative idea…that won’t work…because it assumes free market theory is possible instead of it being a misnomer for chaos
what chaos?? you think inflation is less chaos??
can you tell us what monetary abundance is?? what gifting breaks are? What it is a solution to?
I already did all of that.
please do again as simply as you can in good english
u
still afraid? How will you learn if you dont try
Double entry bookkeeping resolves inflation how???
A 50% discount/credit of price at retail sale creates beneficial deflation for the individual and a rebate/debit of the entirety of that discount back to the merchant makes them whole on their entire price while doubling the potential demand for every one of their goods and services...which is the very definition of good economic times. Look at it.
Ok, so we imagine that a Nazi socialist fascist govt requires me at gunpoint to lower my prices by 50%. The govt then taxes the customer the 50% to give it back to me. I'm not better off and neither is the customer. There is no free lunch.
If you think about it you will realize that we are far better off than in the Stone Age not because of Nazi socialist free lunch schemes but because people invented great new products and services. If you want economic growth think about becoming a Republican supply side economist to encourage the invention or supply of new goods and services that will increase our standard of living.
A complete distortion of the actual process and realities created by the accounting process I described. Sheeesh!
if it is a complete distortion you have to think of a reason to say that and then try to present the reason here in writing.
oh, FYI it does not double demand because after taxes the customer has the same amount of money as before your free lunch scheme.
No, both mathematically as you assume, and also because if you end inflation as my policies do, what reason (other than enforcing compliance with the new system) would the current rates of most taxation have to be as high as they now are???
y
it terminates the quantity theory of money how????
The orthodoxy/Quantity Theory of money says that increasing the money supply will cause inflation. I just demonstrated that increasing the money supply can produce DEFLATION. Got it?
Actually you said nothing whatsoever about changing the money supply. If you did quote yourself.
Banks and the government ctreate money with the accounting operations of equal debits and credits. I described that very process strategically implemented at the point of retail sale. Try dropping your prior assumptions. It helps you to look at and see temporal universe reality. OK?
pure gibberish. if you have any idea what that means why not share it with us in good english
There is actually no connection between MMT and a guaranteed job or a guaranteed welfare check or a guaranteed apartment to live in or guaranteed food. If there is a connection why don't you tell us what it is? Thanks
MMT has our money creating process correct which is a good insight. My policies APPLY MMT's money creating insight in ways that creates a paradigm change in economics and the money system.
if MMT it is a good insight tell us the reason.
your policy would require a Nazi socialist govt and would not change anyones standard of living in the best case scenario .
Of course we can't tell if there's any long term strategy behind anything Trump does since he's so erratic. Most likely why Cheney endorsed Harris; she could be trusted to keep the Biden appointed neocons at State, whereas with Trump, who knows?
Given current econ beliefs, corporations must keep growing, but the planet is finite. For now, though, globally there are still resources to extract and people to exploit. ((Not that private enterprise and trade have to be this way, but that would take fair rules, a return of effective government regulations.)) Trade chaos must be upsetting for multinational corporations if they can't predict expected profits. We'll see what happens when they speak with admin. contacts and direct their sponsored members of Congress as to what they want.
There are groups who benefit from economic and political chaos. Right wing libertarians would be fine with everything falling apart because they don't want rules anyhow. As the naturally superior few, they are sure they deserve to rule and will be at the top. Like technocrats and plutocrats.
The others would be the fascists. Political and economic chaos, especially when the dominant political parties are either ineffective or don't want to change anything, mean the majority of the population feels abandoned and anxious. They may come to believe their only salvation is what Chris Hedges (and others like Kevin Phillips) have long called Christofascism.
It may be on purpose. Read the brief, reasonable arguments of Omar Ocampo at the Institute for Policy Studies (Inequality.org) reposted Apr 4. 2025 on Consortium News. Trump and the Rs perpetually calling for tax cuts in the name of prosperity for all (oh, sure) claim revenues from tariffs will render the income tax unnecessary. Getting rid of this is their real goal.
Tariff policy is supposed to be under the purview of Congress. But Congress has ceded that crucial power to Trump. It was a disastrous decision.
It's probably next to impossible for the entire Congress to intentionally manipulate the stock market. Such a conspiracy would eventually be discovered and there would be all hell to pay. But if the power to move markets lies in the hands of one man (and a tiny cabal of devout loyalists), then the temptation to get rich quick is just about impossible to resist.
We've already seen the ridiculous jump in the stock market after Trump announced his "pause" on increased tariffs (10% is still in effect) to everyone but China. Democrats suspect--who can blame them--that Trump and his cronies have cashed in by buying the dip just before announcing the "pause."
The draconian tariff on Chinese goods provides Trump with a second opportunity to make a quick buck. It's a win-win situation for Trump. In the unlikely case that he forces Xi to fold, Trump will look like the one and only Master of the Universe. And if XI doesn't surrender and markets tank, Trump can buy the dip and then announce he's rescinding the China tariff and watch markets explode for a second time.
Trump must be ruefully thinking: "Why didn't I come up with this scheme in my first administration?"
It seems to me that the problem MMT has to solve is how to substantially increase the buying power of low- and middle-income families without triggering inflation. We've seen that giving huge tax breaks to the wealthy doesn't spur inflation because the rich have a high propensity to save. But if the bottom 80% of Americans receive a financial windfall, they are going to spend it. And thus we get inflation. One solution is to institute rigid price controls that will allow the 80% to spend freely and "catch up" on the goods and services they have been forced to do without. Price controls can be repealed once the economy has found a new supply/demand equilibrium.
I suppose another possibility is to simply allow inflation to run its course without any active measures taken by the Federal Reserve. So imagine the gov't cuts a check for $100,000 to every household in America. Inflation will go wild--for the sake of argument let's say 20% the first year. So the $100,000 is suddenly only worth $80,000. As supply begins to catch up with demand and buying power decreases, inflation for year 2 might be 15%. Now that $80,000 is only worth $68,000. With each passing year inflation ratchets downward along with the value of the initial gov't payment of $100,000. And, of course, during this time a great deal of money gets spent and taxes get paid. Some households may be able to sock away a few bucks in a savings account. Others might burn through the whole $100,000 and have nothing to show for it at the end except for a higher standard of living.
Of course, the wealthy will howl. A guy with $100 million in the bank is not going to be happy if it's suddenly worth only $80 million. Perhaps this guy can be mollified by the protection of inflation adjusted bonds. This would create the Mother of All Deficits, but who cares? It's just money. Think of the enhanced living standards for 300 million Americans.
I'm just spit-balling here. If anyone else has any ideas, I'd love to hear them. But the policy of simply hoping the creation of more jobs will solve the problem seems to me to be the problem.
You're getting close to seeing the new paradigm, but you have to let go of the final conceptual vestiges of the present one and all of the theoretical falderal that accompanies it. For instance your first statement: "It seems to me that the problem MMT has to solve is how to substantially increase the buying power of low- and middle-income families without triggering inflation." assumes there is no way to effectively do that. However, a 50% discount to the consumer at retail sale DOES do that because retail sale is the terminal ending point of the entire economic/productive process where production becomes consumption and exits the economy. So the individual gets $100 of groceries for $50, a $60k EV for $30k, a $500k house for $250k and the 50% discount reduces the payment on your $250k loan by half and the same for your insurance premiums etc. etc. etc. and every merchant gets their full price with the rebate aspect of the policy. Voila! You are the greatest American president or politician EVER in the eyes of the general populace. Sure, sure. sure you have to have some additional rules and regs o stabilize the system, but thats just human reality instead of slavishly believing in "free" market theoretics that turns economic theory into a fetish that is too holy to touch or amend in any way.
You could make the Discount 52% and allow enterprise to inflate their prices by 2% per anum before taxing them 100% on any legitimate additional costs that might be able to slip through the new system's perousal, and also index inflation to any same rise in inflation. Of course you'd want to make opting into the potential doubling of demand for all their goods and services with the discount/rebate policy (YIPPEE! for the merchant), conditional upon that enterprise agreeing to not unethically attempt to destabilize the system which the current fetishistic theoretics allows, by the 100% tax rule over 2% per annum. Wouldn't it be nice if the economy and its rules was imbued with an ethic of gratitude for a gift instead of unregulated greed??? Finally, I suggest we create The Department of Innovation, Competition, Boycotting and The Individual's Bully Pulpit which would do weekly press conferences that congratulated complying businesses and pointed a severe finger at non-complying ones and then asked the public: What are you going to do Mr. and Mrs. America, buy from this ungrateful enterprise...or the ones who actually have good will toward your long suffering and neglected self?
New paradigms are beneficial conceptual inversions of both temporal universe realities and mental inversions as well. That in fact is how you know its an actual paradigm change. So lets get to it!
If the government invests in the productive capacity of the economy, the increase in purchasing power is offset. That's my understanding, at least.
Luckily, there are many things that both increase purchasing power and increase productivity. Funding healthcare and education are prime examples.
thanks for the update ! what i cannot seem to understand is why tax-cuts aren't viewed as spending ? discussions with ChatGPT and Grok, (elon'sAI) have generated data showing how tax-cuts, bailouts and 'defense' (wars, bombs, aftermath healthcare etc) have increased the national debt, without boosting GDP while increasing Inflation more than MMT type spending . How can we demonstrate that MMT type spending on infrastructure, research, FJG's, public health and security, etc has been historically more effective in terms of increasing GDP and reducing DEBT and increasing capacity / "growth" by looking at data over all the historical administrations ?
I sent Tanvi Ratna a Simulated Discussion: Tanvi Ratna and Stephanie Kelton on Price Stickiness, Historical Parallels, and Rhetorical Risks (April 5, 2025)
She thought it was fun, but said "world is quite different today"
I agree that world is quite different, but this idea that government spending for the people will make them immoral and weak never seems to change. From Hoover to Reagan, Bushes and Trump it's all the same. Must be rooted in Calvinism. Tax Subsidized Churches and Non-profits need to care for the humble after handouts to corps and wealthy. Even though it's possible that Supply-Side economics lost them their jobs and homes. Handouts only available for corporations and wealthy, who these presidents believe are responsible for all the growth => TRICKLE DOWN somehow the solution for moral decay!!
Hoover:
"The basis of successful relief in national distress is to mobilize and organize the infinite number of agencies of self-help in the community. That has been the American way."
"The Federal Government must not encroach upon the sacred obligation of the individual to care for himself and his neighbor… We must not undermine the morale of our people by destroying their sense of responsibility."
"Many persons left their jobs for the more profitable one of selling apples… The poor were hit hardest, but even they were sustained by the American spirit of neighborly help."
(The Memoirs of Herbert Hoover: The Great Depression, 1929-1941)
Reagan:
"We’ve gone astray from first principles. We’ve lost sight of the rule that individual freedom and ingenuity are at the very core of everything that we’ve accomplished. Government’s first duty is to protect the people, not run their lives."
(Speech at the National Conference of the Building and Construction Trades, March 30, 1981)
"I know that there are people in this country who are hurting… But we must not turn to government to solve our problems. The answer lies in the hearts of the American people, in our ability to pull together."
(Remarks at a fundraising event, October 1982)
Bush Sr:
"I know times are tough for a lot of Americans… We’re working to get this economy moving again, and that means keeping taxes low and government out of the way."
(Speech in Toledo, Ohio, September 1992)
Bush Jr:
"The best way to help the poor is to create jobs, and the best way to create jobs is to cut taxes and reduce regulation… Prosperity will lift those who are struggling."
(Radio address, June 2001, defending EGTRRA tax cuts)
"I know millions of Americans are hurting right now… We’re taking action to stabilize markets, but the ultimate solution is growth, and that comes from keeping money in people’s pockets."
(Remarks on financial rescue plan, October 2008)
Trump...continues with the shaming of 40%
"Our tax cuts will put money back in the hands of American workers and businesses, and they’ll hire more people… Everybody’s going to benefit, believe me."
(Speech in St. Louis, Missouri, November 2017, on TCJA)
"We’re bringing jobs back for people who’ve been left behind… My policies are about growth, not handouts."
(Remarks at CPAC, February 2018)
Moore: “What is irrefutable is that marriage with a devoted husband and wife in the home is a far better social program than food stamps, Medicaid, public housing or even all of them combined.” (Washington Times op-ed, 2014)
Interesting, in 2025 we now have "populist" supply-side preachers, like Bessent,Lutnick,Navarro, who have to go more carefully on the shaming of workers. So now instead, they must shame other countries.
"The Federal Government must not encroach upon the sacred obligation of the individual to care for himself and his neighbor… We must not undermine the morale of our people by destroying their sense of responsibility."
(Hoover Speech vetoing relief legislation, July 1932)
"I know that there are people in this country who are hurting… But we must not turn to government to solve our problems. The answer lies in the hearts of the American people, in our ability to pull together."
Unlike Hoover, Reagan, Bush Jr and Sr, in 2025 we now have "populist" supply-side preachers, like Bessent,Lutnick,Navarro, Moore who have to go much more carefully on the moral shaming of the humble. As those humble folks, comprise their base of support. So they have turned to shaming other countries,to direct humble eyes away from expensive tax-cut spending, bailout spending, defense spending... And maybe Trump will give the humble a patriotic carrot for christmas, stolen from a 60 cents/hour Bangladeshi worker, but the rest of the carrots, as we can plainly see will be quietly disbursed to less humble pockets, according to the false prophet, #TrickleDown
(Reagan Remarks at a fundraising event, October 1982)
"The best way to help the poor is to create jobs, and the best way to create jobs is to cut taxes and reduce regulation… Prosperity will lift those who are struggling."
(Bush Sr Radio address, June 2001, defending EGTRRA tax cuts)
"I know times are tough for a lot of Americans… We’re working to get this economy moving again, and that means keeping taxes low and government out of the way."
(Bush Jr Speech in Toledo, Ohio, September 1992)
Bush’s tax cuts and bank bailouts prioritize systemic recovery, assuming the poor benefit later. Debt-to-GDP soared (55% to 76%, 2001-2009), partly from cuts ($1.5 trillion, CBPP)
Can you tell us what your point is Kathleen?
What isn't misguided when it comes to felon tRump? He pretends to care about America. He charms and manipulates certain kinds of people into believing his lies (30,000+ in 1st term). But behind this facade of "Making America Great" is a sinister, sociopathic obsession with making himself look good with all his money and power he can show off to the world. He gleefully abuses his power as President to make himself even more so with his "executive orders" like a tyrant dictating to his subjects. His authoritarian instincts are now manifest in his desire to kill democracy and make himself "dictator". He hired Musk, another narcissist, to do his dirty work dismantling our federal agencies under the guise of ridding them of alleged waste, fraud and abuse. It will make it easier for both of them to grift more off of gov't.
Now he is hell bent on "making the economy great" by inflicting a little 'temporary' pain with the tariffs he imposes universally....even to penguins. He claims these tariffs will make a lot of money for America. Tariffs weren't really his idea (surprise, surprise), but Peter Navarro, his econ advisor from 1st term. He is another con man who made up a fictitious "expert" economist that he could source for his tariff ideas on trade deficits. Ideas he whispered in tRumps ear and words that were magic to tRump so he could use them to retaliate on China who he claims are ripping us off.
The tRump Regime is full of corruption, sociopaths, narcissists incompetents, NeoNazi/fascist ideologues and just plain stupid people.
We must impeach him and prosecute Musk/Doge for their crimes.
Happy to see you, Prof Kelton, on MSNBC cable news media with Chris Hayes. Keep it up.
Can you give us a specific policy with which you disagree?
The present and increasingly rigid intellectual paradigm is Science Only. Science is wonderful and necessary, but its reductionist methodology is in logical and conceptual opposition to the integrative, inclusive and resolving phenomenon of conceptual/paradigmatic analysis. Hence Science Only is actually the equivalent of Ptolemaic cosmology where you can fiddle around with epicycle type fixes and yet never get to the base of the key problem (the current monetary paradigm) and find the new concept's optimal applications...that will change the character and realities of the entire system you're analyzing.
The key word is reckless. From the tariffs, to the massive tax cuts and now the spending to boot it seems like its a giant ball of recklessness without any clear direction for our economy. I also agree 100% that neither party is looking at this from an MMT standpoint with regards to mitigating inflation risk and real resources. But then again, in the world of Trump, the only way he can slow down inflation and get low rates is to engineer a recession which as we all know will be catastrophic for the low income and poor in this country.
For the record, if we did a better job of realizing the US gov being the issuer of dollars, we can start to make the necessary investments to produce a solid manufacturing base here at home instead of thinking tariffs will do the trick.
The way to prevent inflation and double every individual's purchasing power is to implement a 50% Discount at retail sale and then have the government or the FED rebate every cent of that discount back to the merchant so they are made whole on their entire price and all you have to do to accomplish that is to recognize that MMT correctly states that our new money is created by double entry bookkeeping. The policy is simply an application of MMT insight. Thats why I'm puzzled she doesn't respond by saying: "Oh, yes! Lets communicate that to everyone on social media and win the day!
How is this not inflationary? If an $80K luxury car can be purchased for $40K by consumers or a $20 ribeye can be bought for $10, demand will quickly outpace supply. What am I missing?
I go with Mosler's department store model. The government should step in and spend alongside private consumers to keep those providing products and services running at a capacity below inflationary rates.
What you are missing is 1) Look at what the consumer pays ($40k for an $80k auto = temporal universe FACT of beneficial DEFLATION) 2) Commercial agent gets their entire price of $80k with the rebate aspect of the policy 3) and probably most importantly, you miss the fact that the current bulk of "free" market theoretics is a delusional misnomer for the actual reality which is a chaotic theoretics that does not enable ACTUAL control...because the current monetary paradigm for the creation and distribution of new money is DEBT ONLY (a dominating MONOPOLY paradigm concept exactly like Salvation Via Roman Catholic Sacraments ONLY was before The Reformation) when strategically integrating Monetary Gifting into the DEBT ONLY system with the 50% Discount/Rebate policy at retail sale creates the realities of 1 and 2 above which resolve inflation and brings a more prosperous and stable economic system.
Stephanie: Can you do something about Ted?