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The Fight for the NHS/MMT economics

So MMT has no answers about recession, interest rates, or unemployment? Interesting.
Yes, MMT has answers to all of those questions, they’ve been covered many, many times before. As you’ve been so critical of supporters of MMT, I’m surprised you have taken the time to look at the contents of their posts.

But the real problem is that your questions started here….
How do you get 12 different answers to the same economic question?
Ask 11 eleven economists.
….a question posted by someone who has demonstrated on two threads that they are incapable of formulating either an opinion against MMT, or an opinion for Monetarism. More relevant, it was an entirely flippant question that has no relationship to your 3 questions. If you want a serious answers to three different questions, perhaps don’t frame them in one flippant and meaningless question.

If you do actually want a serious answer to your questions, you could either a) look back through all those answers that have already been given many times before, or b) if you do have a serious question, then ask them in a serious manner.

I am more than happy to answer and genuine questions about MMT, even if answers have been given many times before, if they are asked in a genuine manner and not framed in flippancy and such obvious malign intent.
 
So MMT has no answers about recession, interest rates, or unemployment? Interesting.

In my limited world view I see a place for aspects of the policy to be applied. I sort of get the logic and think she made lots of valid points but I don't think running with pure MMT will magically cure recessions, interest rates, unemployment, corruption, bribery etc etc. But the logic of it certainly would appear to have valid worthy aspects. No reason why there can't be a mixture of a variety different types of economic policies as far as I can understand.
Somebody must lose if it is embraced across the board and I assume that is the very rich and the crooked.

Is it that MMT hasn't really got a chance to work because there are so many vested interests and greedy corrupt groups across societies?

This post made a lot of sense to me but nobody appears to have responded to it.

<a href="https://pinkfishmedia.net/forum/thr...nhs-mmt-economics.260713/page-32#post-4536121">The Fight for the NHS/MMT economics</a>
 
In my limited world view I see a place for aspects of the policy to be applied. I sort of get the logic and think she made lots of valid points but I don't think running with pure MMT will magically cure recessions, interest rates, unemployment, corruption, bribery etc etc.
Yes, but there is nothing magic about MMT, it is nothing more than an observation of money flow and a policy change to a Job Guarantee. It simply says that government spending does not come from taxation or borrowing as monetarism declares. If government wants to spend money, it can. To say there is no money is a lie.

Nothing will magically cure recession or inflation but a JG will go a long way and is another tool to tackle recession and inflation, where monetarism only allows one. Clearly if everyone had a well paid job, the gap between wages and prices would decrease and guaranteeing a well paid job will certainly deal with involuntary unemployment. Again though, it is not a magic cure all, people who have to give up work for other reasons such as acting as carers will also need to be considered
But the logic of it certainly would appear to have valid worthy aspects. No reason why there can't be a mixture of a variety different types of economic policies as far as I can understand.
The main consideration here is the observation of money creation, any system based on constraining government spending to taxation will be flawed. Other economic models are available, but at the heart is where money comes from and to say it comes from taxation is just not reality.
Somebody must lose if it is embraced across the board and I assume that is the very rich and the crooked.
MMT will not cost the rich very much, but it does very much go against the monetarist ideology the government spending on things like the NHS is a bad idea. Business might like the monetarist imperative to keep wages low and have a buffer stock of low cost labour, but increased spending on, say, infrastructure to tackle climate change, could create a great many opportunities for businesses big and small
Is it that MMT hasn't really got a chance to work because there are so many vested interests and greedy corrupt groups across societies?
Yes, but the biggest problem is a certain stubbornness in the heads of some people to let go of monetarism. We have seen many people here on pfm who cannot get to grips with the logic that tax does not fund spending, but can’t say how it does. Much of the anger directed at MMT, as can be seen from klfrs above, is based on misunderstanding and a determination to cling to those misunderstandings in the face of reason.
This post made a lot of sense to me but nobody appears to have responded to it.

<a href="https://pinkfishmedia.net/forum/thr...nhs-mmt-economics.260713/page-32#post-4536121">The Fight for the NHS/MMT economics</a>
That is a good post, but my objection here is the reference to “roads to nowhere” which comes from an old monetarist attack line against Keynes. I know the op is identifying the road to nowhere as a false analogy but feel it needs unpicking to identify MMT a bit more. MMT is not about creating work on roads to nowhere, but to using available resources to fulfil need. We don’t need roads to nowhere, but we do need more doctors and nurses, more care workers and much more infrastructure to tackle climate change. Road to nowhere, no. Cycleways as part of a connected infrastructure to get more cars off the road, yes.
 
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Haven't watched the job guarantee link. You have to be aware of all the many pitfalls in that scenario but again there is merit in discussing a living wage and how that can be delivered.

I think MMT falls down just like monetarism due to the human condition. Your suggestion about more Doctors, nurses, cycle lanes, critical necessary infrastructure, green tech etc etc are again all very worthy. But the problems that will inevitably pop up (Dido track and trace, Putin printing money for arms, Boris printing money for his wallpaper and refits) make it difficult to understand how the world could control the greedy and dysfunctional regimes who use this policy for nefarious ends.

The same problems I realize attach to any economic model. It would be nice if somewhere like the US or the EU started exploring the possibilities of gradually introducing MMT type projects. Agreed projects maybe like the pursuit of carbon neutral fuel, No Dido Harding projects(long jail terms if even suggested). Issues I see with the obvious worthy suggestions of Doctors and Nurses is the constraints and bottlenecks in the number of people you can train quickly and the resources needed to make it happen. On the Doctors and Nurses thing I also wonder are they afraid to make it too much better in case people start to live even longer?
But it is hard to argue against having the best medical system possible and if MMT could be teased out as the right route to get there then why not.

It would seem to me that the world has always strived to innovate when there is reward. A system that takes away that reward or appears to potentially throttle it could backfire if there is no incentive for commercial endevour.

Anyway you can see from my meanderings that I will not get a call from the ECB any time soon for my expertise :)
 
Haven't watched the job guarantee link. You have to be aware of all the many pitfalls in that scenario but again there is merit in discussing a living wage and how that can be delivered.

I think MMT falls down just like monetarism due to the human condition. Your suggestion about more Doctors, nurses, cycle lanes, critical necessary infrastructure, green tech etc etc are again all very worthy. But the problems that will inevitably pop up (Dido track and trace, Putin printing money for arms, Boris printing money for his wallpaper and refits) make it difficult to understand how the world could control the greedy and dysfunctional regimes who use this policy for nefarious ends.

The same problems I realize attach to any economic model. It would be nice if somewhere like the US or the EU started exploring the possibilities of gradually introducing MMT type projects. Agreed projects maybe like the pursuit of carbon neutral fuel, No Dido Harding projects(long jail terms if even suggested). Issues I see with the obvious worthy suggestions of Doctors and Nurses is the constraints and bottlenecks in the number of people you can train quickly and the resources needed to make it happen. On the Doctors and Nurses thing I also wonder are they afraid to make it too much better in case people start to live even longer?
But it is hard to argue against having the best medical system possible and if MMT could be teased out as the right route to get there then why not.

It would seem to me that the world has always strived to innovate when there is reward. A system that takes away that reward or appears to potentially throttle it could backfire if there is no incentive for commercial endevour.

Anyway you can see from my meanderings that I will not get a call from the ECB any time soon for my expertise :)
If you haven’t watched the video how do you know about any pitfalls?
 
If you haven’t watched the video how do you know about any pitfalls?

Because I can have an opinion based on my experience.

I went off and spent the time watching that video hoping I would get a wonderful new insight into a new special type of job guarantee. Buffer stop seems to be his name for it. His views are similar to your babe Steph. They sound wonderful in a perfect world with the majority of humans looking to work hard or honestly most of the time. Reality is that is not the case. Do you think it is possible to take the long term unemployed and turn them into the tutors and the extra institutions required to produce all the needed Doctors, Nurses and all the other disciplines required to deliver free health care for all?

His view on the micro scale interventions at local level again sounds great. I have seen government schemes work very well but again this man ignores the fact that a lot of humans just want the money not the work.

Would you be in favour of taking the long term unemployed and doing an MMT on them by giving them say for instance the average industrial wage if they engage in full time government or local schemes that are needed in their area?
 
Because I can have an opinion based on my experience.

I went off and spent the time watching that video hoping I would get a wonderful new insight into a new special type of job guarantee. Buffer stop seems to be his name for it. His views are similar to your babe Steph. They sound wonderful in a perfect world with the majority of humans looking to work hard or honestly most of the time. Reality is that is not the case. Do you think it is possible to take the long term unemployed and turn them into the tutors and the extra institutions required to produce all the needed Doctors, Nurses and all the other disciplines required to deliver free health care for all?

His view on the micro scale interventions at local level again sounds great. I have seen government schemes work very well but again this man ignores the fact that a lot of humans just want the money not the work.

Would you be in favour of taking the long term unemployed and doing an MMT on them by giving them say for instance the average industrial wage if they engage in full time government or local schemes that are needed in their area?
Sorry, but you haven’t understood the job guarantee. The buffer stock of employment is in contra distinction to the monetarist need for a buffer stock of unemployment. The rest of your post seems to assume that the unemployed are feckless, which rather misses the point that the JG would operate under existing employment law, so fecklessness can be dealt with, or are you suggesting that feckless is so endemic in the currently low paid and unemployed that low pay and unemployment is a buffer stock against fecklessness?
 
Hopefully everyone one now left on this thread is at least curious about where the logic that as ‘our government is it’s own currency issuer, it cannot therefore run out of the thing it issues’, leads us.

Monetarism is an idea that contradicts MMT at the very start of that observation by saying that government spending comes from tax.

Monetarism maintains that all spending is constrained by the tax intake. It maintains that it would love to spend money on making the NHS work, but cannot because there just isn’t enough money. Therefore to spend more would be irresponsible/we’re all in this together/printing money/inflation/Magic Money Tree/Far Left extremist ideology, any one who disagrees is a communist/there is no alternative. Any normal person will follow monetarist logic and vote Conservative.
Taking this summary as reasonable, we're still left with an understanding that increased spending leads to increased taxation though, it's just a reversal of cause and effect. If you spend, a la MMT, then you need to 'cancel' the entries in the ledger in due course, or the amount of money in the system becomes excessive and inflationary (this is my understanding). That implies taxation will increase.

So there's still a functional link between levels of spending and levels of taxation, it's just that the timing is reversed:

Monetarism: Taxation - -> Spending

MMT: Spending - -> Taxation

That seems too simplistic, so perhaps I've misunderstood, but I wonder if this is one reason why the MMT-decriers have a problem with it. It does seem to like the MMT route spends, in the hope/expectation of growth so the corresponding taxation is manageable down the line.
 
Sorry, but you haven’t understood the job guarantee. The buffer stock of employment is in contra distinction to the monetarist need for a buffer stock of unemployment. The rest of your post seems to assume that the unemployed are feckless, which rather misses the point that the JG would operate under existing employment law, so fecklessness can be dealt with, or are you suggesting that feckless is so endemic in the currently low paid and unemployed that low pay and unemployment is a buffer stock against fecklessness?

I think I do understand it. I was just pointing out that your two MMT supporters are too optimistic in their views.
You mentioned feckless I didn't. You ignored the bit about taking the current unemployed and reskilling them to train up all the staff needed to deliver a much better NHS. I used that to simply point out the limitations that will apply to a lot of the ideas championed by team MMT.

I do believe there is an opportunity to grasp by possible carefully using MMT policies in specific limited areas but as Supertweeter points out above and even your two linked presentations mention there are strong inflationary pressures.

I also simply tried to point out that MMT depends hugely on honest brokers from top to bottom. The fecklessness you mention equally can be applied across the spectrum. It generally has greater consequences the further up the pay chain you go. But to simply ignore it doesn't seem like an option to me.
 
Taking this summary as reasonable, we're still left with an understanding that increased spending leads to increased taxation though, it's just a reversal of cause and effect. If you spend, a la MMT, then you need to 'cancel' the entries in the ledger in due course, or the amount of money in the system becomes excessive and inflationary (this is my understanding). That implies taxation will increase.

So there's still a functional link between levels of spending and levels of taxation, it's just that the timing is reversed:

Monetarism: Taxation - -> Spending

MMT: Spending - -> Taxation

That seems too simplistic, so perhaps I've misunderstood, but I wonder if this is one reason why the MMT-decriers have a problem with it. It does seem to like the MMT route spends, in the hope/expectation of growth so the corresponding taxation is manageable down the line.

Not quite. Increased spending does not necessarily lead to inflation. It matters how far spending reaches full employment and the limits of other resources. It isn't just that spending ought to be automatically 'matched' by taxation. The circumstances have to be considered. In a situation of high unemployment/low productivity, where infrastructure and service work is needed.

Just note that there is no ‘spending a la MMT’, there is just spending. On tax it is worth remembering the in old French the word “revenue’ means return. So tax revenue is not “income” but money returned. In MMT that money is deleted, in monetarism it becomes a source, which it can’t be if government issues it’s own currency. Also note that the idea that spending causes inflation is from Milton Friedman, and while spending *can* cause inflation, there is not the monetarist necessary connection and words like “excess” need to be looked at. Is spending to raise nurse wages “excessive” or likely to cause inflation?

That said even modest inflation can cause tax increases through 'bracket creep' where more people end up with a raise and meet a higher threshold. Since there has been a lot of deliberate wage suppression going on this is some way off. In any case when that happens it drains spent money

MMT also rejects the notion that deficits lead to inflation due to increasing the 'monetary base'. Taxes might rise or fall in the future or even be the same. It depends on the state of aggregate spending and productive capacity.
 
I think I do understand it. I was just pointing out that your two MMT supporters are too optimistic in their views.
You mentioned feckless I didn't. You ignored the bit about taken the current unemployed and reskilling them to train up all the staff needed to deliver a much better NHS.I used that to simply point out the limitations that will apply to a lot of the ideas championed by team MMT.

I do believe there is an opportunity to grasp by possible carefully using MMT policies in specific limited areas but as Supertweeter points out above and even your two linked presentations mention there are strong inflationary pressures.

I also simply tried to point out that MMT depends hugely on honest brokers from top to bottom. The fecklessness you mention equally can be applied across the spectrum. It generally has greater consequences the further up the pay chain you go. But to simply ignore it doesn't seem like an option to me.
OK, all I can say then is that your understanding of MMT is a lot different to mine. You may understand more about MMT than me.
 
The Labour Party, the SNP, the greens, anyone you can think of, must all be able to see how the government has been financing a Covid response.

It has not been a secret,

there has been no borrowing,

there has been straightforward money creation to spend.

Its extraordinary they haven’t seized on it,

that nobody is saying loud and long,

‘Well there’s nothing to payback, of course this isn’t falling on our grandchildren shoulders…

…we’re not borrowing”.

There is no reason whatsoever that the money that’s currently being spent has to be displaced by a borrowing requirement.

Do we have inflation?

Have we have got a serious problem?

Do we need to withdraw money from the economy?


Well. No.

It’s the opposite.


Deborah Harrington

(Health Campaigner, Writer and co founder of the organisation of Public Matters)

The above is from the podcast (Deborah Harrington. The Fight For the NHS)

Deborah Harrington makes a compelling analysis of the current state of the NHS and the lies and misdirections from all parties that have led us to where we are today and the lies we keep being told about how the NHS needs to be funded in the future.

How do we get the message out there that what we’re being told about funding public services is not true?

Or do we believe the government when they say, "where's the money going to come from?", "we can't afford it"?

Thank you for the link to the podcast. I enjoyed it. Setting aside discussions about the validity of MMT, the revelations about attacks on the integrity of the NHS (which everyone purports to love) are truly shocking. The research showing that for every hospital funded by PFI (Private Finance Initiative), we could have had five publicly-funded ones built instead!

Extrapolate this rapacious approach to so much of our public realm and post-war settlement and you begin to see what fools the UK (and rest of world) populations are taken for by neo-liberal capitalist extremism. We all get a small fraction of the benefit we should be getting from our own countries wealth and pay through the nose for things that already belong to us (recent example: spiralling energy costs).
 
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Taking this summary as reasonable, we're still left with an understanding that increased spending leads to increased taxation though, it's just a reversal of cause and effect. If you spend, a la MMT, then you need to 'cancel' the entries in the ledger in due course, or the amount of money in the system becomes excessive and inflationary (this is my understanding). That implies taxation will increase.

So there's still a functional link between levels of spending and levels of taxation, it's just that the timing is reversed:

Monetarism: Taxation - -> Spending

MMT: Spending - -> Taxation

That seems too simplistic, so perhaps I've misunderstood, but I wonder if this is one reason why the MMT-decriers have a problem with it. It does seem to like the MMT route spends, in the hope/expectation of growth so the corresponding taxation is manageable down the line.
Just been doing some reading and came across this about tax from Bill Mitchell

“Governments should not follow fiscal rules like a ‘balanced budget rule over the cycle’. Rather, they should be guided by evaluations which show the impact of different fiscal policy parameters on the well-being of the population.

If there is a need for the private domestic sector to have less purchasing power, then a tax increase is indicated. Not to generate revenue for the government but to reduce purchasing capacity of households and firms.

The tax increase is serving a specific function – to deprive the private domestic sector of purchasing power, presumably, because the government wants extra real resource space available to pursue its own socio-economic mandate and/or exports are booming.

It needs to create the extra resource space because if the taxes weren’t increased there would be incompatible claims on those real resources from all the claimants (households, firms, government, foreigners) which would result in inflation.“

http://bilbo.economicoutlook.net/blog/?p=31681
 
https://www.theguardian.com/politic...ts-to-nhs-and-doctors-pay-in-thinktank-report

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Proper funding of the NHS is now critical. The Tories are a lost cause, but Labour, surely to God Labour, should not be led by Daily Mail headlines and should be proudly shouting for the NHS in terms of proper spending rather their usual mealy mouthed monetarist mutterings
 
https://www.theguardian.com/politic...ts-to-nhs-and-doctors-pay-in-thinktank-report

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Proper funding of the NHS is now critical. The Tories are a lost cause, but Labour, surely to God Labour, should not be led by Daily Mail headlines and should be proudly shouting for the NHS in terms of proper spending rather their usual mealy mouthed monetarist mutterings

That's just a continuation of the Tory policy since 2008 to run down net funding of the NHS (and social care) to the point where it can't function properly, and then let the right wing press attack dogs peck away at its credibility (drip feeding stories like these; the recent orchestrated attack on GPs) to the point where they can sell an alternative which will mean opportunities for private firms to make money and profit over and above the care imperative.
 
That's just a continuation of the Tory policy since 2008 to run down net funding of the NHS (and social care) to the point where it can't function properly, and then let the right wing press attack dogs peck away at its credibility (drip feeding stories like these; the recent orchestrated attack on GPs) to the point where they can sell an alternative which will mean opportunities for private firms to make money and profit over and above the care imperative.
That's exactly what they are doing. It's impossible to get nhs dentistry in many parts of the UK, so people are going private. At my practice they are not offering the same level of care, the tactic seems to be to offer you the "choice" of going private for treatment or extraction on the nhs.
Similar things are happening in orthopaedic surgery. Do you want 2years of pain or do you want to go private? It's the future model, I'm sure.
 
That's exactly what they are doing. It's impossible to get nhs dentistry in many parts of the UK, so people are going private. At my practice they are not offering the same level of care, the tactic seems to be to offer you the "choice" of going private for treatment or extraction on the nhs.
Similar things are happening in orthopaedic surgery. Do you want 2years of pain or do you want to go private? It's the future model, I'm sure.
That's just a continuation of the Tory policy since 2008 to run down net funding of the NHS (and social care) to the point where it can't function properly, and then let the right wing press attack dogs peck away at its credibility (drip feeding stories like these; the recent orchestrated attack on GPs) to the point where they can sell an alternative which will mean opportunities for private firms to make money and profit over and above the care imperative.

Yes, but the real point is that it is an ideological choice to run down the NHS, not economic necessity. The sad thing is that Labour is making the same ideological choices.
 
The following are all quotes from Milton Friedman who wrote the book on monetarism.

“I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. ... because I believe the big problem is not taxes, the big problem is spending.”

“Cutting government spending and government intrusion in the economy will almost surely involve immediate gain for the many, short-term pain for the few, and long-term gain for all.”

“It is my view that what is important is cutting government spending, however spending is financed. A so-called deficit is a disguised and hidden form of taxation. The real burden on the public is what government spends (and mandates others to spend). As I have said repeatedly, I would rather have government spend one trillion dollars with a deficit of a half a trillion than have government spend two trillion dollars with no deficit.”

Should a Labour Party, or any party with an agenda to improve public services, be followers of this failed, deeply flawed and demonstrably false economic ideology?

After 50 years of failure and decline for society, the human condition, and in tackling climate change, we need an alternative and one based on observable reality
 


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