Oldie but goodie on MMT and taxation.
Forbes (October 30, 2014)
Taxes Are A Monetary Instrument
Lee Sheppard
ht JLC in the comments
Lee Sheppard, contributing editor of Tax Analysts' Tax Notes, is one of the nation's most widely read and respected tax commentators. Named one of the Global Tax 50 most influential players in international taxation in 2012 by International Tax Review, Sheppard specializes in financial issues and the taxation of multinational corporations. Her articles have included commentary on treaty issues, transfer pricing, European tax developments, and cutting-edge financial issues such as derivatives, hybrid securities, and hedge funds. Sheppard holds a law degree from the Northwestern University School of Law. — New York Times Profile
1 comment:
1. "The federal budget does not have to balance. The numbers by the window do not have to match the numbers by the door. Why? Because the United States has the world’s reserve currency—the petrodollar. It is a fiat currency whose value floats. It is not convertible into gold."
This is wrong, isn't it? The petrodollar may be helpful for other reasons, but from a modern money perspective any free floating, non-convertible currency has these qualities.
2. "The “exorbitant privilege” of the reserve currency—as Francois Mitterand dubbed it—means that the budget need not balance."
It wasn't Mitterand; it was Valery Giscard d'Estaing.
3. "Contrary to the bleating of deficit scolds, we are not leaving debt to future generations. We can always inflate away the value of that debt, and we regularly do that."
The reason that the so-called debt is not an issue is not because it can be inflated away, but because it isn't really a debt, and even it it were a "debt" then it has to be put into perspective by asking whether it is a good or a bad debt and/or comparing it to the asset side of the balance sheet.
4. "The reserve currency is also a burden, because it costs US jobs."
Does it? How do you explain the years of full employment with a reserve currency? Where is the difficulty in creating full employment with a reserve currency?
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