Now we’ve got to ask whether he can even read

The idea that MMT says there may be money creation without limit is so grossly wrong it is absurd: what it emphatically says is the exact opposite. It recognises the real physical limits of the economy. The authors do not even hint of their awareness of that. It makes one wonder how much they have actually read about MMT. They only reference one MMT article by an MMT author, which is by Stephanie Kelton, but rather more by opponents.

What they have emphatically also not realised, or deliberately ignore, is that MMT has a very strong focus on inflation control.

They also, therefore, ign0re the role of tax in MMT, even though they read an edition of the Real World Economic Review where I had an article that discussed the role of tax within MMT.

From the article being fistthumped at:

Arguably, proponents of MMT are aware of this history. What they derive from these insights is that the roles of fiscal and monetary authorities (Treasury/Congress and the Fed) could be effectively reversed. Under MMT, the Fed finances the deficit by printing money, while the Treasury and Congress use their tools (taxation, expenditures and fees) to stabilize the economy and fight inflation. For example, Congress could raise taxes to dampen aggregate demand when the economy heats up. In fact, many MMT theorists are quite concerned about the dangers of inflation — perhaps to a greater extent than adherents to post-Keynesian or even New Keynesian views — because it erodes the purchasing power of wages. While in the latter frameworks, inflation greases the wheels of the economy, this is not necessary under MMT since the government’s printing presses provide lubrication. The hallmark of MMT is thus a fiscal view of the world, where the fiscal authority becomes responsible for the traditional monetary policy domain. In fact, MMT might be more aptly called “modern fiscal theory.”

So, they talk about tax being used to control inflation, this shows that they don’t talk about tax to control inflation in MMT does it?

6 thoughts on “Now we’ve got to ask whether he can even read”

  1. Captain Potato addresses himself exclusively to an audience whose only source of information is Captain Potato and the burblings of other members of that audience.

    The notion of checking anything against an original source is entirely alien to proponents of Elynomics, hence the occasional modest inconsistency in approach.

  2. Of course the authors of this excellent summation of MMT which he is criticizing – and which destroys quite capabaly his entire ‘intellectual edifice’ (If his utterances can be called that) are the dreaded ‘neoliberals’ so can safely be discounted by his sycophants:

    At some time when these combined neoliberal opponents of MMT realise that their prescriptions don’t work they will have to turn to what might. Then MMT will have its day.

    And how do I know they are neoliberal? The authors say this:

    “When inflation is low and inflation expectations are well-anchored by central bank credibility, then the central bank may have more elbow room for expansionary monetary policy. Arguably, none of this analysis is controversial or inconsistent with mainstream macroeconomic thinking or MMT. What distinguishes the latter from the former is an apparent disregard, at least in the public debate, for obvious constraints on government spending.”

    In other words, they are wedded to the idea that democracy should not be in control of economic policy and that a coterie of central bankers, obsessed with oppressive mechanisms of control for consumer but not asset price inflation should run the economy. That’s neoliberal to the core, and they’ll make up whatever is necessary to defend it.

  3. And of course we can’t forget an example of his supporters reasoning. Apparently Murphy’s opponents defining him as the ‘Extreme’ and themselves as ‘mainstream’ are ‘Nazis, Soviet Communists and Brexiteers’

    From the intellectually challenged ‘Pilgrim Slight return’

    Oh ‘ mainstream economics’?

    Oh I see – if it’s ‘mainstream’ there’s nothing wrong with it then, as if its ‘mainstream’ it can’t possible be wrong.

    Hmmm – OK, perhaps we need to look at the history of some ‘mainstream’ ideas shall we?

    Nazism in Germany – that was pretty mainstream wasn’t it? And look what happened there.

    Soviet-style communism – hmmm – nice job! Need I say more?

    BREXIT – that was ‘mainstream’ wasn’t it? Oops!

    And what about the wisdom of crowds as put forth by market fundamentalists – all that brain power analysing and acting (what was it?) ‘in their own rational interests’ which resulted in 2008 and all that. Hmmm…………

    Yeah – ‘mainstream’. You can’t beat it can you? Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz…………………………………………….


  4. Come on, this is getting too easy.

    In other words, they are wedded to the idea that democracy should not be in control of the weather but that a coterie of meteorologists should run the weather.

  5. He must be able to read… After all, our host made him burst a vessel and block said host from viewing the Ex Officio announcements his Sageacity makes on Twatbook…

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