"We are bankrupt" is out, "inflation" in. Good to see that the debate has shifted.
This turn shifts the debate to being about something that is an actual constraint rather than something that is imaginary and erroneous.
There is an inflation constraint, and one of the problems is the lack of a theory of inflation beyond a conceptual model, that is, that the constraint on increasing purchasing power is the ability to meet increased demand for real goods.
More technically, it's about measuring the output gap. But this is not an observable and needs to be estimated. There is no agreement on how to do that accurately enough to formulate policy with precision.
The cautious solution is to err on the "safe" side, which is also an estimate.
The MMT solution is to meet real needs for real resources and to take action on the financial side as the need arises to address incipient inflation. The level of employment is a good gauge.
Presently, the US needs relief rather than stimulus. But that relief has also to be targeted to where it is needed to be relief. Trickle down won't cut it.
Los Angeles Times
Column: Biden’s $1.9-trillion big spend is a big bet on modern economic theory
Virgnia Heffernan
1 comment:
As long as inflation is ethically produced (e.g. a Citizen's Dividend) and not extreme then who should care?
But the MMT School is not interested in ethics, is it? But for INCREASED privileges for banks and wage slavery for their victims.
The MMT School's concern for inflation is largely because they know it is NOT a result of ethical money (fiat and bank deposit) creation and thus likely to produce social unrest. As well as disproportionately reduce the purchasing power of rich fiat hoarders.
Also, the MMT plan to deal with price inflation is apparently to tax the non-rich since the rich don't consume enough to matter. That will go over like a lead balloon ...
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