There was an unedifying and fairly undignified war on Twitter recently about whether Modern Monetary Theory (MMT) economics advocate using taxes to deal with inflation. Like all these Twitter ‘debates’, the opening proposition was a ‘gotcha’ attempt that was correct from one angle but then missed the point when it was applied to whether MMT is a valid framework or not. The responses from the MMT ‘activists’ were also overly defensive and reflected the fact that they had fallen for the framing trap presented by the antagonist. In this blog post, I want to clarify the MMT position on the use of taxes and inflation policy. What you will learn is that both positions presented in that Twitter war were largely erroneous, and, conflated concepts, either knowingly (probably not) or unknowingly, to leave a muddy mess. As the cloud became thicker, the ‘debate’ descended, as all these Twitter exchanges seem to, into unhelpful accusations of racial insult, claims of ignorance and stupidity, and worse. Not very helpful....Bill Mitchell – billy blog
Taxation is an indispensable anti-inflation policy tool in Modern Monetary Theory
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
34 comments:
Nice to see Bill make this clear.
There's way too much drift away from the buffer stock theory in MMT. What some people are calling MMT is indistinguishable from standard Post Keynesianism.
Joe Biden et al. are talking about a gas tax holiday. Would that be anti-inflationary?
Taxes are at record levels right now and shrinking the deficit FAST, but it's not doing much to rein in inflation. Sanctions. Supply chain, etc.
Observing "capitalist" politicians as they beg Big Oil to increase supply... priceless.
Without want to put too fine a point on it, unemployment is too low to allow stable prices at present.
There has been a shift in the terms of trade, but nobody wants to talk about who gets to use less of the scarce stuff.
The pass the parcel will carry on until that discussion is had - or unemployment is high enough that the unemployed take the hit.
Joe Biden et al. are talking about a gas tax holiday. Would that be anti-inflationary?
Scott Sumner explains the effect of that here:
Killing 4 birds with one stone
David Henderson comments on Scott Sumner's article and adds a fifth bird.
Killing a 5th, and Big, Bird
“ there is a tendency for MMT activists to conflate their political agendas with the MMT framework of analysis.”
lol that is like everyone there…
Everyone there is a HIGHLY partisan Democrat…
Hence the current "Modern Donkey Theory" jibes
"The net global price of oil rises, helping to finance Putin’s war."
I wish somebody would debunk this one.
Putin doesn't care about the price of oil. He has all the oil in the world at cost.
“Modern Donkey Theory”… good one might have to steal that one.,,,😂
Putin monetarist Neil:
https://twitter.com/deitaone/status/1537783978597441537?s=21&t=pncgPeAhRKHzD_l6ySSV2w
Larry Summers advising both Biden and Putin..
“ These Twitter exchanges are incredibly unproductive.
Twitter is not the forum for having debates and using it for that purpose usually ends in grief as it did this week.
I think the MMT activists who get roped into these trifling exchanges, thinking they are defending some verity, usually end up undermining our educational mission.
The fact the exchanges also typically end up in name calling, personal accusations and worse, just reinforces that point and opens the MMT side up to accusations of arrogance and defensiveness.
Anyway, I wish those who were interested in our work avoided these sorts of interchanges.”
😂 he’s describing the whole dialogic method that the Art Degree side solely relies upon to educate…
If you don’t have that then what do you got? Nothing..,
Twitter is not an educational venue. Activists shouldn't be wasting their time there.
p.s. Modern Jackass Theory is widely accepted in working class circles.
Twitter a modern day Aereopagus…
This is how it works… people observe the dialog and are supposed to learn from the exchange…
And not the ones doing the dialog but rather the ones observing it…
It doesn't work. What I've observed on Twitter is stultifying.
You’re mixing methodologies…
Their methodology doesn’t include testing so you can’t say “it doesn’t work”…
You would have to test for efficacy to be able to say that..
No testing… just dialog…
You said it works, yet observers don't learn anything... apart from hurling insults.
Twitter is rotting your brain, Matt.
Twitter was harming Kaivey's health.
I’m “receive only” on Twitter.. I find it VERY efficient way of obtaining information if you follow the right people…
“ You said it works”
Not what I meant ,, should maybe say “that’s how it operates”…
If you are science trained you would look at it and cinclude it doesn’t work.. For material matters… our numismatic system is an Accounting system for our material systems.,,
Look at this current brouhaha we’re having on the abortion issue., this is no place for science…
Thing is you don’t see Science people trying to get their methodology involved in the abortion issue but we have these unqualified Art Degree morons dumb mother fuckers butting in to our technical matters ALL THE FUCKING TIME…
“Out of money!” … “banks lend out the reserves!… “the icebergs are all going to melt and the water is going to come up!”… “man evolved from the apes by random chance!”…
Etc…
These Art degree morons listen to a 13 year old girl with cognitive deficiencies who never even passed high school Chem 01…
Here:
https://en.wikipedia.org/wiki/Agora
“ The agora was the center of the athletic, artistic, business, social, spiritual and political life in the city.[”
These Art degree people don’t even support their own methodology…
Bill here: “ Twitter is not the forum for having debates”
lol where is it supposed to be?
He’s lost it…. Really seems lost… anchorless… doesn’t even support his own methodology… I feel bad for him he’s a really good person…
Did the Agora feature chimpanzees flinging their excrement at each other?
Academics frequent Twitter about as often as they do Reddit or 4Chan.
Abortion is definitely not a scientific debate.
1. If you're opposed to abortion, don't get one.
2. If you're opposed to abortion and are a doctor, don't perform one.
3. If you're not the person seeking an abortion or performing one, mind your own business.
I don't come here often since it's a very unwelcoming and generally arrogant site. Since the business news shows are throwing MMT in your face as inflation destroys lives and decimating fortunes (it's undeniable). Where does MMT go now? Its weakness as a monetary posture is showing. Seems MMT is in joke status...
Orthodox macroeconomic policies will be implemented, and MMT will leave the news cycle.
It just keeps doing the same thing they’ve always said : if govt increases spending into a supply collapse (eg Zimbabwe) you get “inflation!”..
But they’re not reminding anyone of this right now because it conflicts with the partisan Democrat political narrative…
They are NOT scientists they all have Art Degrees… and are all up the ass of Democrats…
Getting decimated in November is the Dem political narrative. I like that narrative.
Couldn't get MMT or a job guarantee accepted... but did get rid of the Democrats.
Shitty consolation prize, but beggars can't be choosy.
Trump actually started it in 2020 with his broad fiscal transfers… instead of a policy that was strictly compensatory…
Democrats then had to top him then in 2021 which went over the top…
But Trump actually started it.., established the precedent…
Trump also mumbled something that may have had basis in MMT... and was told to shut up about it.
So he shut up and just did it.
Well if Trump started it then you can’t blame MMT because the MMT people aren’t signed up with the GOP or Trump…
They blame MMT like they blame Putin.
Putin = Bad
MMT = Inflation
Usually accompanied with a smug chuckle that could've been made by one of the characters on Beavis & Butthead.
They can get away with this because there is no public understanding of Russia, or inflation.
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