ks.234
Half way to Infinity
What are my fantasy economics?
The Fight for the NHS/MMT economics
- Thread starter ks.234
- Start date
Hook
Blackbeard's former bo'sun.
Some random thoughts, and hopefully nothing too contentious.
People who advocate MMT seem to believe that government spending is for the public good. In particular, advocates on the left believe that very large amounts of government spending are needed to fight global warming and to fund guaranteed jobs, and that these projects are to be financed by printing electronic money. This represents a significant shift of resources away from the private sector and towards central government. The argument about whether or not this shift really is for the public good is, I believe, a separate argument.
In my view, there is a extremely strong case to be made for global warning. In this case, the private sector has clearly failed us. I believe the value of the resulting output of increased government spending is far greater than the loss from reduced private sector output. I'd go further and suggest that we are all out of options here, and that it should be the primary objective of all governments worldwide.
The job guarantee seems like a good thing on the surface, but I wonder if there are devils is in the details. MMT suggests that governments can keep spending so long as all real resources are not being used. 100% employment weans 100% resource utilization, so spending must then become inflationary. What happens then to spending to reduce global warming?
Also, and maybe this is mostly a US-based thing, I have trouble distinguishing between a “job guarantee” and “welfare with a work requirement”. The latter has been a GOP theme for many years. In my worst imagination, I see press gangs enforcing the job guarantee. No doubt the military would welcome the additional conscripts! In other words, I see nothing to stop a newly elected hard right government from usurping MMT, turning away from the Green New Deal, and towards military spending, border walls, and other right wing pet projects on a scale we've never seen before.
People who advocate MMT seem to believe that government spending is for the public good. In particular, advocates on the left believe that very large amounts of government spending are needed to fight global warming and to fund guaranteed jobs, and that these projects are to be financed by printing electronic money. This represents a significant shift of resources away from the private sector and towards central government. The argument about whether or not this shift really is for the public good is, I believe, a separate argument.
In my view, there is a extremely strong case to be made for global warning. In this case, the private sector has clearly failed us. I believe the value of the resulting output of increased government spending is far greater than the loss from reduced private sector output. I'd go further and suggest that we are all out of options here, and that it should be the primary objective of all governments worldwide.
The job guarantee seems like a good thing on the surface, but I wonder if there are devils is in the details. MMT suggests that governments can keep spending so long as all real resources are not being used. 100% employment weans 100% resource utilization, so spending must then become inflationary. What happens then to spending to reduce global warming?
Also, and maybe this is mostly a US-based thing, I have trouble distinguishing between a “job guarantee” and “welfare with a work requirement”. The latter has been a GOP theme for many years. In my worst imagination, I see press gangs enforcing the job guarantee. No doubt the military would welcome the additional conscripts! In other words, I see nothing to stop a newly elected hard right government from usurping MMT, turning away from the Green New Deal, and towards military spending, border walls, and other right wing pet projects on a scale we've never seen before.
laughingboy
pfm Member
One woman who has written a book about the Job Guarantee is Pavlina Tcherneva. Her website has a US-centric FAQ about it here. Q17-18 is about workfare. It might convince you better than it does me.
laughingboy
pfm Member
Some of this would be policy choice - the government would try to move economic activity from lower-priority activity to our preferred activity (reducing global warming) by swapping spending on the former to the latter.
Alternatively, in terms of fiscal space for additional government spending, you can try to create more, either by growing the real resources of the economy (by training workers, importing workers, etc) or by dampening some of the demand in the economy (raising taxes and thereby cancelling money is the obvious way, but there are probably other ways of achieving this, e.g. regulatory redesign).
laughingboy
pfm Member
Governments can use the economy for good or ill. MMT doesn't change that.
Spraggons Den
pfm Member
So could the political right use the same MMT argument to provide money for things they value such as public floggings/hangings, mining the English channel or fitting flag-poles with pre-fitted Union flags to every residence?
Sue Pertwee-Tyr
Accuphase all the way down
They don’t need to. They seem to have no practical or ethical problem funding their own pet ideological projects, they just un-fund other stuff that they don’t care so much about, like policing, education and healthcare.
Hook
Blackbeard's former bo'sun.
As you predicted, am not impressed by her answers. Maybe the answer here in the US is to reinvent and expand the Job Corps. It currently targets low income 16-24 year olds with job training programs. I’ve always been in favor of free job/trade education and an increased minimum wage for all, but I continue to struggle with how a job “guarantee” could be successfully implemented.
Hook
Blackbeard's former bo'sun.
I agree that the steps you describe could work, but not without risk. The problem is implementation time. With a priority as urgent as global warming, delays while waiting for this fiscal space to be created could prove disastrous.
Hook
Blackbeard's former bo'sun.
Agreed. The point I was trying to make is one of scale. In the past, horrible periods of GOP rule have been slightly tempered by their belief in “fiscal responsibility”. I shudder to think what they would do if their budget were unlimited.
wulbert
pfm Member
Well, that's what the public-school debating society is all about. Learning how to argue anything, from any point of view, and sound convincing. Helps a chap to tell any lie with consummate ease and argue anything that will enrich him.
ks.234
Half way to Infinity
Absolutely, government behaviour is determined at the ballot box. If we vote in a government that says it is going to cut spending on public services, we will get a government that cuts public services. At present there is a thought process that seems to say that spending on public services is not possible so people vote for cuts to public services.
We get the governments we vote for. if we believe lies, we vote for lies.
ks.234
Half way to Infinity
Rather depends on what he said. If he said that government always has money because, as any fule kno it makes the damned stuff out of thin air, then he’s correct.
ks.234
Half way to Infinity
Article in FT about debt in which two opposing views are represented, one by Stephanie Kelton, the other by Edward Chancellor. Kelton makes her case about the nature of debt with evidence, Chancellor will provide succour for anti-MMTers, but without any evidence only the usual nonsense about “printing money”. No serious economist uses “printing money” to describe money creation, it reveals an agenda without an argument.
Arguments against MMT are sounding more and more angry and desperate.
https://www.ft.com/content/53cb3f6a-895d-11ea-a109-483c62d17528
Arguments against MMT are sounding more and more angry and desperate.
https://www.ft.com/content/53cb3f6a-895d-11ea-a109-483c62d17528