Matt Bruenig: What’s the Point of Modern Monetary Theory?: "I have only ever written about MMT one time way back in 2013... pondering whether MMT is really just a very roundabout way of arguing that we should manage the price level through the fiscal authority and the debt level through the monetary authority rather than the other way around.... In the six years after my 2013 post, it has become clear to me that the bulk of MMT discourse is not really about what the best policy instruments are for maintaining price stability and debt stability, but rather about using word games to make people believe that the US can have Northern European levels of government spending without Northern European levels of taxation...
...If you understand the MMT private language or have a couple of hours available to talk to an MMT advocate and slowly peel back the layers of obfuscation they like to use, you realize that “taxes don’t fund spending” is not saying we don’t need to raise taxes to expand the welfare state. Rather, it is saying that, in their idiosyncratic way of categorizing things, the necessary taxes do not “fund the welfare state,” but merely “offset the inflation caused by the money creation that funds the welfare state.” This is a good way to jam up the discourse and confuse people, which can arguably be useful politically, but as a policy matter, it does not add any new insight....
If the point of MMT is really about how it would be better to have the fiscal authority manage the price level and the monetary authority manage the debt level... you would expect to see a lot more discussion about the competencies and flexibilities of each authority at those tasks. But there is surprisingly little written about such things in these circles. The real point of MMT seems to be to deploy misleading rhetoric with the goal of deceiving people about the necessity of taxes in a social democratic system...
#noted
