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?
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.
Totally inadequate response. Instead of wasting time trying to say that the inflation people see isn't what they think, you should have spent all your time explaining what is the cause of the inflation that they do see. As I see it, the supply chain that we have that depends on "just in time delivery" may be efficient under normal circumstances, but it is very fragile in the face of the unexpected. The disruption to the supply chain from the pandemic is now showing up even as we are making feeble attempts to restart the economy. We need to take steps to fix the supply chain situation. I have seen a report that the backup at the ports of entry is just the tip of the iceberg. We don't have the warehouse space to even store the goods if they went through the ports with no backup. These are problems that need solving, but they may be outside your area of expertise.
For years I have been warning MMT proponents to stop dismissing inflation just because there has not been any inflation up to now. Instead MMT should have discussed why there was no inflation before, and what would have to change to see inflation rise. Up until know there has not been enough consumer demand to raise consumer prices. The oligarchs, who have been receiving trillions of dollars that the Fed has pumped in, aren't the ones who buy consumer good. The oligarchs take excess money and put it into the stock market, which has been rising. (Stock market price inflation).. Now that consumers have started receiving a little money from the government/Fed, they are trying to buy more, but the supply chain is in a big mess. The disrupted supply chain wasn't so much of an issue as long as the consumers couldn't afford to buy things. You could also point out that when workers couldn't go to work they couldn't produce the supply of goods that was needed. The external supply from China was also being disrupted.
This resort to economic reports from "experts", is not going to convince the many people who have become skeptical of all experts lately (and with good reason). Explain things in understandable ways without resorting to playing the credentials game.
Stephanie, can you see how we would never have inflation if we implemented a 50% discount/rebate policy at retail sale? And if that were so what would logically prevent us from being able to have huge fiscal deficits for infrastructure and to fight climate change?
Stephanie, As a professional economist I totally agree with your analysis. I do have a suggestion about your presentation in this interview. Within the time constraints I would suggest that you focus less time on restating the common wisdom that deficits are bad and spend more time showing why this is false.
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?
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.
Totally inadequate response. Instead of wasting time trying to say that the inflation people see isn't what they think, you should have spent all your time explaining what is the cause of the inflation that they do see. As I see it, the supply chain that we have that depends on "just in time delivery" may be efficient under normal circumstances, but it is very fragile in the face of the unexpected. The disruption to the supply chain from the pandemic is now showing up even as we are making feeble attempts to restart the economy. We need to take steps to fix the supply chain situation. I have seen a report that the backup at the ports of entry is just the tip of the iceberg. We don't have the warehouse space to even store the goods if they went through the ports with no backup. These are problems that need solving, but they may be outside your area of expertise.
For years I have been warning MMT proponents to stop dismissing inflation just because there has not been any inflation up to now. Instead MMT should have discussed why there was no inflation before, and what would have to change to see inflation rise. Up until know there has not been enough consumer demand to raise consumer prices. The oligarchs, who have been receiving trillions of dollars that the Fed has pumped in, aren't the ones who buy consumer good. The oligarchs take excess money and put it into the stock market, which has been rising. (Stock market price inflation).. Now that consumers have started receiving a little money from the government/Fed, they are trying to buy more, but the supply chain is in a big mess. The disrupted supply chain wasn't so much of an issue as long as the consumers couldn't afford to buy things. You could also point out that when workers couldn't go to work they couldn't produce the supply of goods that was needed. The external supply from China was also being disrupted.
This resort to economic reports from "experts", is not going to convince the many people who have become skeptical of all experts lately (and with good reason). Explain things in understandable ways without resorting to playing the credentials game.
Stephanie, can you see how we would never have inflation if we implemented a 50% discount/rebate policy at retail sale? And if that were so what would logically prevent us from being able to have huge fiscal deficits for infrastructure and to fight climate change?
Stephanie, As a professional economist I totally agree with your analysis. I do have a suggestion about your presentation in this interview. Within the time constraints I would suggest that you focus less time on restating the common wisdom that deficits are bad and spend more time showing why this is false.
Marvin Feldman, Ph.D.