Tuesday, February 20, 2018

Bill Mitchell — The ‘tax the rich’ call bestows unwarranted importance on them

Bill answers the main questions about MMT and a progressive agenda to address wealth inequality.

There is no need for a currency issuer to tax to obtain the funds it issues itself.

The reasons that a currency issuer should tax excessive wealth is political, in that wealth conveys political power.

Neoliberalism differs from classical liberalism (laissez-faire) by harnessing government to promoting the interests of capital rather than reducing government involvement in the economy as a matter of principle.

Bill Mitchell – billy blog
The ‘tax the rich’ call bestows unwarranted importance on them
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


Matt Franko said...

"1. Currency-issuing governments are not like households"

This is generally being viewed as an "Over-Valued Idea":


Its a simple declaration from MMT ... ie no science behind it...

AXEC / E.K-H said...

MMT: academic snake oil for the people
Comment on Bill Mitchell on ‘The ‘tax the rich’ call bestows unwarranted importance on them’

MMT is a selection of trite slogans that have NO scientific support of any sort.

MMT’s key message for the people is: “A consequence of the fiat system is that governments that issue their own currencies no longer have to ‘fund’ their spending.” (Mitchell)

True, government can replace taxation and in addition increase spending at any time for any purpose by deficit spending/money creation. This has two effects:
• The household sector = ninety-nine-percenters is taxed in real terms by an imperceptible price hike (NOT inflation). Open taxation turns into stealth taxation, and in real terms NOTHING changes.
• Because Public Deficit = Private Profit, the one-percenters enjoy an immediate profit boost. In addition, part or all of the increased public debt can become a long-term source of interest income depending on whether and how the public debt is consolidated.

The replacement of taxation by deficit spending clearly benefits the one-percenters. The benefit is proportionally greater if the income tax is progressive. To replace progressive taxation by deficit spending is the non-plus-ultra of inverse redistribution.

So, from the standpoint of simple self-interest, the one-percenters and their useful academic/journalistic spokespersons should consistently argue FOR deficit spending and the ninety-nine-percenters and their academic/journalistic spokespersons should consistently argue AGAINST it. This, of course, does not happen in the political realm.

MMTers as champions of deficit spending for the people are in effect agenda pusher for the one-percenters, no matter what they are saying or what they are thinking of themselves.

Bill Mitchell, for example, argues elsewhere: “A rising fiscal deficit is neither good nor bad. It all depends on the saving and spending desires of the non-government sector and the state of capacity utilisation. A rising deficit associated with a growing economy and full employment with stable prices is to be desired.”#1

Bill Mitchell’s mistake/error/fraud lies in the word “non-government sector”. There is NO such thing as the “non-government sector”, there are TWO sectors, the business and the household sector. And the business sector does NOT save. Saving/dissaving is the balance of the household sector, profit/loss is the balance of the business sector. The word profit, though, does not appear once in Bill Mitchell’s analysis. That is too bad because the macroeconomic Profit Law says Public Deficit = Private Profit which means that Bill Mitchell and his academic colleagues ― wittingly or unwittingly does not matter ― argue on behalf of the one-percenters.#2

Whether MMTers are in a state of self-delusion or know full well what they are doing is at anybody’s guess. Objectively, all of MMT is provably false proto-scientific junk.#3

Bill Mitchell is politically consistent. He not only promotes deficit spending but also downplays the idea of taxing the rich and closing their tax havens: “Do we need the rich’s money?” No.

No, because “we”, the ninety-nine percenters, pay for the social goodies that MMTers promise “us” through stealth taxation and transfer the newly printed money, which we do not need, via deficit spending and increased profits directly into “their” tax havens.

No, “we” do not need the rich’s money. The rich need it and Bill Mitchell and the MMTers are pushing their agenda in academia, in the econoblogosphere, and in the social media.#4

Egmont Kakarot-Handtke

#1 billy blog “Oh poor Britain …”

#2 Down with idiocy!

#3 For the full-spectrum refutation of MMT see cross-references

#4 Are MMTers stupid or corrupt or both?