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57 sats \ 1 reply \ @SimpleStacker 10h \ on: How MMT Advocates View Money and the State econ
You can learn a lot about a group by listening to the introductions to their speeches. And in one speech by Stephanie Kelton, she started with the idea that governments don't need to "balance their budgets the way households do," because households can't simply print money to fulfill their obligations, but governments can. THerefore, the political analogies that debt hawks use about balancing budgets doesn't need to be listened to.
She said this as if it were some deep insight. Then, she went on to admit that the main constraint against money printing is inflation. She just so happens to think that we aren't at excess capacity and so more printing won't lead to inflation.
Based on this, I realized that my main disagreements with MMT are:
- Whether government spending even leads to any good in the first case (which she implicitly assumes... and I would disagree for the most part)
- How close we are to the inflationary constraint
Yes, the politicians are nothing more than clowns making jokes! They haven’t even gotten around to admitting that everything the state spends is a net negative to the economy because they have to take the money out of the economy before they can spend it. If we used a true measure of the economy, how many bombs and missiles would consumers prefer to buy? How many new F35 fighters that are built to fall out of the sky would they want?
I think we are getting closer to the point where hyperinflation takes off. You know, Milton Friedman once said that the true measure of inflation was how much the state was spending and nothing else. Unless Trump can do what Milei has done in Argentina, I don’t think inflation will be abated.
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