Sunday, February 24, 2019

Matt Bruenig — What’s the Point of Modern Monetary Theory?

Another straw man argument.

Matt Bruenig begins with summarizing what some prominent MMT critics have said and then attacks MMT on that basis. Lame.

At one time, it was prudent strategically to correct erroneous arguments against MMT. It still is when arguments are researched. But otherwise it is a waste of time now. Time can be more productively allocated.

People's Policy Project
What’s the Point of Modern Monetary Theory?
Matt Bruenig


Ramanan said...

He is doing the difficult work in this. Not that his own views are good.

MMTers should say explicitly that tax rates ought to rise.

You think Warren Mosler will say this? No.

Ralph Musgrave said...

Matt Bruenig is clued up. I won't answer all his points here, but his 2nd last para makes a good point. He says:

"If the point of MMT is really about how it would be better to have the fiscal authority manage the price level and the monetary authority manage the debt level — as I thought it might be in 2013 and as Jayadev and Mason argue it is — then you would expect to see a lot more discussion about the competencies and flexibilities of each authority at those tasks. But there is surprisingly little written about such things in these circles."

Quite right. MMTers just say "let's control demand via fiscal stimulus" without bothering to ponder the fact that the people in charge of fiscal stimulus are politicians: people who know less about economics than the average snail.

Positive money (which like MMT advocates overt money creation) advocates the same but deals with the latter "politician" problem. PM's solution is to have a committee of ECONOMISTS decide the size of the fiscal deficit, while politicians retain the right to take strictly POLITICAL decisions like what % of GDP goes to public spending and how that is split between education, law enforcement and so on.

Brian Romanchuk said...

I’m with Tom on this. My prior is that the probability of Matt Bruenig is making bad faith arguments about MMT is 99%. I’m not wasting my time to see if this is in the 1% bin.

Wake me up when someone makes a good faith argument. Historically, that’s happened, but it’s come from other people. The onslaught of bad MMT takes is so huge right now that it makes no sense to even read them. Attempting to respond to all of them is not going to help MMT’s reputation.

Netbacker said...

Tax rates may not need to be necessarily raised. But tax collections will necessarily raise due to increased incomes and increased economic activities.

Noah Way said...

Seperate issues here, structural (MMT) and policy. A coherent understanding of the structure (largely absent until now) creates the possibility of rational policies. In theory, at least.

What we have here is a rejection of the structure to preserve status quo policies, i.e. "we can't afford it", "taxes kill investment", and more of the tired old non-existent trickled-down bullshit. The media is owned by the 0.1%, and they use it to broadcast their ideology. Taxes are the regulator of the economy, not interest rates, which only serve to enrich banksters.

peterc said...
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