|
| I understand why some push it, as you said they view it as a blank check to pay for anything. They also tend to not really even understand it from what I have seen. MMT itself gets very fringe in how it intends to fund via monetary policy instead of fiscal. The issuance of debt becomes a monetary tool instead of a fiscal funding tool. There are no mainstream economists that believe this theory could work without nasty side effects to inflation and labor stability. We are pretty far still from implementation of this. MMT theorizes you can offset the inflation / employment volatility from balance sheet debt via tax policy - in practice this would probably add gas to fire during a recession, according to most mainstream economists.
Edit: to clarify for anyone reading who isnt familiar... MMT is a totally different thing than what we are currently doing (as a nation) to pay for programs. Today, we issue debt via bonds sold at auction. MMT states the central bank could monetize this debt directly without going through the current open market operations. I don't like our current fiscal deficits, but I definately don't want to abandon and switch to MMT. The mechanisms in place today are probably fine if politicians could ever grow up and act responsibly.
Edited by reformedbanker 5/5/2024 13:12
| |
|
Modern Monetary Theory and taxes
