The simple MMT approach.
People also have to understand that taxes are just another sterilisation mechanism. They are particularly important when government has to take over from the private sector to stimulate demand. Higher or lower taxes are needed to keep the correct amount of money circulating through the system.Toward a Leisure Society
Automating Fiscal Policy
Izabella Kaminska
Except the government never has to take over for the "private sector" to "stimulate demand". Anything that follows from this bogus assumption is also bogus.
ReplyDelete"Government" is simply coordination among members of the private sector.
ReplyDeleteThat always occurs on a spectrum ranging from the "Austrian" fraud of Libertarianism (gang warfare, limited to static vs dynamic assets) to the optimal return-on-coordination options available to an Open Democracy.
It's up to an agile electorate to regulate where their efforts fall on that "governance" spectrum.
It's taken Isabella 15 years but, like Helen Keller, MMT precepts are recirculating from her suppressed subconscious?
Is there such a thing as Libertarian Plagiarism? (i.e., no idea exists until they copy & CopyRight it! :( )
THERE IS NO NEED FOR THE GOVERNMENT TO MAKE A PROFIT!!
ReplyDeleteTalk about potential returns on (for?) public purpose.
Right, John,
ReplyDeleteA fiat issuer needn't make a financial profit. The whole point is to make a REAL profit, in the form of national capabilities growth and accelerated AdaptiveRate.
With those REAL profits, an issuer can always express as much fiat as it desires.
Cost of capital to the issuer is zero, so no premium is needed.
ReplyDelete"They are particularly important when government has to take over from the private sector to stimulate demand."
ReplyDeleteThis to me is misleading framing...without government spending demand would be practically non-existent...output would be an order-of-magnitude lower than what we call normal.
Even the enlightened commentators go out of their way to shoot themselves in their own foot.
It must be dangerous to speak the truth...that capitalism is driven by government just as socialism is...
The main difference is that capitalism subs-out the means of production and allows profit-taking.
I think her main point is that fiscal stimulus is almost impossible because of politicians. She is making an assumption that the reader realizes government has the ability to smooth things over during an economic downturn. But politics gets in they way.
ReplyDeleteIzzie works for FT so she has to come from the capitalist view. She's just voicing a pipe dream that she knows would never happen.
In my recent post "From Independent Central Banking to Democratic Public Finance", I proposed, among other things, moving to a system of flexible tax ranges that can be adjusted rapidly by fiscal authorities on a legislatively pre-approved plan as one technique for countercyclical stabilization.
ReplyDeleteHowever, I would take issue with the idea that our current unemployment crisis is fundamentally a monetary phenomenon that can be fixed simply by pumping more money into the system. That is part of the problem, but I think a more important problem is extreme concentration in the ownership of capital.
Yes, that is my analysis, too, Dan. Offsetting changes saving desire with fiscal policy is a temporary fix. But the system needs an overhaul. "Capitalism" doesn't work as advertised. We need a global economic system that is more efficient, effective, fair, and sustainable pronto. Time is closing in.
ReplyDeletebut I think a more important problem is extreme concentration in the ownership of capital. Dan K
ReplyDeleteWhat else would you expect of a money system based on usury for stolen purchasing power and which depends on heavy government privilege?
OTOH, without the government enforced/backed "credit" cartel, corporations would be forced by competitive pressure to use their own shares as private money or at least be forced to pay honest interest rates for their employees' and the general population's fiat purchasing power.
"I would take issue with the idea that our current unemployment crisis is fundamentally a monetary phenomenon"
ReplyDeleteInsufficient liquidity is fundamentally a monetary phenomenon…
…accumulation of financial wealth by the few is a natural characteristic of a capitalistic system…that can only be reversed through government-applied resets, i.e. higher taxation (much higher) on that particular group. To change the dynamic wealth accumulation must have limits, otherwise we have a winner-take-all system.
Our problem of course is that as a country we believe that the "producers" are those very same parasites.
It will take a lot of politics to change that. Most of us won't live to see it.
"Except the government never has to take over for the "private sector" to "stimulate demand".
ReplyDeleteRight. No problems. no problems ever, except for those created by the government. Absent the government, the market economy is absolutely perfect and infallible and there are simply no problems ever. Even if there are actually problems, there aren't really because by definition there can't be. Government can only ever make things worse. No problems. Ever.
That's called ideology, Bob.