What this also means is that the capacity to tax, and indeed to borrow, cannot constrain government spending. Tautologically this has to be true: since neither payment of tax or lending to the government would be possible unless government created money was put into circulation as a result of government spending that spending cannot be constrained by either of them.
But what this means is that there is no requirement per se to balance the government’s books. Indeed it is not just illogical but completely economically perverse to seek to do. A government with a balanced budget necessarily denies an economy the funds it needs to function.
Nope, not at all.
Assume the steps leading up to this are correct. Govt can just print money, they spend then tax, there aren’t those constraints. This does not then mean that a balanced budget is denying society the money it needs to function. MMT doesn’t say that at all. Taking it all again as true, imagine a society at full employment. True, entirely full, employment and capacity utilisation. Any further money emission will turn up as inflation, only inflation. Which MMT types say must be taxed back to prevent the inflation.
That is, even MMT says that at full capacity therefore there should be a balanced budget. To prevent inflation.