Does anyone have any good resources on this? Or just want to explain it in their own words? Trying to understand it and its angle on inflation.
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Modern Monetary Theory (MMT)
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Last: 2 yr ago by evan_aggie
The cursory reading done through the cryptocircles has hardened my cryptoanarchistic tendencies.
I'll see what I can find.
MMT -thesis
Bitcoin - antithesis
I'll see what I can find.
MMT -thesis
Bitcoin - antithesis
good question backroad.ihave nothing to contribute but would really like to hear some of the responses
MMT is a view that government can control via fiscal policy with spending and taxation. Spending creates jobs the private sector would not, as private sector views marginal jobs as a cost. Thus a MMT view is full employment is o ou achieved with gov't spending.
If full employment is achieved and all capital is being effectively used, inflation can be triggered but can be controlled with higher taxation.
I think it is insane.
If full employment is achieved and all capital is being effectively used, inflation can be triggered but can be controlled with higher taxation.
I think it is insane.
Mostly Foggy Recollection
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MMT is a several hundred year old practice rebranded.
This MMT, rule of infinity, is trying to keep the plates spinning.
It's the far Lefts war on "inequity". It's a illiberal stratagem to usher in an all out war on the middle class. It is a great transference of wealth to those that have.
The left's ideologues will eat it up despite being ignorant to the financial carnage it will cause down the road.
Equal Opportunity mediocrity!
BUT IT WILL WORK THIS TIME, they say.
Those of us who remove emotion from decision making and use strict logic realize how evil MMT is.
This MMT, rule of infinity, is trying to keep the plates spinning.
It's the far Lefts war on "inequity". It's a illiberal stratagem to usher in an all out war on the middle class. It is a great transference of wealth to those that have.
The left's ideologues will eat it up despite being ignorant to the financial carnage it will cause down the road.
Equal Opportunity mediocrity!
BUT IT WILL WORK THIS TIME, they say.
Those of us who remove emotion from decision making and use strict logic realize how evil MMT is.
keynesian garbage. read some mises or hayek instead.
It works until it catastrophically doesn't
This is a simplistic version but basically federal budgets are worthless and we can print as much money as possible... as long as we maximize employment. If we can keep the unemployment level really low, it will help curb inflation. The Fed will buy treasuries to the end of time as long as employment is good.
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Simpler post and spot on.
One of my favorite economists is Daniel Lacalle. He has hours of discussion on MMT you can find on the web, but his simple response is MMT is Socialism and it's byproduct is Stagflation.
One of my favorite economists is Daniel Lacalle. He has hours of discussion on MMT you can find on the web, but his simple response is MMT is Socialism and it's byproduct is Stagflation.
It's a theory rationalization that debt doesn't have to be paid back and you can print money forever without consequence. It means the budget never has to be balanced.
It's a mental trick to help politicians sleep at night.
It's a mental trick to help politicians sleep at night.
Casey TableTennis said:
MMT is a view that government can control via fiscal policy with spending and taxation. Spending creates jobs the private sector would not, as private sector views marginal jobs as a cost. Thus a MMT view is full employment is o ou achieved with gov't spending.
If full employment is achieved and all capital is being effectively used, inflation can be triggered but can be controlled with higher taxation.
I think it is insane.
Well put.
To put it another way... brrrrrrr!
Casey TableTennis said:
MMT is a view that government can control via fiscal policy with spending and taxation. Spending creates jobs the private sector would not, as private sector views marginal jobs as a cost. Thus a MMT view is full employment is o ou achieved with gov't spending.
If full employment is achieved and all capital is being effectively used, inflation can be triggered but can be controlled with higher taxation.
I think it is insane.
So Keynesian economics?
RedAssAg
Class of '94
Born & Raised in Texas, lovin Colorado!!
Class of '94
Born & Raised in Texas, lovin Colorado!!
Redassag94 said:Casey TableTennis said:
MMT is a view that government can control via fiscal policy with spending and taxation. Spending creates jobs the private sector would not, as private sector views marginal jobs as a cost. Thus a MMT view is full employment is o ou achieved with gov't spending.
If full employment is achieved and all capital is being effectively used, inflation can be triggered but can be controlled with higher taxation.
I think it is insane.
So Keynesian economics?
I haven't looked at this in a couple of decades, so pardon me if I'm rusty on this point. I believe Keynesians would view this a a temporary condition that can exist for a period of time, vs MMTs viewing this as a permanent state. If a correct assertion, that can't be stated strongly enough as a point of emphasis and critical difference.
Also, MMTs desire a near-zero rate environment (no kidding), where I don't think Keynesians had a long-term view on where rates SHOULD be, as they were still used as a lever in that economic model.
Simply put, Keynesian economics was already viewed as a flawed model/theory and MMT is a tremendously exaggerated cousin, if even in the same family, in my view.
MMT: As long as you control inflation, you can print as much money as you want.
I suspect printing infinite money is an exaggeration. But IIR, whereas 100% debt/GDP used to be considered the highest safe point for a nation's economy, they now believe it's more like 200%. Japan is the main (and only) place they can point to for this being acceptable.
Communist Capital vs Woke Capital [MMT] vs Crypto Capital
[Click the tweet, good thread on the subject]
The future is Communist Capital vs Woke Capital vs Crypto Capital.
— balajis.com (@balajis) October 24, 2020
[Click the tweet, good thread on the subject]
Deficit don't matter, until they do, and then they REALLY matter!!
The proponents of this say you use taxes to control inflation but think about it. You can't just tax the rich because the rich aren't buying up all of the consumer goods. So you really have to tax the middle class.
MMT zealots think that globalization grows the economy the best and you just redistribute to control inequity. They spend more time talking about race than they do economics which tells you everything you need to know about this.
MMT zealots think that globalization grows the economy the best and you just redistribute to control inequity. They spend more time talking about race than they do economics which tells you everything you need to know about this.
I would echo what folks have said up-thread ...
Typically when you hear MMT it is shorthand for a set of ideas and arguments based on some mental models dealing with the limits of government spending. The more academic inclined proponents invariably argue that a country that issues its own currency is only limited by inflation, can never default on its obligations, doesn't have to tax or borrow to spend, etc. Moreover, they contend any spending limits are much less constraining than are generally conceived and inflation is far away.
The caricature exchange goes something like:
MMT proponent: We need to have UBI, free health care, free college, etc.
Skeptical listener: Who is going to pay for all that?
MMT proponent: We don't have to worry about that, because MMT.
Skeptical listener: What?
MMT proponent: Either you don't get it or you don't want to help people.
The point is despite the academic trappings, MMT is typically evoked as a rationale for policy rather than something that arose from research to understand or explain how economies and monetary systems work. Hence, I believe it is valid to question motivations and see it in political terms of folks advocating expansive government, central planning, Socialism, etc.
Note that doesn't say much about the ideas, arguments, and models that make up the "Theory". The difficulty here is the topic tends spin off into book length tomes. Just glance at the Wikipedia page to get a feel for all the noise.
Even so, the simplest critique is to suggest there is nothing new under the sun. Accordingly, when you strip away all the bells and whistles and obfuscations of the proponents they aren't offering anything new.
The system they propose only requires a country have a government issued currency and the authority to tax
and spend as it desires.
The key "innovation" is they don't intend to use Treasury borrowing to balance the budget. All spending is financed by "money printing". In a technical sense they are taking the functions of the Central Bank and subsuming them under the Treasury.
This type system has been available to governments, regimes, and empires for centuries. Yet no one ever cites an example of a golden age of a country enjoying the promised utopia of Fairness and Prosperity by implementing this type of system.
An irony is the word "Modern" in the name is actually accurate. The Modern era, mostly mid 20th century, was characterized by the promise that science, technology, and enlightened bureaucracy/government would fix our World. Few argue that promise was realized. Hence, we are said to have moved on to a Post-Modern age. In this sense, one can argue MMT is a relic of that bygone Modern era.
It persists because many can't give up on the idea that Technocratic solutions will eventually deliver. Alternatively, I have heard some say, "There has to be a better way." Aspirations plus necessity equals political opportunity.
A more careful criticism is also possible. This involves pointing out any number of well known issues and trade-offs and arguing these are not adequately addressed by the MMT advocates.
Things like the following are common points of contention:
I would suggest many of the proponents, particularly those in academia do understand this stuff. The cynical might suggest they find the Political ends so desirable they are willing to engage in dodgy Economics reasoning to advance their cause. <insert a shocked face emoji>
At this point it is almost a cliche to reference a scene from Casablanca. "I'm shocked, shocked to find that gambling is going on here".
Needless to say I don't believe MMT can deliver on its promises. But for many that isn't the point. The real issues are ultimately Politics and who is in control. Alas, if you thought this was TLDR, you won't be interested in that discussion. :-)
Typically when you hear MMT it is shorthand for a set of ideas and arguments based on some mental models dealing with the limits of government spending. The more academic inclined proponents invariably argue that a country that issues its own currency is only limited by inflation, can never default on its obligations, doesn't have to tax or borrow to spend, etc. Moreover, they contend any spending limits are much less constraining than are generally conceived and inflation is far away.
The caricature exchange goes something like:
MMT proponent: We need to have UBI, free health care, free college, etc.
Skeptical listener: Who is going to pay for all that?
MMT proponent: We don't have to worry about that, because MMT.
Skeptical listener: What?
MMT proponent: Either you don't get it or you don't want to help people.
The point is despite the academic trappings, MMT is typically evoked as a rationale for policy rather than something that arose from research to understand or explain how economies and monetary systems work. Hence, I believe it is valid to question motivations and see it in political terms of folks advocating expansive government, central planning, Socialism, etc.
Note that doesn't say much about the ideas, arguments, and models that make up the "Theory". The difficulty here is the topic tends spin off into book length tomes. Just glance at the Wikipedia page to get a feel for all the noise.
Even so, the simplest critique is to suggest there is nothing new under the sun. Accordingly, when you strip away all the bells and whistles and obfuscations of the proponents they aren't offering anything new.
The system they propose only requires a country have a government issued currency and the authority to tax
and spend as it desires.
The key "innovation" is they don't intend to use Treasury borrowing to balance the budget. All spending is financed by "money printing". In a technical sense they are taking the functions of the Central Bank and subsuming them under the Treasury.
This type system has been available to governments, regimes, and empires for centuries. Yet no one ever cites an example of a golden age of a country enjoying the promised utopia of Fairness and Prosperity by implementing this type of system.
An irony is the word "Modern" in the name is actually accurate. The Modern era, mostly mid 20th century, was characterized by the promise that science, technology, and enlightened bureaucracy/government would fix our World. Few argue that promise was realized. Hence, we are said to have moved on to a Post-Modern age. In this sense, one can argue MMT is a relic of that bygone Modern era.
It persists because many can't give up on the idea that Technocratic solutions will eventually deliver. Alternatively, I have heard some say, "There has to be a better way." Aspirations plus necessity equals political opportunity.
A more careful criticism is also possible. This involves pointing out any number of well known issues and trade-offs and arguing these are not adequately addressed by the MMT advocates.
Things like the following are common points of contention:
- the inevitable political opposition to expansive government and central planning,
- the lack of a uniform price level makes controlling inflation problematic,
- controlling inflation in the MMT system involves some combination of cutting spending or raising taxes, that always devolves to political power struggles not achieving noble goals,
- all kinds of implications for FX are typically ignored,
- the demand for private banking and non-government controlled credit allocation continues to exist,
- deliberate non-productive investment is a feature not a bug in the model despite impacts for a country's productivity and competitiveness,
- the economics of trade always strains central planned and controlled economies
I would suggest many of the proponents, particularly those in academia do understand this stuff. The cynical might suggest they find the Political ends so desirable they are willing to engage in dodgy Economics reasoning to advance their cause. <insert a shocked face emoji>
At this point it is almost a cliche to reference a scene from Casablanca. "I'm shocked, shocked to find that gambling is going on here".
Needless to say I don't believe MMT can deliver on its promises. But for many that isn't the point. The real issues are ultimately Politics and who is in control. Alas, if you thought this was TLDR, you won't be interested in that discussion. :-)
Very simply MMT proponents believe that every dollar spent = greater than $1 in economic growth. They Increase spending to increase economic growth. Pay back that spending with taxes that are generated by that future growth. Taxes are viewed as a lever to keep inflation in check - not a way to fund government spending because spending is theoretically unlimited.
Janet Yellen did an interview explaining the details on a podcast called Macro voices several months ago. I highly recommend it.
Janet Yellen did an interview explaining the details on a podcast called Macro voices several months ago. I highly recommend it.
Excellent insights. I quote this one because as much as I despise shareholders undermining the long-term needs of companies, I even more despise throwing money at companies without any actual justification. Apple, Tesla, Amazon, etc. Or look at the P/E ratio of the DJIA. At some point companies realize that they no longer even have to innovate or take risks. Just avoid catastrophes, and watch the market cap grow.Quote:
- deliberate non-productive investment is a feature not a bug in the model despite impacts for a country's productivity and competitiveness,
94chem,
That, sir, was the greatest post in the history of TexAgs. I salute you. -- Dough
That, sir, was the greatest post in the history of TexAgs. I salute you. -- Dough
Most of what you are hearing on this thread is MMT run through the lens of right wing politics. People are equating the goals of the liberal wing with MMT.
The economic argument for MMT is that countries that can issue debt IN THEIR OWN CURRANCY can continue to print money as needed so long as inflation is controlled. The risk of inflation is the Achilles heal for MMT. Inflation does not come from printing money, but rather from the money supply increasing greater than production (see lumber 2021).
The evidence for MMT is mostly looking back at the last 40 years of very high deficit spending for the USA, UK, and Japan and noticing that a massive increase in money supply did not equal inflation, and there has been no consequence of this massive deficit spending.
The best primer I've heard is from the "Money for the Rest of US" podcast, which I'd challenge anyone to find a particular political slant (though I'm sure some will).
https://moneyfortherestofus.com/241-budget-deficits-matter-modern-monetary-theory-explained/https://moneyfortherestofus.com/241-budget-deficits-matter-modern-monetary-theory-explained/
The economic argument for MMT is that countries that can issue debt IN THEIR OWN CURRANCY can continue to print money as needed so long as inflation is controlled. The risk of inflation is the Achilles heal for MMT. Inflation does not come from printing money, but rather from the money supply increasing greater than production (see lumber 2021).
The evidence for MMT is mostly looking back at the last 40 years of very high deficit spending for the USA, UK, and Japan and noticing that a massive increase in money supply did not equal inflation, and there has been no consequence of this massive deficit spending.
The best primer I've heard is from the "Money for the Rest of US" podcast, which I'd challenge anyone to find a particular political slant (though I'm sure some will).
https://moneyfortherestofus.com/241-budget-deficits-matter-modern-monetary-theory-explained/https://moneyfortherestofus.com/241-budget-deficits-matter-modern-monetary-theory-explained/
and once the taxes get put into the big black box, magically some politicians get wealthier.Oldag2020 said:
Very simply MMT proponents believe that every dollar spent = greater than $1 in economic growth. They Increase spending to increase economic growth. Pay back that spending with taxes that are generated by that future growth. Taxes are viewed as a lever to keep inflation in check - not a way to fund government spending because spending is theoretically unlimited.
Janet Yellen did an interview explaining the details on a podcast called Macro voices several months ago. I highly recommend it.
politicians ALWAYS get wealthier.administrative errors said:and once the taxes get put into the big black box, magically some politicians get wealthier.Oldag2020 said:
Very simply MMT proponents believe that every dollar spent = greater than $1 in economic growth. They Increase spending to increase economic growth. Pay back that spending with taxes that are generated by that future growth. Taxes are viewed as a lever to keep inflation in check - not a way to fund government spending because spending is theoretically unlimited.
Janet Yellen did an interview explaining the details on a podcast called Macro voices several months ago. I highly recommend it.
Sockity McSockinsock said:
Most of what you are hearing on this thread is MMT run through the lens of right wing politics. People are equating the goals of the liberal wing with MMT.
The economic argument for MMT is that countries that can issue debt IN THEIR OWN CURRANCY can continue to print money as needed so long as inflation is controlled. The risk of inflation is the Achilles heal for MMT. Inflation does not come from printing money, but rather from the money supply increasing greater than production (see lumber 2021).
The evidence for MMT is mostly looking back at the last 40 years of very high deficit spending for the USA, UK, and Japan and noticing that a massive increase in money supply did not equal inflation, and there has been no consequence of this massive deficit spending.
The best primer I've heard is from the "Money for the Rest of US" podcast, which I'd challenge anyone to find a particular political slant (though I'm sure some will).
https://moneyfortherestofus.com/241-budget-deficits-matter-modern-monetary-theory-explained/https://moneyfortherestofus.com/241-budget-deficits-matter-modern-monetary-theory-explained/
To dumb this down, basically i may think the best way to manage my budget is apply Dave Ramsay's views on debt, while you may think debt is healthy if the risk is low enough. MMT is applying that second viewpoint, but on a macroeconomic level?
It's really not that. That may be how it has been explained to you, but that is not the theory. Listen to the podcast above. You may not agree with it (I'm not sure how much I agree with), but at least you be arguing with the correct theory.Champ Bailey said:
To dumb this down, basically i may think the best way to manage my budget is apply Dave Ramsay's views on debt, while you may think debt is healthy if the risk is low enough. MMT is applying that second viewpoint, but on a macroeconomic level?
I've heard some economists say that we really don't know why that we've been able to avoid inflation. It's possible that technology, globalization, etc has been enough to keep the supply and demand balanced enough.Quote:
The evidence for MMT is mostly looking back at the last 40 years of very high deficit spending for the USA, UK, and Japan and noticing that a massive increase in money supply did not equal inflation, and there has been no consequence of this massive deficit spending.
Economists agree that globalization is ideal to raise GDP both in rich and developing nations, but it increases income inequality. An example is the departure of a lot of American manufacturing jobs. Their solution is to tax and spend to support low and medium income people.
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So I listened to a pro and anti MMT podcast and read some pro and anti articles. Please note I'm firmly in the Friedman camp, and nothing has changed my mind regarding this centuries old strategy that has been re-branded as MMT.
When governments spend, they acquire real resources that would otherwise have been used by private citizenry/entities. That has to impact the real economy down the line.
1) When spending is funded by taxation, it takes spending power from those taxpayers.
2) When its funded by borrowing, it takes investment out of the private sector.
3) And when its funded through inflation, it takes real spending power evenly from all taxpayers. This has to happen, unless the economy is in a large recession.
MMT barely touches on these real issues, and without doing so its hard to see what it accomplishes.
It's very clear there are some common qualities in MMT proponents:
1) belief in the government as the largest and most important part of the economy
2) an erotic worship of Keynes
3) a patronizing "bless you child" for those that don't get it or a 'whataboutery' moving of the goalpost for those that do get it and call them on their bull****
4) An extreme and unhealthy hatred of unregulated crypto. Now, show them a CBDC and an elimination of competing crypto, and they'll fawn.
5) Most importantly, a devotion to the rule of infinity and unlimited printing to achieve full employment
6) the MMT crowd not only loves how big government is, but would have no problem with it being much larger (See modern Europe also see that there is no investment into and no innovation coming out of Europe)
It's very clear to me that MMT is an academic angle to "inequity" because it hasn't worked in the past in its other names (I call it "CPT" or Central Planning Theory that goes back to the Romans) they are sure that if the globe adopts it and puts the gas pedal down, IT WILL WORK THIS TIME BY GOD. Except this time, the history books will be written by the academics supporting this and any discussion on the matter will be struck down as disloyal to the statist cause.
It's a post Modern economic movement to enslave the plebesz.
When governments spend, they acquire real resources that would otherwise have been used by private citizenry/entities. That has to impact the real economy down the line.
1) When spending is funded by taxation, it takes spending power from those taxpayers.
2) When its funded by borrowing, it takes investment out of the private sector.
3) And when its funded through inflation, it takes real spending power evenly from all taxpayers. This has to happen, unless the economy is in a large recession.
MMT barely touches on these real issues, and without doing so its hard to see what it accomplishes.
It's very clear there are some common qualities in MMT proponents:
1) belief in the government as the largest and most important part of the economy
2) an erotic worship of Keynes
3) a patronizing "bless you child" for those that don't get it or a 'whataboutery' moving of the goalpost for those that do get it and call them on their bull****
4) An extreme and unhealthy hatred of unregulated crypto. Now, show them a CBDC and an elimination of competing crypto, and they'll fawn.
5) Most importantly, a devotion to the rule of infinity and unlimited printing to achieve full employment
6) the MMT crowd not only loves how big government is, but would have no problem with it being much larger (See modern Europe also see that there is no investment into and no innovation coming out of Europe)
It's very clear to me that MMT is an academic angle to "inequity" because it hasn't worked in the past in its other names (I call it "CPT" or Central Planning Theory that goes back to the Romans) they are sure that if the globe adopts it and puts the gas pedal down, IT WILL WORK THIS TIME BY GOD. Except this time, the history books will be written by the academics supporting this and any discussion on the matter will be struck down as disloyal to the statist cause.
It's a post Modern economic movement to enslave the plebesz.
Like more and more issues, I see who the proponents are and you start to see a pattern.
Like, I like the idea of some aspects of MMT. But it's never about the process and refining it to find the best answer. You have to go in and destroy any competing theories or it doesn't work. You can take that and shove it.
Like, I like the idea of some aspects of MMT. But it's never about the process and refining it to find the best answer. You have to go in and destroy any competing theories or it doesn't work. You can take that and shove it.
Oldag2020 said:
Very simply MMT proponents believe that every dollar spent = greater than $1 in economic growth. They Increase spending to increase economic growth. Pay back that spending with taxes that are generated by that future growth. Taxes are viewed as a lever to keep inflation in check - not a way to fund government spending because spending is theoretically unlimited.
Janet Yellen did an interview explaining the details on a podcast called Macro voices several months ago. I highly recommend it.
Seems like the underlying requirement is that our population continues to grow as well. That may not happen except for massive immigration.
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