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Mr. Hickey:I really have to disagree about tax cuts for the rich helping the economy. I realize that some - maybe all - MMT proponents claim that it makes no difference from where the budget deficit comes, but I will never believe that giving the rich tax cuts so they can put their excess money into Treasuries and local debt is of any benefit to anyone other than the rich. In my mind this falling off a cliff threat if the rich don't get their tax cuts is simply a ridiculous threat and I am ignoring it. By the way, I have nothing against Mr. Roche, but I really don't believe he is the next John Maynard Keynes and don't believe he has nearly the understanding of MMT as Professor Mitchell. Also, I am not an economist and I haven't read much about JMK, but I really don't believe that he advocated tax cuts for the rich as a solution to the depression. Please inform me on the subject.
GLH: "I realize that some - maybe all - MMT proponents claim that it makes no difference from where the budget deficit comes"I don't think that this is the case. They are well aware of multiplier effects and advocate targeted fiscal policy, which is one of the advantages of fiscal over monetary policy according to MMT economists.MMT economists are concerned with affecting effective demand through the discretion that govern has over the injection and withdrawal of NFA. While macro prescribes the amount of the govt fiscal balance relative to non-govt saving desire, the decisions about implementing fiscal policy include micro causes and effects. Tax cuts for the wealthy don't carry a lower multiplier in comparison with other ways to inject NFA, so it would be unlikely that MMT economists would suggest that course.
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