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Bill K's avatar

In a past interview you said, “…let's start by recognizing that inflation, as you say, is a dynamic process, it is a continuous increase in the price level, it's not a one off. It's a complex phenomenon, there isn’t economist on Earth who can write down for you a model of inflation that will apply in all times across, space and time, nobody can do it.” While in this piece you say, “… the financial costs aren’t the binding constraint. Inflation is.”

If inflation is the binding constraint within the MMT framework and modeling inflation over time can’t be done, then how would you calculate in advance the spending limits? Could you write a piece that goes into explaining how the theory could be actually implemented in a calculated predictable way? Or is that not possible?

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Steve Hummel's avatar

Don't get me wrong, all of the heterodox reform research of Mosler, Keen, Hudson etc. is well and good, but the deepest part of the problem has not been addressed and that is discovering the single new paradigm concept and finding an efficacious way to integrate it into the economy that actually changes the nature of its entire pattern. The present paradigm for the creation and distribution of money is Debt Only. The new paradigm is Direct and Reciprocal Monetary Gifting and the most efficacious way to implement the new paradigm is with a 50% discount to consumers at retail sale every penny of which is rebated back to the merchant giving it to consumers by the FED or another monetary authority. This resolves the problems of individual monetary scarcity, systemic austerity and any possibility of inflation, and enables many more political and economic possibilities because it integrates interests and agendas on the left and the right. Again, this in no way belittles current heterodox research but rather affirms their conclusions and simply makes their stated goals a reality.

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