Sunday, October 28, 2018

Eric Lonergan — MMT and fiscal rules (part I) – a prologue

Finally, a useful MMT critique.

Philosophy of Money
MMT and fiscal rules (part I) – a prologue
Eric Lonergan

1 comment:

Konrad said...

This is off topic, but I find it slightly annoying.

People who understand MMT know that the US government essentially destroys federal tax revenue upon receipt. Therefore every lottery jackpot sucks money out of the economy.

For instance, two different people won yesterday’s $687.8 million Powerball jackpot. The U.S. government will immediately seize and destroy 25% of that $687.8 million (i.e. will destroy $171.95 million).

That leaves $515.85 million.

In April the U.S. government will seize 37% of that $515.85 million (i.e. $190.86 million) as income taxes.

So, for each $687.8 million Powerball jackpot, the US government takes $362.81 million and destroys it. ($171.95 million + $190.86 million) That money is sucked out of the economy.

This happens because most people insist on believing the lie that the US government needs tax revenue.

(State and local taxes are separate from this.)