Or perhaps his valiant defence of his misunderstandings of MMT against the Venezuela example.
And the last claim – that inflation is caused by a government creating new money to finance spending above the income from taxation – is absurd. Any government can spend beyond their ability to raise money by taxation: the UK has since 1694, and has prospered greatly as a result. So this generalisation is another drawn from the undergraduate textbook that is, simply, incorrect because it ignores so many causes for inflation, many of which are external to any economy. What it also ignores is the fact that a government may want to spend in this way to boost economic activity. In other words, the comment ignores the whole of the understanding of fiscal policy based upon Keynesianism.
Well, no. The printing of money to pay for government spending is the monetisation of fiscal policy. It’s a monetary policy therefore, not a fiscal one.
It’s also not new as it can indeed cause inflation and hyperinflation. As varied examples tell us, Hungary, Weimar, Zimbabwe etc.
As, err, MMT says it will if you don’t tax enough.
There is, of course, a hyperinflation problem in Venezuela. But it did not result from printing too much paper. And it’s crass to say it is. I am not, when saying so, also suggesting that the government has no part in the problems the country faces: it obviously has. But let’s have a mature debate and explanation, and not this nonsense that suggests the printing press is the route to hell in a monetary handcart.
Absolutely everyone else is insisting that Venezuela’s hyperinflation has come from the government monetising fiscal policy, by their habit of just printing money to go spend. This is so completely countervailing to basic theory and understanding that I’m in danger of actually being interested in what Ritchie thinks the cause of this hyperinflation is if it isn’t an expansion of the base money supply. It’s not the banks doing it by extending credit after all, is it?