In regards to inflation, I believe MMT has a powerful solution to address it, although I don't know if I've seen it discussed before.
I've seen arguments for a jobs guarantee, which is cool, but what about the other side of that equation... the potential for guaranteed market competition to ensure price stability.
If we used money creation to hire the staff and fund the operating costs of a "Federal Business" whose sole purpose is to create supply to stabilize prices, then what you have is an entity that more or less looks like a privately owned business from the market's perspective (it sells goods and services), but it would not need profits to stay afloat, and therefore would never experience market pressures to raise their prices.
So if a business exists in the market that refuses to raise their prices, can't go out of business, and can't be bought out, then any other businesses competing with it would hesitate to raise their prices, otherwise they risk losing business to the Federal Business. If no one is raising their prices in the market, you have stopped inflation.
I don't believe it would be: 1) ethical to use federal subsidy to compete against private business or 2) a federally created business could, in a timely manner, compete effectively with private business experienced in supplying these goods and services
1) I don't understand how it would be unethical if it results in price stability... especially if its doing it by increasing the supply of things like food, shelter, and health services... things that, when prices rise, are especially painful to people that need to buy them to satisfy basic human physiological needs. Improving access to necessities to live, I would argue, is the pinnacle of ethics and the best thing that can be done with money.
2) I would argue that's for the market to decide. Additionally, the staff hired for a Federal Business would be from the general populace, the same people that would otherwise work at a privately owned or publicly traded company. Part of the money created would go toward a salary offer competitive enough to entice an experienced manager, who knows how to run that sort of business, to leave their current job and start working for the Federal Business in the same way. So of course the right people would have to be hired to become successful, but its the same hurdle that any other business has to overcome.
Its my opinion that the best thing government can do is be sure there is fair and honest competition in the marketplace. 1) If you owned a shoe factory and the government used public funds to subsidize the operating costs of a competing factory, they could sell at a lower cost and put you out of business even if your were more efficient at making shoes. Is that fair or good economics?
2) Government isn't good at running a business. Business people who care about their business are good at running business.
Market fairness is my goal as well :). My main concern is that the forces of monopolization (and cartelization) removes market competition and the benefits that come with it. If a business gets big enough, the competition can just be bought out or out-competed into bankruptcy. This leaves no market pressures to keep their prices in check, and they've removed supply (and job) creators from the market. And since there is no political appetite to break up monopolies (last time was AT&T in the 80s), nor declare price freezes (not since Nixon), I would consider it better to ensure monopolies always have a business to compete with, which keeps competitive market forces intact. I think there is also a valuable sub-discussion about which market sectors suffer in this way and which don't, which would justify the inclusion or exclusion of a Federal Business.
You are also totally correct in that a Federal Business, as described, has the capability of undercutting competing businesses to the point of driving them out of business. I would consider that mis-management though and grounds for firing the heads of the business, since that would be against their purpose as a guaranteed competitor. The idea is that the Federal Business competes to keep prices honest, and you can't be a competitor if there's no one left to compete with.
You are talking about a form of classic socialism where the means of production are owned by the State. That will never, ever be accepted in our neoliberal economy.
This idea is distinct and different from that. There is no seizing the means of production here. The government is serving as the sole investor of a specific business entity, and it results in the addition of that single business entity to an existing market sector. Otherwise, the market remains the exact same as it is today.
The neoliberal economy has been operating just fine in the presence of the USPS. It would continue to manage just fine here too.
I get that, although the concept of seizing isn't relevant. Socialist governments haven't necessarily "seized" the means of production, they have also created them from the ground up.
It's still a partial ownership of the means of production and for that reason alone the idea is doomed. I actually think it would be a great idea. I'm a lifelong enthusiast for the USPS ever since I worked for them over 50 years ago when I was 18.
Of course, the neoliberals would love to privatize USPS which would destroy it. They have been working towards this for the past couple of decades.
I really don't disagree with you, I'm just very pessimistic that such a thing could ever happen.
Ahh, I misunderstood where you were coming from! Yea, pushing for new ideas is often an uphill battle, and I can understand why today's political climate would make it feel unlikely that such an idea would even be given a shot...
I think what makes me feel bullish about this particular idea is that, while I would consider it a left-leaning idea, its strangely palatable from a right-wing perspective too. The solution doesn't raise taxes and doesn't add to government debt (thanks MMT!), and also doesn't use any sweeping market mandates from the government like price freezes. Since it has a clear answer for where the money comes from and that it won't create inflation, most of the typical arguments for doing nothing are just not there.
You are right that the "no, because socialism" argument still exists, but I think that can be soothed by explaining that entities like the USPS exist within a capitalist market and it still remains capitalist. This all pre-supposes arguing in good faith though, which is a big assumption these days.
Thank you, Derrin. Your bullish attitude is refreshing and encouraging. I wish more folks would think outside of the box as you have.
Along with ideas like yours, if we can just mobilize the working class to unite and fight back against the wealthy elites running this country we might be able to save it. The recent increase in labor actions is a sign that workers are finally reaching the end of their ropes and are ready to put themselves on the line to force employers to recognize and compensate them for their true value. Sadly, the Fed is trying to break the back of labor again the way Volker did in the 1980's.
Thanks for highlighting the UNCTAD statement on the global implications of US and UK interest rate policy. (I’d missed it.) A long history of fighting for the “periphery”.
@StephanieKelton I recently read your book, an excellent read! I think it should be required for all economics students! I have a question, I realize the graphic in your is very simplified, but describes how the economy balances out and I wonder where all of the non-government surplus lives when we have such a high deficit?
For example, we currently have an enormous deficit, which I understand from your book how it can be taken care of in reality. However, where did all the $31 trillion go?
I assume a chunk of this is the tax cut from 2017. 
I greatly appreciate the debate among Derrin, Paul, and John, below. This is the level of policy-relevant political/economic discussion we would have if the Blue states could divest themselves of the Red. Under the aegis of MMT.
Thank you for the continuous update on the inflation issue 🙏
Always on the mark
In regards to inflation, I believe MMT has a powerful solution to address it, although I don't know if I've seen it discussed before.
I've seen arguments for a jobs guarantee, which is cool, but what about the other side of that equation... the potential for guaranteed market competition to ensure price stability.
If we used money creation to hire the staff and fund the operating costs of a "Federal Business" whose sole purpose is to create supply to stabilize prices, then what you have is an entity that more or less looks like a privately owned business from the market's perspective (it sells goods and services), but it would not need profits to stay afloat, and therefore would never experience market pressures to raise their prices.
So if a business exists in the market that refuses to raise their prices, can't go out of business, and can't be bought out, then any other businesses competing with it would hesitate to raise their prices, otherwise they risk losing business to the Federal Business. If no one is raising their prices in the market, you have stopped inflation.
Couldn't that work? Maybe I'm missing something?
I don't believe it would be: 1) ethical to use federal subsidy to compete against private business or 2) a federally created business could, in a timely manner, compete effectively with private business experienced in supplying these goods and services
1) I don't understand how it would be unethical if it results in price stability... especially if its doing it by increasing the supply of things like food, shelter, and health services... things that, when prices rise, are especially painful to people that need to buy them to satisfy basic human physiological needs. Improving access to necessities to live, I would argue, is the pinnacle of ethics and the best thing that can be done with money.
2) I would argue that's for the market to decide. Additionally, the staff hired for a Federal Business would be from the general populace, the same people that would otherwise work at a privately owned or publicly traded company. Part of the money created would go toward a salary offer competitive enough to entice an experienced manager, who knows how to run that sort of business, to leave their current job and start working for the Federal Business in the same way. So of course the right people would have to be hired to become successful, but its the same hurdle that any other business has to overcome.
Its my opinion that the best thing government can do is be sure there is fair and honest competition in the marketplace. 1) If you owned a shoe factory and the government used public funds to subsidize the operating costs of a competing factory, they could sell at a lower cost and put you out of business even if your were more efficient at making shoes. Is that fair or good economics?
2) Government isn't good at running a business. Business people who care about their business are good at running business.
Market fairness is my goal as well :). My main concern is that the forces of monopolization (and cartelization) removes market competition and the benefits that come with it. If a business gets big enough, the competition can just be bought out or out-competed into bankruptcy. This leaves no market pressures to keep their prices in check, and they've removed supply (and job) creators from the market. And since there is no political appetite to break up monopolies (last time was AT&T in the 80s), nor declare price freezes (not since Nixon), I would consider it better to ensure monopolies always have a business to compete with, which keeps competitive market forces intact. I think there is also a valuable sub-discussion about which market sectors suffer in this way and which don't, which would justify the inclusion or exclusion of a Federal Business.
You are also totally correct in that a Federal Business, as described, has the capability of undercutting competing businesses to the point of driving them out of business. I would consider that mis-management though and grounds for firing the heads of the business, since that would be against their purpose as a guaranteed competitor. The idea is that the Federal Business competes to keep prices honest, and you can't be a competitor if there's no one left to compete with.
You are talking about a form of classic socialism where the means of production are owned by the State. That will never, ever be accepted in our neoliberal economy.
This idea is distinct and different from that. There is no seizing the means of production here. The government is serving as the sole investor of a specific business entity, and it results in the addition of that single business entity to an existing market sector. Otherwise, the market remains the exact same as it is today.
The neoliberal economy has been operating just fine in the presence of the USPS. It would continue to manage just fine here too.
I get that, although the concept of seizing isn't relevant. Socialist governments haven't necessarily "seized" the means of production, they have also created them from the ground up.
It's still a partial ownership of the means of production and for that reason alone the idea is doomed. I actually think it would be a great idea. I'm a lifelong enthusiast for the USPS ever since I worked for them over 50 years ago when I was 18.
Of course, the neoliberals would love to privatize USPS which would destroy it. They have been working towards this for the past couple of decades.
I really don't disagree with you, I'm just very pessimistic that such a thing could ever happen.
Ahh, I misunderstood where you were coming from! Yea, pushing for new ideas is often an uphill battle, and I can understand why today's political climate would make it feel unlikely that such an idea would even be given a shot...
I think what makes me feel bullish about this particular idea is that, while I would consider it a left-leaning idea, its strangely palatable from a right-wing perspective too. The solution doesn't raise taxes and doesn't add to government debt (thanks MMT!), and also doesn't use any sweeping market mandates from the government like price freezes. Since it has a clear answer for where the money comes from and that it won't create inflation, most of the typical arguments for doing nothing are just not there.
You are right that the "no, because socialism" argument still exists, but I think that can be soothed by explaining that entities like the USPS exist within a capitalist market and it still remains capitalist. This all pre-supposes arguing in good faith though, which is a big assumption these days.
Thank you, Derrin. Your bullish attitude is refreshing and encouraging. I wish more folks would think outside of the box as you have.
Along with ideas like yours, if we can just mobilize the working class to unite and fight back against the wealthy elites running this country we might be able to save it. The recent increase in labor actions is a sign that workers are finally reaching the end of their ropes and are ready to put themselves on the line to force employers to recognize and compensate them for their true value. Sadly, the Fed is trying to break the back of labor again the way Volker did in the 1980's.
Thanks for highlighting the UNCTAD statement on the global implications of US and UK interest rate policy. (I’d missed it.) A long history of fighting for the “periphery”.
The hubris of some economists know no bounds. Thanks for providing the report. I’ll add it’s successful influence to my prayer intentions.
Neither the UN nor any of their agencies should be in the business of suggesting how we manage our money supply.
@StephanieKelton I recently read your book, an excellent read! I think it should be required for all economics students! I have a question, I realize the graphic in your is very simplified, but describes how the economy balances out and I wonder where all of the non-government surplus lives when we have such a high deficit?
For example, we currently have an enormous deficit, which I understand from your book how it can be taken care of in reality. However, where did all the $31 trillion go?
I assume a chunk of this is the tax cut from 2017. 
https://apnews.com/article/inflation-biden-prices-national-debt-congress-d85ae0ba056412286bef497422c34969
I greatly appreciate the debate among Derrin, Paul, and John, below. This is the level of policy-relevant political/economic discussion we would have if the Blue states could divest themselves of the Red. Under the aegis of MMT.