I loved the way this article framed the issue so as to exclude some of the more egregious issues with MMT. I’ll just mention a few of them:
1) Deficit spending has so far led to little or no inflation? Seriously? Do you have kids in college? Have you been to the emergency room lately? How about the grocery store? Checked out the price of a Ford F-150 this model year? How much of the S&P 500 does your 401K contribution buy you these days? Are you living on a fixed income? The contortions the BLS goes through to keep the year-over-year increase in the consumer price index in single digits are mind-boggling: imputations, substitutions, heuristics — every one of which just coincidentally happens to reduce the official rate of increase. By any measure that makes sense to the average American, the actual rate of inflation is at least twice what the increase in CPI indicates. The “Big Mac Index” shows pretty clearly how the game is being played:
2) The MMT solution to increased inflation is higher taxes? Really? So what they’re saying is when taxpayers find themselves getting hosed by higher prices, the solution is to hose them twice over by raising their taxes. And we’re supposed to be OK with that?
3) So MMT says it’s OK to firehose money into the system at the whim of politicians. Who gets that money? According the the article, it would appear to be government workers, financiers, and beltway bandits. Oh, and the politicians themselves, who we can assume will be well-rewarded for their largess during the next “election cycle”. Nice. A hermetically sealed system. Ummm… excuse me, but what about the rest of us? This seems to be creating an “us against them” paradigm. The money they get dilutes the value of the money we have. Didn’t they just take a bite out of my rainy-day fund? Sounds like we’re getting hosed. Again.
4) What does deficit spending do to the government’s accountability to the people? A balanced budget means that government spending is constrained by what the citizens are willing to pay for. That sounds to me like a very prudent restraint. Even a budget deficit that’s commensurate with economic growth makes a certain kind of sense, although private sector funding seems to me to be a better way to do that. And, yes, I know that there are times when deficit spending is necessary, such as during a war or a national emergency of similar scale. But unrestrained government spending as a matter of course? Doesn’t that imply unrestrained government activity as a matter of course? Including unrestrained power reward its cronies, punish its critics, and control the lives of its citizens? In my view, this is an extremely serious threat to a free and open society.
Given these considerations, it seems to me that MMT is a centralist’s dream, a justification for a program that has the potential to pauperize and subjugate the average American.
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