Today’s intellectual contortion is that nurses aren’t getting a 12.5% pay rise because we’re not taxing the rich enough. Which would seem to indicate that – contrary to repeated assertion – tax pays for spending.
He then wibbles off into misunderstanding his own MMT. Finally, he admits that financing government through money printing is inflationary. Therefore we have to tax money back. OK, not the way I’d do it but that is at least reasonable economics. Monetisation of fiscal policy is prone to inflation.
Then he says that therefore we need to tax the rich.
But that’s in conflict with what is true on odd days of the week which is that rich folks don’t spend all their money. They just save it. Not invest it, they just Scrooge McDuck it. At which point of course taxing them doesn;t reduce inflation, does it?
Inflation being the result of more money chasing goods and services and Scrooge McDucked savings don’t do that. So, either his precepts about taxation are wrong or his precepts about savings are.
By his own logic if we are to tax to prevent MMT induced inflation then we need to tax the money people might use for consumption. That means poorer people who do spend all their cash. As he’s also pointed out, taxing richer people doesn’t – or might not – change consumption because they’ll just run down the, Scrooge McDucked, savings in order to maintain consumption.
We end up with MMT having to insist that inflation is prevented by taxing the poor. Which is most, most, progressive I think you’ll agree.