[ExI] mmt question

[BillK]

On Mon, 13 Feb 2023 at 05:53, spike jones via extropy-chat
<extropy-chat at lists.extropy.org> wrote:
>
> Have we anyone here who is up to speed or has expertise on Modern Monetary Theory?  I have looked into various sources and haven’t found an answer to a question I eventually posed to ChatGPT.  It didn’t really answer.  Here’s the question:
>
> Me:  What happens in modern monetary theory when part of a government accepts it and part of that government rejects it?
> ChatGPT:
> Modern Monetary Theory (MMT) is an economic framework that describes how a sovereign government that issues its own currency can use fiscal policy to achieve full employment and price stability.
>
> If part of a government accepts MMT and part of that government rejects it, then there may be a disagreement about how to approach economic policy. This could lead to political gridlock and a lack of consensus on how to manage the economy. Ultimately, the extent to which MMT is implemented in a given government will depend on the political power dynamics at play, as well as the prevailing economic conditions and priorities of the country.
>
> Can anyone here do better?  It looks to me like if a government, or more specifically a congress in charge of government spending, is split between modern monetary theory accepters and rejectors, it sets up for an epic fail, as the USA is likely to witness shortly.
>
> spike
> _______________________________________________


I can't say I've noticed either of the two large US political parties
wanting to stop deficit spending, except when trying to score points
off the other party.

They said MMT spending wouldn't cause inflation, and for years the
measures of inflation didn't rise. This was because the deficit money
was going into financial assets (which weren't counted as inflation).
So the rich got richer and thought MMT was marvellous.
But now after the COVID handouts and the economic lockdowns, the
deficit money is spreading into everything and the poor are getting
poorer – much poorer.

<https://fee.org/articles/mmt-is-dead-it-must-now-be-buried-for-good/>
Quotes:
MMT Is Dead. It Must Now Be Buried for Good
Weaning the government and the Fed off spending and printing will be a
lengthy and agonizing process. But it needs to happen.
Tuesday, January 3, 2023    David Sukoff

Inflation, as we commonly understand it, had arrived. It was
mathematically pre-ordained, and yet still somehow unexpected.
Historically high. We’re talking 1970s high. Family budget-busting
high. Economic growth-crushing high. And all because of the failure to
loudly ask and understand those two very basic questions: Where does
the money come from, and if the theory actually worked, shouldn’t the
government just spend infinite money?
---------------

BillK