ks.234
Half way to Infinity
We seem to be going around in circles again. I don’t understand how you can say the ‘Keynesianism *is* MMT’ and then say that MMT is dangerous but Keynesianism is not.Because the vast majority of MMT is Keynesianism and the differences, Keynesians argue, either make little actual difference or are harmful and possibly even dangerous.
Again, all the MMT says on interest rates is that they’re regressiveI don't understand this at all. Surely the whole point of MMT is that interest rates do not affect aggregate demand and are therefore not used as part of monetary policy. Instead MMT uses money printing and tax increases to control demand, compared to NK which uses money printing, tax rises and interest rates.
If both Keynesianism and MMT agree that there is unused fiscal space that can be used up to but not beyond the point of inflation, what’s the argument? MMT clearly says that inflation is a limit to spending, as are all the other limits you mentionAnd Keynesians argue that the fiscal space for MMT is no greater than that already available (but mostly unused) to NK. And that if you go beyond the NK limit you are going to either have inflation or else a moribund economy with low productivity growth. Which is why they want to talk about secular stagnation, Japan, productivity, the limits of fiscal policy effectiveness, zero lower bounds, endless affordability of GOP tax cuts, etc. etc. and not MMT.
Of course it’s politics. That’s the point. Economic truths need to be heard outside of academia and get into politics. The fact that academic models of the economy do not find their way into politics is the problem.But that's politics, not economics. And literally that's the politics of Krugman (government can do good, we have orders of magnitude more fiscal space than we think, green new deal, addressing income inequality, etc.) who you earlier dismissed as a right wing shill.
It is true that Krugman is quoted out of context by those who use him to attack MMT, but Krugman says one thing one minute and something else another depending on his audience.
What is interesting though is how Krugman is used as a stick to beat MMT by both monetarists and Keynesianism alike, despite the fact that a number of MMT supporters have taken on the criticisms head on and answered them.
There seems to be an alliance between academia and current economic thinking to keep MMT out of politics, not sure why.
No doubt if MMT makes more headway we’ll start to hear more about MMT being a socialist utopia/dystopia, a far left ideology, or some such nonsense.