The Fight for the NHS/MMT economics
- Thread starter ks.234
- Start date
ks.234
Half way to Infinity
Yes, resources are finite, but the real point on resources wasted in the unemployed and the growing sector of under employed, is that we are no where near reaching the point where they run out. The point is to employ the unemployed up to, but not beyond the point they run out.
The same principle clearly does not apply for resources that come out of the earth, and while MMT does not have an answer to stop taking resources out of the earth, to do so overnight would cause economic upheaval of existential portions, it is a way to turbo charge the process of reducing consumption as rapidly as possible.
You mention health again, and I think health might show where we might be coming at this from different angles. You seem to see Health as a cost that needs to be repaid whereas MMT sees Health as a benefit that we should see as a gift. Not all money has to be repaid, we know this from our own experience when we give pocket money to our kids and those in charge of the Magic Money Tree know it in spades.
Just as MMT only spends money up to the point we reach economic turbulence, so MMT can only try to slow down our progress to the point we reach our final catastrophe
If you’re genuinely interested the second clip above of Stephanie Kelton is good
Heckyman
pfm Member
MMT supports the purchase of public debt by central banks (aka printing money) in order to allow for an increase in public spending. MMT-ers do acknowledge the inflationary risk, but downplay it. My point is that the USA have far more leeway in this respect because the dollar is the reserve currency that the rest of the world trades with.
ks.234
Half way to Infinity
Does it? Where?
Heckyman
pfm Member
It doesn't? How do they propose to finance the extra spending? Raise taxes? Sell gilts on the international markets?
Tony L
Administrator
Agreed. The one thing those more centrist/right here economically (and I’m somewhere in that mix as I’m a capitalist, just one who believes in fair taxation and funding great infrastructure/services/art etc) need to take away from this is a) ‘magic money trees’ is exactly how it works now, e.g. Dido Harding’s £37bn was not ‘borrowed’, it did not exist previously, it was created as states can do that with their own currency, and b) really all MMT represents is another way of assessing the performance of an economy. It is suggesting that inflation and employment are the key metrics of economic success and as such should be used as the control mechanism rather than an entirely abstracted figure somewhere in an entirely abstracted book.
MMT makes sense, and the more I think about it the more I suspect it wouldn’t even need the arbitrary state enforcement of ‘minimum wage’ etc (which I largely oppose) as that would naturally rise as the artificial unemployment that right-wing austerity etc causes would decline altering basic labour supply and demand levels. By design it would never result in an employment shortfall, but utilising surplus would impact labour pricing.
PS I still have reservations as I think we are only 10-20 years away from real mass automation/computerisation of huge numbers of roles (driving, warehousing etc). In some respects it could be a great idea that arrived too late, but the current model will unquestionably collapse first. That is on its last legs right now.
ks.234
Half way to Infinity
You made the proposition!
How MMT finance spending is the starting point of this thread. MMT describes what happens, that government spending does not need to the paid for up front.
This much is uncontroversial, the Bank of England itself does not challenge this idea
Last comment before I read further as I am genuinely interested.....
It is an inescapable fact that even the most highly beneficial things come with a literal financial cost. In the Health sector for example, I think almost everybody agrees many medical professionals (I'd exclude some GPs and Hospital managers!) are grossly underpaid in proportion to the highly important, skilled, and stressful work they do, and that hospitals are woefully understaffed. To rectify that properly means more staff at significantly higher wages. I'm not saying that shouldn't be done, but has to be balanced with other things. Even within the welfare sector alone there is a more or less unlimited set of other highly beneficial things that a civilised society would like to see done. (Not withstanding that we have a Government who make very wrong choices - HS2???????!!!!!!!.)
I didn't say it had to be "repaid" but as I explained in my original post, the "cost" to the Country is still very real.
Of course you should weigh that financial cost of large spending against immediate & future benefits - even in purely economic terms, incremental investment in health service gives a partial return, as well as being something a civilised country should make a very high priority, because that's one of the things being civilised should mean. (And substantial parts of the NHS are very nearly on its knees as far as I can tell).
Utilising the unemployed - clearly a great objective, but has its very obvious limits and issues.
ks.234
Half way to Infinity
I will say no more than to leave you with a thought; if it is necessary to raise income from tax before it is possible to spend, how come no one talks about it when it comes to things like HS2, why is it only brought to our attention loud and clear when it comes to public spending? Why is spending £14b on Care broadcast wide and loud when tens times that sum is barely whispered when it’s about a railway that the government wants?
Heckyman
pfm Member
I just said "MMT supports the purchase of public debt by central banks", which is essentially what the theory says, what is more or less happening now, and what has happened at various points in history.
ks.234
Half way to Infinity
But that’s not all you said, the end of your sentence was, “(aka printing money) in order to allow for an increase in public spending.”.
Again, you state again that MMT supports the theory that governments purchase debts to fund spending, but again, does it? Where does it state that support?
it should also be noted that you went on to finish that sent an e with, “(aka printing money) in order to allow for an increase in public spending.”. Where does MMT say that spending needs to be pre-paid for? Surely the opposite is true, MMT a say that government does not have to be paid for in advance.
Seeker_UK
Feelin' nearly faded as my jeans
Was Liam Byrnes comment about there being no money just an ironic joke between two people who know the real truth?
Yes, it was. AIUI, the departing Chancellor often left a 'funny' for the incoming one as an 'inside joke'. Sadly, George Osborne broke the protocol of keeping it house and took it as an opportunity to justify a course of action and blame his predecessors.
ks.234
Half way to Infinity
Yes. I have to wonder why Osbourne broke protocol? Did he feel that Thatcher’s mantra that there is no government money, there is only taxpayer was under threat? Did he release that note to reinforce the lie safe in the knowledge that Labour, also being complicit in the lie, couldn’t expose it?
Tony L
Administrator
I’m increasingly of the mindset that the UK Conservative and US Republican parties are criminal endeavours that only exist to siphon state assets into establishment, donor or oligarch hands, and will use any deception or smokescreen to achieve that aim. They are both entirely corrupt and anti-democratic. The UK Labour Party and to a lesser extent the Democrats are willing accomplices as they endorse and prop-up the failed system these crooks rely upon.
ks.234
Half way to Infinity
I was listening to one podcast where the question was asked about how do we start to get the message out to challenge all these vested interests, and the contributor answered with ‘Mumsnet’. Much laughter from other contributors as if it was a joke but she said ‘No, I’m serious. Who is better placed to think about the next generation of human need and real world necessity….a bunch of accountants or a bunch of mothers?”
paulfromcamden
Baffled
I wouldn't go quite that far but it does explain quite a lot of government spending.
And they copy each other. Look at the Republican media currently banging the drum on hordes of poor converging on the Texas border. Just like the montage for the Brexit vote.
Tony L
Administrator
I’m sure there is much truth in that. It is a clear and no doubt diverse group of stakeholders in any future. To my mind the future direction has to come up from the ground up and it has to destroy the existing two-headed Westminster dinosaur. That is step one. I have pretty much given up endorsing the existing system with my vote. For the time being I will continue voting Green just to be counted as an anti-establishment and environmental voice on the national voteshare, though if there was a ‘none of the above’ option I’d likely go for that instead. The most interesting things in UK politics at present are unquestionably pressure groups such as Extinction Rebellion, Black Lives Matter, Good Law Project etc along with new academic theory such as MMT. It all needs to gain traction through whatever pathways it can, and social media will undoubtedly be a big part of that (which is almost certainly why the two-headed dinosaur wants to regulate and control it). The very last thing MMT needs is to be diluted and absorbed into an obsolete slow-moving self-interested factionalised bureaucratic quagmire such as Labour.
Tony L
Administrator
It’s all the same Steve Bannon playbook. He has well documented connections to Trump, Farage, Johnson etc etc. It is all very much one thing.