Now is not the time to discuss tax policy. The need presently is to target spending to achieve inclusive relief and produce a V-shaped recovery, unlike the aftermath of the 2008 global financial crisis.
Spending and taxation are different fiscal operations with different purposes, and they should be considered on their own merits rather than unnecessarily linked. Taxation serves several function but none of them involve "paying for" spending.
New York Times — Opinion
Biden Can Go Bigger and Not 'Pay for It' the Old Way
New York Times — Opinion
Biden Can Go Bigger and Not 'Pay for It' the Old Way
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders
“But what happens when it gets harder to find the idle things and people — construction workers, architects, machinery, raw materials and so on — needed to keep pace with an enormous revamp of our nation’s infrastructure?”
ReplyDeleteYo we are already there....
I don't agree with Stephanie Kelton's "industrial policies" which consist of a variety of government organised, rather than free market interventions in the economy.
ReplyDeleteThis is just the old central economic planning versus free market argument. OBVIOUSLY central economic planners can do better than the real world chaos that is the free market if the planners are omniscient and omnopotent. Trouble is that in practice they normally mess things up even more catastrophically than the free market.
Trouble is that in practice they normally mess things up even more catastrophically than the free market.
ReplyDeleteThe US is in the midst of a "test" with China to determine the superiority of system based on managed and unmanaged economies.
No worries though, mate. The Biden administration is not going to go for a managed economy.
The opinion piece is interesting though, since it outlines the MMT view on inflation and it also shows that MMT economists are working to stay ahead of the curve as the Biden administrations policy is being characterized as a "test of MMT," which, of course, it is not. They are clueless.
Taxation serves only one economic function - to make resources, largely people, unemployed so the public sector can get its price when it tries to hire them.
ReplyDeleteAll other uses of taxation are purely ideological in nature rather than just partially, which generally means they would cease if the aim is achieved (once you've bankrupted all the rich people, stopped all the carbon and nobody drinks and smokes no tax is raised).
"which consist of a variety of government organised, rather than free market interventions in the economy. "
ReplyDeleteCorrect. Because free market interventions into the economy are just ideological from a different point of view based on a belief that similarly doesn't bear out in reality any more than the other one. The central planners in large commercial operations similarly lack omniscience and omnipotence and mess things up catastrophically.
If people vote for government programmes, then that is what they want the resources to be used on rather than building another Trumpian hotel and casino.
Uncle Sam can't spend trillions and claim the economy is not "managed".
ReplyDeleteNOTE on Stephanie Kelton on ‘Biden Can Go Bigger and Not 'Pay for It' the Old Way’
ReplyDeleteThe 3-sector Profit Law Q≡(G−T)+(I−S)+Yd states that the greater part of macroeconomic #Profit is actually produced by public deficit-spending/money-creation. Growing public debt guarantees the permanent self-alimentation of the Oligarchy.
The U.S. economy hangs on the state ventilator for its survival
https://axecorg.blogspot.com/2020/07/the-us-economy-hangs-on-state.html
The Profit Law implies Public Deficit = Private Profit. Therefore, more deficit-spending/money-creation will result in a profit explosion. Thank you, Mr. Biden.
Deficit cheerleaders ― the Oligarchy’s useful idiots
https://axecorg.blogspot.com/2019/08/deficit-cheerleaders-oligarchys-useful.html
Egmont Kakarot-Handtke