Sajid - The limit on government spending is determined by the availability of real resources for sale in its currency. If there are no unused resources available, such as unemployed workers or unused industrial capacity, then further government spending (or further private sector spending) can cause inflation (not hyperinflation). In o…
Sajid - The limit on government spending is determined by the availability of real resources for sale in its currency. If there are no unused resources available, such as unemployed workers or unused industrial capacity, then further government spending (or further private sector spending) can cause inflation (not hyperinflation). In other words, when spending exceeds the capacity of the economy to provide real resources you will get some inflation.
Our recent inflation, which is falling monthly now, was caused by a lack of resources due to the supply chain problems due to COVID. Now that those problems have mostly been resolved, inflation is falling. There were other factors, of course, but that was a major one.
Another major cause of current inflation has been major companies raising their prices far more than the increased cost of their inputs, which has brought them enormous profits on the backs of the poor and working class who can barely afford food and fuel and their other necessities. This factor also seems to be moderating.
The value of a given giant pile of money is not affected by government spending per se. Money doesn't follow the classic supply/demand curve like physical assets do.
"Sajid - The limit on government spending is determined by the availability of real resources for sale in its currency. If there are no unused resources available, such as unemployed workers or unused industrial capacity, then further government spending (or further private sector spending) can cause inflation (not hyperinflation)."
What is a good measure for whether resources are being optimally utilized? Perhaps Congress determines that America has spare industrial capacity for infrastructure and builds a giant and expensive bridge across the Gulf of Mexico from Houston to The Everglades. Such a heavy drain on America's resources would clearly make everything else more expensive.
Do you trust Congress with the mandate to print and spend as much money as they deem necessary based on what they determine America's industrial capacity to be?
I would also like to have this trust, but in order to gain it, I would like to know who determines America's industrial capacity, how they determine it, and how they determine how to optimally use that capacity to make the future a better place.
Is there one person doing this? Does the free-market of competing political interests somehow magically work out in America's favor and we must just hope it always will?
I am sorry, but I would still like a bit more information about these topics if you have some.
The best measure of excess capacity within an economy is involuntarily unemployment. There are people willing and able to perform paid work for things that need doing yet can find no takers. Another key indicator that should leap out at you is crumbling infrastructure. China has provided us with a fantastic example of how a nation can marshal its human resources in such a way that lifts hundreds of millions out of poverty and develops its infrastructure via massive investment facilitated by government spending.
The comparison with China does not work here. A centralized plan works when you are confident that the future you are trying to achieve is the correct one, which works well when you are following. America, for better and for worse, is not following, so it could totally spend billions of dollars on suboptimal infrastructure. Moreover, just because there are people willing to work does not mean that they will automatically work in a way that benefits society and themselves. What if the military hires them to invade Canada?
I feel that there needs to be a vision for the future, a metric to determine what that vision will cost, and a way to estimate and ultimately measure what was gained from that vision. Mere GDP growth means little if it is a result of inflation.
Giving government a blank check means that they could crowd out private spending and completely dominate the economy until they crash it. I know this scenario is unlikely, but I would still like to know whether it is happening before it happens, and that means that we need some measures of whether government is spending too much and whether the money is well-spent.
Sajid - We don't do the vision thing in the US. It might get in the way of profit-making at all costs. Besides, no one, not even the Chinese can be sure that any particular vision will come to pass in the future. Too many unknowns. Nevertheless, we could do better.
Suboptimal infrastructure: Most projects are granted to the lowest bidder. Unless they are cost-plus contracts rather than fixed price, the contractor will cut corners and suboptimal will be the inevitable result.
Employers determine whether or not the work benefits society, not the workers. Your "what if" isn't relevant. The military doesn't make invasion decisions, politicians do.
Government spending does not crowd out private spending. That's an economic concept that has been shown to be false, because it's based on incorrect assumptions.
As with any economy there are no perfect measures and they are all estimates.
One good measure is whether or not we are at full employment, defined by MMT as everyone who is able and willing to work has a job paying a socially-inclusive wage. See Bill Mitchell: http://bilbo.economicoutlook.net/blog/
Statistically this means getting the unemployment and underemployment rates as close to zero as possible. According to Mitchell, that's about 1-2%, which is made up of people switching jobs, etc. That irreducible part is frictional unemployment.
The participation rate is also important. This is defined as the percentage of the noninstitutionalized population over the age of 16 who are employed or looking for work. It can be increased by finding jobs for "discouraged workers" who have stopped looking for work because they can't find anything suitable.
Your bridge across the Gulf reminds me of one proposed by a Congressman from Alaska who proposed a bridge from the mainland to a small island that was called the "Bridge to Nowhere". It never passed Congress, fortunately.
I don't trust Congress at all, but they can already spend whatever they deem necessary. However, they won't spend to increase industrial capacity except for weapons makers as they still believe that deficits are bad and need to be reduced In addition, it would take industrial planning, i.e., targeting spending to specific industries and companies. They won't do that (again other than with weapons) because that's what the Soviet Union did and Russia does and that's anathema to our government. Bad commies and all that, ya know.
Industrial capacity is determined by the Federal Reserve which reports monthly on Industrial Production and Capacity Utilization.
There are plenty of true believers who think that the free market will indeed magically bring about the best result. As we have seen over the past 40+ years, that's a myth. The most productive era in the past 100 years was the post-war period up until President Carter when top individual tax rates were 74-91% and many industries were heavily regulated. Carter started the deregulation movement by deregulating the airlines and you can see the result in the recent Southwest debacle over the holidays.
"I don't trust Congress at all, but they can already spend whatever they deem necessary. "
Have you re-written the Constitutions APPROPRIATIONS clause?
Actually, NO, Congress cannot spend unless it is authorized (IN THE BUDGET) for both spending and appropriation - which means "money" (from taxes and debt-proceeds) already in the Treasury account.
Joe - Congress is the body that authorizes both spending and appropriation. Your statement that they can't spend what they deem necessary doesn't make sense.
It has authorized the spending, AND it has authorized the appropriation of the FUNDS IN THE TREASURY - not already appropriated.
Do you read the Appropriations Bills?
They conform to the same Constitutional limitations.
Were there no Debt-Ceiling, no problem.
BUT, more important, were Congress to grant itself the money-creation powers that the Constitution permits ( see Greenbacks), then the smartest kids in the room would not be advocating for more government BORROWING - just because their banker-guru says so.
When necessary, like now, CHANGE THE LAW. The whole "problem" with both the national "debt" and the biggest economic problem since forever, inflation, is solved by integrating the new paradigm of Gifting into the Debt Only system.
That is accomplished by 1) the government/treasury simply creating and distributing the money to fund the government with MONEY, NOT presto-change-o Treasuries...so everyone thinks its actually a debt when its really just money created and distributed and 2) the government/monetary authority rebates the 50% discount that retailers grant to consumers which accomplishes a) beneficial macro-economic deflation for everyone (you can buy $100 worth of sweet potatos for $50 and Buy a $60k Tesla for $30k...JUST DO THE MATH ON EVERY PURCHASE THAT EVERYONE MAKES) and b) the rebate aspect of the policy makes the retailer whole on their overheads and profit margins.
If you're not analyzing and looking at things on the paradigmatic level you're just blabbering around with a shit load of complexities that the paradigmatic level resolves and hence you become an erudite dunce.
If you scroll down you will see my apology for misunderstanding that you do indeed comprehend the paradigm of Debt Only so please lets just proceed.
I'm familiar with Kucinich's proposal and I'm okay with what it suggests. Its problem is in what it doesn't suggest, namely an immediate, direct to the individual set of policies that simultaneously resolves the economic AND THE POLITICAL PROBLEMS facing us. Paradigm changes don't occur all the time, but a linked multi-systemic change is the signature of a mega-paradigm change of which there have probably only been three in the entire history of the human species...so lets go mega because why not?
Its wonderful to get such participation on this subject and its core problem (the current monetary paradigm and lack of consciousness of the necessity of paradigmatic analysis). I really hope that you Stephanie will offer your input.
The government has no need to "borrow", the requirement that Treasury securities be issued in an amount equal to the difference between spending and tax revenue is a vestige of the days when we were on a gold standard that should repealed, as should the debt limit.
Correct. If you just create money and distribute it strategically (a universal dividend to every adult and with a 50% Discount/Rebate policy at retail sale) you solve all of the problems and ignorance of the current paradigm of Debt Only.
Steve - The problem with a UBI or universal dividend is that while it provides more money for people to spend, it does nothing to provide the additional real resources to be purchased by that additional money. As a result, it can be inflationary. I think Bill Mitchell has written the best analysis on this: http://bilbo.economicoutlook.net/blog/?p=44133
John, You're correct that we need to coordinate the productiove system, but 1) a 50% discount at retail sale is going to implement beneficial deflation because we've never had y/oy inflation of 50% let alone moment to moment 50% inflation, 2) a doubling of purchasing power doesn't ipso facto translate into a doubling of consumption/economic through put because not everyone is going to eat twice as much or buy twice as many pairs of shoes as they did before the 50% discount and 3) once a mass movement communicates the obvious and tremendous benefits of the new paradigm's policies that awareness and its logical political effects will be perceived by the decision makers of savvy business and additional productive capacity will become the reality relatively quickly.
Seems a conundrum among your held understandings .... manifest.
It is of course NOT a vestige of the good old gold days - whenever one thinks they were relevant to anything. Not at all.
Every sovereign government CAN issue sovereign debt.(borrow).
If and How the sovereign does so is legislatively and autonomously determined.
Read the Statute establishing the Treasury.
Having said, that, John Zelnicker , who claimed to want to ignore my comments because he went somewhere, and saw nothing. You have both exactly stated the law, Under Deficit Spending in Budget, the government MUST borrow, or it cannot pay the Bills) and denied that law exists (claiming the law establishing Treasury's authorities only exist because of gold) in one swell foop.
Nice work.
That's how old the law is, John. Were we on a gold standard in 1791 ?
Thank you for your response, John Zelnicker. I agree that no measure is perfect and that Congress already has the power to spend what it deems necessary. However, the entire point of the American Constitution, as I understand it, is to put restrictions on the powers of the government.
Giving Congress the right to print and spend as much money as it "deems necessary" is a lot of power and a giant potential for abuse. I guess looking at unemployment and inflation numbers and making spending decisions does make more sense than an aribtrary debt ceiling. It would be nice if the US government acted as an "employer of last resort" as it makes a lot more sense to be paying people to work than not to work.
In short, I guess what you are trying to say is that Congress already has the power to spend what it wants to and the arbitrary debt ceiling does nothing to curb this power but only muddies the conversations. I am finding it difficult to disagree with this.
The quantity theory of money is shaky even within the current monetary paradigm of Debt Only and Burden to repay Only. If we integrated the new paradigm of Direct and Reciprocal Monetary Gifting strategically into the Debt On/Burden to Repay Only system...we could tremendously increase fiscal deficits which is a primary objective of MMT in order to renew America's infrastructure and fund the mega-projects necessary to confront climate change, not to mention with the primary new paradigm policy of a 50% Discount/Rebate at retail sale, double everyone's purchasing power, greatly increase demand for every enterprise's goods and services and forever macro-economically end inflation.
These are immediate, universal (everyone participates in retail sale), empirical/mathematical, temporal universe effects. No other reform movement even comes close to creating so many beneficial effects. Why? For no other reason than that they aren't analyzing on the paradigmatic level. They, we ALL, URGENTLY need to start doing so.
We will never have a rational and effective debate about resources until we resolve the monetary paradigm. In fact resolving it will immediately free us to utilize the above mega-fiscal deficits to do what we haven't done for 50 years...confront climate change.
The clock is ticking on the disintegrative trend of human civilization and on the existential potential of unconfronted climate change. Focus on the core of the core economic problem, namely the current monetary paradigm and change it with the policy applications of the new one.
With the implementation of a Job Gty, a tax regime should be implemented so that tax rates AUTOMATICALLY kick in if monthly inflation targets are reached. These should include:
Paradigm changes are always accompanied by paradox. This is because they destroy orthodoxies. Once a 50% Discount/Rebate policy at retail sale and a universal dividend to every adult and are enacted almost all payroll taxes will be redundant and hence cancellable because inflation will have been ended permanently and no need for welfare or unemployment insurance with the dividend. A job guarantee aligns philosophically with the new paradigm of Monetary grace as in gifting and so could also be implemented. It's just another one of the objectives of MMT that the new paradigm enables.
No. The government neither ISSUES the paper nor spends 'Currency', which is the Paper and Coins tiny subset of the money supply. Have you read the Money Statutes?
Joe - You're kinda right that the government doesn't issue paper or currency. The government sends instructions (not money) to the bank of a government employee, a Social Security recipient like me, or a contractor and tells the bank to increase the balance in the target's account. Currency is sent to banks in exchange for existing reserves in the bank's Fed account.
It's obvious that you are very attached to you pet theory, so I went to your Substack to see what you have written as the The Money Apprentice, which I assume is you.
There's nothing there, just like there's nothing of substance in your comments. Mostly they're warmed-over Monetarism and I don't have the time nor the inclination to continue arguing with you.
Sajid - The limit on government spending is determined by the availability of real resources for sale in its currency. If there are no unused resources available, such as unemployed workers or unused industrial capacity, then further government spending (or further private sector spending) can cause inflation (not hyperinflation). In other words, when spending exceeds the capacity of the economy to provide real resources you will get some inflation.
Our recent inflation, which is falling monthly now, was caused by a lack of resources due to the supply chain problems due to COVID. Now that those problems have mostly been resolved, inflation is falling. There were other factors, of course, but that was a major one.
Another major cause of current inflation has been major companies raising their prices far more than the increased cost of their inputs, which has brought them enormous profits on the backs of the poor and working class who can barely afford food and fuel and their other necessities. This factor also seems to be moderating.
The value of a given giant pile of money is not affected by government spending per se. Money doesn't follow the classic supply/demand curve like physical assets do.
"Sajid - The limit on government spending is determined by the availability of real resources for sale in its currency. If there are no unused resources available, such as unemployed workers or unused industrial capacity, then further government spending (or further private sector spending) can cause inflation (not hyperinflation)."
What is a good measure for whether resources are being optimally utilized? Perhaps Congress determines that America has spare industrial capacity for infrastructure and builds a giant and expensive bridge across the Gulf of Mexico from Houston to The Everglades. Such a heavy drain on America's resources would clearly make everything else more expensive.
Do you trust Congress with the mandate to print and spend as much money as they deem necessary based on what they determine America's industrial capacity to be?
I would also like to have this trust, but in order to gain it, I would like to know who determines America's industrial capacity, how they determine it, and how they determine how to optimally use that capacity to make the future a better place.
Is there one person doing this? Does the free-market of competing political interests somehow magically work out in America's favor and we must just hope it always will?
I am sorry, but I would still like a bit more information about these topics if you have some.
The best measure of excess capacity within an economy is involuntarily unemployment. There are people willing and able to perform paid work for things that need doing yet can find no takers. Another key indicator that should leap out at you is crumbling infrastructure. China has provided us with a fantastic example of how a nation can marshal its human resources in such a way that lifts hundreds of millions out of poverty and develops its infrastructure via massive investment facilitated by government spending.
The comparison with China does not work here. A centralized plan works when you are confident that the future you are trying to achieve is the correct one, which works well when you are following. America, for better and for worse, is not following, so it could totally spend billions of dollars on suboptimal infrastructure. Moreover, just because there are people willing to work does not mean that they will automatically work in a way that benefits society and themselves. What if the military hires them to invade Canada?
I feel that there needs to be a vision for the future, a metric to determine what that vision will cost, and a way to estimate and ultimately measure what was gained from that vision. Mere GDP growth means little if it is a result of inflation.
Giving government a blank check means that they could crowd out private spending and completely dominate the economy until they crash it. I know this scenario is unlikely, but I would still like to know whether it is happening before it happens, and that means that we need some measures of whether government is spending too much and whether the money is well-spent.
Sajid - We don't do the vision thing in the US. It might get in the way of profit-making at all costs. Besides, no one, not even the Chinese can be sure that any particular vision will come to pass in the future. Too many unknowns. Nevertheless, we could do better.
Suboptimal infrastructure: Most projects are granted to the lowest bidder. Unless they are cost-plus contracts rather than fixed price, the contractor will cut corners and suboptimal will be the inevitable result.
Employers determine whether or not the work benefits society, not the workers. Your "what if" isn't relevant. The military doesn't make invasion decisions, politicians do.
Government spending does not crowd out private spending. That's an economic concept that has been shown to be false, because it's based on incorrect assumptions.
Amazing. This is ALL true.
But it has nothing to do with MMT.
What's the "theory" about money ....... you know, the monetary theory ?
Leave out the currency, a separate, matter.
And leave out all the great Post-Keynesian policies.
Waddaya got ?
The Money Apprentice.
As with any economy there are no perfect measures and they are all estimates.
One good measure is whether or not we are at full employment, defined by MMT as everyone who is able and willing to work has a job paying a socially-inclusive wage. See Bill Mitchell: http://bilbo.economicoutlook.net/blog/
Statistically this means getting the unemployment and underemployment rates as close to zero as possible. According to Mitchell, that's about 1-2%, which is made up of people switching jobs, etc. That irreducible part is frictional unemployment.
The participation rate is also important. This is defined as the percentage of the noninstitutionalized population over the age of 16 who are employed or looking for work. It can be increased by finding jobs for "discouraged workers" who have stopped looking for work because they can't find anything suitable.
Your bridge across the Gulf reminds me of one proposed by a Congressman from Alaska who proposed a bridge from the mainland to a small island that was called the "Bridge to Nowhere". It never passed Congress, fortunately.
I don't trust Congress at all, but they can already spend whatever they deem necessary. However, they won't spend to increase industrial capacity except for weapons makers as they still believe that deficits are bad and need to be reduced In addition, it would take industrial planning, i.e., targeting spending to specific industries and companies. They won't do that (again other than with weapons) because that's what the Soviet Union did and Russia does and that's anathema to our government. Bad commies and all that, ya know.
Industrial capacity is determined by the Federal Reserve which reports monthly on Industrial Production and Capacity Utilization.
There are plenty of true believers who think that the free market will indeed magically bring about the best result. As we have seen over the past 40+ years, that's a myth. The most productive era in the past 100 years was the post-war period up until President Carter when top individual tax rates were 74-91% and many industries were heavily regulated. Carter started the deregulation movement by deregulating the airlines and you can see the result in the recent Southwest debacle over the holidays.
"I don't trust Congress at all, but they can already spend whatever they deem necessary. "
Have you re-written the Constitutions APPROPRIATIONS clause?
Actually, NO, Congress cannot spend unless it is authorized (IN THE BUDGET) for both spending and appropriation - which means "money" (from taxes and debt-proceeds) already in the Treasury account.
Just saying.
The Money Apprentice
Joe - Congress is the body that authorizes both spending and appropriation. Your statement that they can't spend what they deem necessary doesn't make sense.
John,
Congress does it all.
It has authorized the spending, AND it has authorized the appropriation of the FUNDS IN THE TREASURY - not already appropriated.
Do you read the Appropriations Bills?
They conform to the same Constitutional limitations.
Were there no Debt-Ceiling, no problem.
BUT, more important, were Congress to grant itself the money-creation powers that the Constitution permits ( see Greenbacks), then the smartest kids in the room would not be advocating for more government BORROWING - just because their banker-guru says so.
Thanks.
The Money Apprentice.
When necessary, like now, CHANGE THE LAW. The whole "problem" with both the national "debt" and the biggest economic problem since forever, inflation, is solved by integrating the new paradigm of Gifting into the Debt Only system.
That is accomplished by 1) the government/treasury simply creating and distributing the money to fund the government with MONEY, NOT presto-change-o Treasuries...so everyone thinks its actually a debt when its really just money created and distributed and 2) the government/monetary authority rebates the 50% discount that retailers grant to consumers which accomplishes a) beneficial macro-economic deflation for everyone (you can buy $100 worth of sweet potatos for $50 and Buy a $60k Tesla for $30k...JUST DO THE MATH ON EVERY PURCHASE THAT EVERYONE MAKES) and b) the rebate aspect of the policy makes the retailer whole on their overheads and profit margins.
If you're not analyzing and looking at things on the paradigmatic level you're just blabbering around with a shit load of complexities that the paradigmatic level resolves and hence you become an erudite dunce.
Steve,
I really do not enjoy your unfounded and petty asides.
Let me know if I should elaborate.
LOL.
Paradynamic. WOW .
Shifting the lever, eh?
I already left this link once.
So.
The National Emergency Employment Defense Act. of 2011.
https://www.congress.gov/bill/112th-congress/house-bill/2990/text
Does all you're asking for, except the silly and unnecessary rebates ........ better done through raw material Parity Pricing, and more.
Take a look in the mirror, head.
The Money Apprentice
If you scroll down you will see my apology for misunderstanding that you do indeed comprehend the paradigm of Debt Only so please lets just proceed.
I'm familiar with Kucinich's proposal and I'm okay with what it suggests. Its problem is in what it doesn't suggest, namely an immediate, direct to the individual set of policies that simultaneously resolves the economic AND THE POLITICAL PROBLEMS facing us. Paradigm changes don't occur all the time, but a linked multi-systemic change is the signature of a mega-paradigm change of which there have probably only been three in the entire history of the human species...so lets go mega because why not?
Its wonderful to get such participation on this subject and its core problem (the current monetary paradigm and lack of consciousness of the necessity of paradigmatic analysis). I really hope that you Stephanie will offer your input.
The government has no need to "borrow", the requirement that Treasury securities be issued in an amount equal to the difference between spending and tax revenue is a vestige of the days when we were on a gold standard that should repealed, as should the debt limit.
Correct. If you just create money and distribute it strategically (a universal dividend to every adult and with a 50% Discount/Rebate policy at retail sale) you solve all of the problems and ignorance of the current paradigm of Debt Only.
Steve - The problem with a UBI or universal dividend is that while it provides more money for people to spend, it does nothing to provide the additional real resources to be purchased by that additional money. As a result, it can be inflationary. I think Bill Mitchell has written the best analysis on this: http://bilbo.economicoutlook.net/blog/?p=44133
There are other articles and podcasts, too.
John, You're correct that we need to coordinate the productiove system, but 1) a 50% discount at retail sale is going to implement beneficial deflation because we've never had y/oy inflation of 50% let alone moment to moment 50% inflation, 2) a doubling of purchasing power doesn't ipso facto translate into a doubling of consumption/economic through put because not everyone is going to eat twice as much or buy twice as many pairs of shoes as they did before the 50% discount and 3) once a mass movement communicates the obvious and tremendous benefits of the new paradigm's policies that awareness and its logical political effects will be perceived by the decision makers of savvy business and additional productive capacity will become the reality relatively quickly.
Steve,
"If ........."
Greenbacks.
Debt-free. Spent into circulation as permanently-circulating (until Clinton).
Modern version.
https://www.congress.gov/bill/112th-congress/house-bill/2990/text
Pass that.
No more debt-ceiling problems.
Ever.
Just saying.
The Money Apprentice.
Yes, but the distributed money must be done strategically so as to resolve the problems of the current paradigm od Debt Only.
Seems a conundrum among your held understandings .... manifest.
It is of course NOT a vestige of the good old gold days - whenever one thinks they were relevant to anything. Not at all.
Every sovereign government CAN issue sovereign debt.(borrow).
If and How the sovereign does so is legislatively and autonomously determined.
Read the Statute establishing the Treasury.
Having said, that, John Zelnicker , who claimed to want to ignore my comments because he went somewhere, and saw nothing. You have both exactly stated the law, Under Deficit Spending in Budget, the government MUST borrow, or it cannot pay the Bills) and denied that law exists (claiming the law establishing Treasury's authorities only exist because of gold) in one swell foop.
Nice work.
That's how old the law is, John. Were we on a gold standard in 1791 ?
Hyperbole. The glue that holds MMT together.
You need to try harder.
The Money Apprentice
You're right, I couldn't resist.
However, you are misinterpreting what I said. 'Nuff said.
Thank you for your response, John Zelnicker. I agree that no measure is perfect and that Congress already has the power to spend what it deems necessary. However, the entire point of the American Constitution, as I understand it, is to put restrictions on the powers of the government.
Giving Congress the right to print and spend as much money as it "deems necessary" is a lot of power and a giant potential for abuse. I guess looking at unemployment and inflation numbers and making spending decisions does make more sense than an aribtrary debt ceiling. It would be nice if the US government acted as an "employer of last resort" as it makes a lot more sense to be paying people to work than not to work.
In short, I guess what you are trying to say is that Congress already has the power to spend what it wants to and the arbitrary debt ceiling does nothing to curb this power but only muddies the conversations. I am finding it difficult to disagree with this.
See Prof. Kelton's latest post that was published since your comment:
https://stephaniekelton.substack.com/p/these-are-the-times-that-try-mens
Sajid,
The quantity theory of money is shaky even within the current monetary paradigm of Debt Only and Burden to repay Only. If we integrated the new paradigm of Direct and Reciprocal Monetary Gifting strategically into the Debt On/Burden to Repay Only system...we could tremendously increase fiscal deficits which is a primary objective of MMT in order to renew America's infrastructure and fund the mega-projects necessary to confront climate change, not to mention with the primary new paradigm policy of a 50% Discount/Rebate at retail sale, double everyone's purchasing power, greatly increase demand for every enterprise's goods and services and forever macro-economically end inflation.
These are immediate, universal (everyone participates in retail sale), empirical/mathematical, temporal universe effects. No other reform movement even comes close to creating so many beneficial effects. Why? For no other reason than that they aren't analyzing on the paradigmatic level. They, we ALL, URGENTLY need to start doing so.
We will never have a rational and effective debate about resources until we resolve the monetary paradigm. In fact resolving it will immediately free us to utilize the above mega-fiscal deficits to do what we haven't done for 50 years...confront climate change.
The clock is ticking on the disintegrative trend of human civilization and on the existential potential of unconfronted climate change. Focus on the core of the core economic problem, namely the current monetary paradigm and change it with the policy applications of the new one.
With the implementation of a Job Gty, a tax regime should be implemented so that tax rates AUTOMATICALLY kick in if monthly inflation targets are reached. These should include:
a) Income Taxes,
b) Sales/VAT Taxes
c) Asset Value (or Wealth) Taxes
That'll cool things off pronto.
Paradigm changes are always accompanied by paradox. This is because they destroy orthodoxies. Once a 50% Discount/Rebate policy at retail sale and a universal dividend to every adult and are enacted almost all payroll taxes will be redundant and hence cancellable because inflation will have been ended permanently and no need for welfare or unemployment insurance with the dividend. A job guarantee aligns philosophically with the new paradigm of Monetary grace as in gifting and so could also be implemented. It's just another one of the objectives of MMT that the new paradigm enables.
No. The government neither ISSUES the paper nor spends 'Currency', which is the Paper and Coins tiny subset of the money supply. Have you read the Money Statutes?
It's all a Moslerian/ MMT canard.
The Money Apprentice
Joe - You're kinda right that the government doesn't issue paper or currency. The government sends instructions (not money) to the bank of a government employee, a Social Security recipient like me, or a contractor and tells the bank to increase the balance in the target's account. Currency is sent to banks in exchange for existing reserves in the bank's Fed account.
It's obvious that you are very attached to you pet theory, so I went to your Substack to see what you have written as the The Money Apprentice, which I assume is you.
There's nothing there, just like there's nothing of substance in your comments. Mostly they're warmed-over Monetarism and I don't have the time nor the inclination to continue arguing with you.
Wishing you the best, stay safe.