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@aoc's expansionary, unconstrained domestic spending proposal #GND (Green New Deal) is based on #MMT (Modern Monetary Theory).
It argues only regulating inflation & unemployment matters, not
deficits.
Some of my problems with MMT...
en.m.wikipedia.org/wiki/Modern_Mo…
@aoc's expansionary, unconstrained domestic spending proposal #GND (Green New Deal) is based on #MMT (Modern Monetary Theory).
It argues only regulating inflation & unemployment matters, not
deficits.
Some of my problems with MMT...
en.m.wikipedia.org/wiki/Modern_Mo…
I'll let @paulkrugman handle MMT's explicit problems. Mine are with its implicit presumptions:
1—We know how to manage long term vs short term
2—Global interdependencies don't matter
3—permission for uncapped spending
4—ignoring effect of aging
5—We can control inflation post-MMT
1—We know how to manage long term vs short term
2—Global interdependencies don't matter
3—permission for uncapped spending
4—ignoring effect of aging
5—We can control inflation post-MMT
1) LT vs ST
Even w/traditional keynesianism, we are terrible at ½ the theory. SAVE during booms, spend during downturns. We've got the 2nd half down. Not the first one. Is there anything in our history that might suggest we are capable or willing to make good LT rate decisions?
Even w/traditional keynesianism, we are terrible at ½ the theory. SAVE during booms, spend during downturns. We've got the 2nd half down. Not the first one. Is there anything in our history that might suggest we are capable or willing to make good LT rate decisions?
2) Global economy??
#MMT seems painfully isolationist. We rely on foreign borrowing, foreign goods & multilateral investment. Do we seriously believe WE control our rates beyond a narrow band? If our credit/economy start deteriorating, watch rates sail away from Fed control.
#MMT seems painfully isolationist. We rely on foreign borrowing, foreign goods & multilateral investment. Do we seriously believe WE control our rates beyond a narrow band? If our credit/economy start deteriorating, watch rates sail away from Fed control.
3) Permission to spend
I get why this theory is appealing. It licenses spending beyond proportions that have historically led to wars. So what better way to feed them political need to promise giveaways than to run this experiment on a nation of 350M people?
I get why this theory is appealing. It licenses spending beyond proportions that have historically led to wars. So what better way to feed them political need to promise giveaways than to run this experiment on a nation of 350M people?
4) Demographic decline
US & Western birth rates are plummeting. The productive tax base shrinking. If #MMT-inspired spending backfires, we're SCREWED. Like plowing all your savings into a startup at age 60, you have few working years to make up for the losses. A RISKY experiment.
US & Western birth rates are plummeting. The productive tax base shrinking. If #MMT-inspired spending backfires, we're SCREWED. Like plowing all your savings into a startup at age 60, you have few working years to make up for the losses. A RISKY experiment.
5) control inflation?
If MMT experiment doesn't work. If other countries stop financing our deficits, selling us goods on credit. If our bond ratings drop. What tools do we have left to fix this? To motivate our aging UBI-ed, entitlement-rich labor force to innovate our way out?
If MMT experiment doesn't work. If other countries stop financing our deficits, selling us goods on credit. If our bond ratings drop. What tools do we have left to fix this? To motivate our aging UBI-ed, entitlement-rich labor force to innovate our way out?
@AOC I'm rebranding Modern Monetary Theory, MAGIC Monetary Theory.
Free money to ALL & to all a goodnight!
Good piece by @doughenwood on #MMT
#economics #GND
Free money to ALL & to all a goodnight!
Good piece by @doughenwood on #MMT
#economics #GND
Thanks to this article, I'm finally seeing #MMT for what it really is - a massive rationalization of federal expansion. It is the pretext to socialism, the way Affordable Care Act was meant to lay groundwork for single payer #healthcare.
#economics
ftalphaville.ft.com/2019/03/01/155…
#economics
ftalphaville.ft.com/2019/03/01/155…
@AOC @DougHenwood Sick of Western medicine? Time to give Santeria a chance.
Any #economic philosophy that preaches redistribution & bureaucracy, but not growth or fiscal responsibility is as scary as adopting keynesian spending, but not the saving...wait a minute.
Any #economic philosophy that preaches redistribution & bureaucracy, but not growth or fiscal responsibility is as scary as adopting keynesian spending, but not the saving...wait a minute.
@AOC @DougHenwood Loving @LHSummers analogy:
#MMT is the far left's Laffer Curve
Supply side #economics was a convenient myth to achieve political goals (tax cuts), promising everyone a free lunch.
Same as #MMT on the demand side. Infinite spending, 0 consequences. Magic!
#MMT is the far left's Laffer Curve
Supply side #economics was a convenient myth to achieve political goals (tax cuts), promising everyone a free lunch.
Same as #MMT on the demand side. Infinite spending, 0 consequences. Magic!
