Professor Stephanie Kelton - The Deficit Myth

[DEAD7]

An increase in the levels of government spending OR a significant reduction of tax revenue when was the last time it caused inflation in the US that can be described as a drastic change?

Are you suggesting its not an issue at all(meaning its impossible) or that its so unlikely we shouldnt worry about it?
... and what happens if your wrong?

 

[AnonymityX1000]

Are you suggesting its not an issue at all(meaning its impossible) or that its so unlikely we shouldnt worry about it?
... and what happens if your wrong?

Why don't you answer my question?
But to yours, the latter. America has put itself in a unique spot where unless something changes drastically on the global landscape we don't have to worry about inflation or paying our debts.

 

[Dorian Breh]

I'm copping her book.

Terrific talk

@levitate raw or nah?

 

[Dorian Breh]

My understanding(please correct if im wrong) is that inflation comes as a consequence of excess government spending, but MTT argues the effects can be mitigated by taxation to reduce aggregate demand...

My to this theory stems from my belief that the control lever(s), specifically taxation, are not easily pulled in this country and Krugmans "infinite upward spiral in inflation" could and would prove true.

Inflation comes from an excess of govt spending

This poster is like a Cato Institute bot without the grammar skills

Inflation in 2020 is due to unchecked monopolies plus corporate (and 1% earner) tax avoidance schemes that combine to ensure company revenue is not converted into increased purchasing power for company employees.

If all of the cash a company throws off is going into offshore accounts whose owners will never need to spend the money, since they have enough assets already that they will use debt to make any additional purposes, we get inflation.

 

[Hood Critic]

My understanding(please correct if im wrong) is that inflation comes as a consequence of excess government spending, but MTT argues the effects can be mitigated by taxation to reduce aggregate demand...

My to this theory stems from my belief that the control lever(s), specifically taxation, are not easily pulled in this country and Krugmans "infinite upward spiral in inflation" could and would prove true.

Highly unlikely which is why someone told you your understanding doesn't match up with this era of economics.

 

[hashmander]

Given how the deficit has and continues to grow under current belief that the deficit is a bad thing and needs to be reigned in, I think we'd reach the line she mentions rather quickly should it be accepted as ok and even a good thing.

Krugman, who i rarely agree was right when he said:
“When people expect inflation, they become reluctant to hold cash, which drive prices up and means that the government has to print more money to extract a given amount of real resources, which means higher inflation, etc... Do the math, and it becomes clear that any attempt to extract too much from seigniorage — more than a few percent of GDP, probably — leads to an infinite upward spiral in inflation. In effect, the currency is destroyed.”

He was right on the money.
These levers arent easily undone as some progressive economist suggest, and a balance not easily maintained. Its best to avoid the risk altogether as once the inflation begins its near impossible to stop.
Just because things are good now doesnt mean they will be tomorrow as Covid has shown. Best to play it safe.

IMO of course.

 

[DEAD7]

Highly unlikely which is why someone told you your understanding doesn't match up with this era of economics.

Inflation comes from an excess of govt spending

This poster is like a Cato Institute bot without the grammar skills

Inflation in 2020 is due to unchecked monopolies plus corporate (and 1% earner) tax avoidance schemes that combine to ensure company revenue is not converted into increased purchasing power for company employees.

If all of the cash a company throws off is going into offshore accounts whose owners will never need to spend the money, since they have enough assets already that they will use debt to make any additional purposes, we get inflation.

Professor Kelton(at 20:10) in the OP states govt. spending would cause inflation rather quickly without taxation to control it Not sure why you think you understand economics better than her and Krugman (i definitely do not) but whatever.

@ lumping Krugman in with Cato

 

[Dorian Breh]

Professor Kelton(at 20:10) in the OP states govt. spending would cause inflation rather quickly without taxation to control it Not sure why you think you understand economics better than her and Krugman (i definitely do not) but whatever.

@ lumping Krugman in with Cato

Krugman didn't say inflation comes from excess government spending, you did.

This theorist is advocating for additional spending. Her admission that you'd need to maintain taxation but redirect it's usage is not an argument in favor of your hypothesis.

 

[DEAD7]

Krugman didn't say inflation comes from excess government spending, you did.

This theorist is advocating for additional spending. Her admission that you'd need to maintain taxation but redirect it's usage is not an argument in favor of your hypothesis.

Govt. spending without offsetting taxation results in inflation according to Professor Kelton. I gave you the time stamp.
If she's wrong about that... then maybe she's wrong about a lot of it.

my argument is that control lever(taxation) which we would be dependent upon to keep us from ever reaching hyperinflation isnt easily pulled/controlled... thus the risk outweigh the reward(s) in my opinion.
Quoted below for clarity/accuracy.

My to this theory stems from my belief that the control lever(s), specifically taxation, are not easily pulled in this country and Krugmans "infinite upward spiral in inflation" could and would prove true.

Imagine getting a failed businessman with no sense like Trump in office after enacting this shyt
America really isnt the nation for this shyt.

 

[ogc163]

Kelton on deficits and inflation:



"Could you get inflationary pressure because deficits are too big? Absolutely"






"If you start multiplying [the basic income amount] across the number of people who would receive that, this is a huge share of GDP. And so if you push [basic income advocates] and say ‘how are you going to put that much money into people’s hands and fuel spending in the economy without setting off a massive inflationary problem?"

 

[ogc163]

A critique of MMT from the left:

What’s the Point of Modern Monetary Theory?

"In the six years after my 2013 post, it has become clear to me that the bulk of MMT discourse is not really about what the best policy instruments are for maintaining price stability and debt stability, but rather about using word games to make people believe that the US can have Northern European levels of government spending without Northern European levels of taxation."

"But what they do next is use their idiosyncratic categories to say things that are true under their definitions but confuse people who are not familiar with the private language of MMT.

So they will say things like “taxes don’t fund spending” or things like “the answer to how will you pay for it is simply that you will spend the money” in discussions about, for instance, how to do welfare state expansions. Many people on the left read this and believe them to be saying that we can have a Nordic-style welfare state without increasing the US tax level. After all, if taxes don’t fund spending, then we don’t need them, right?

But that is not what they are saying. If you understand the MMT private language or have a couple of hours available to talk to an MMT advocate and slowly peel back the layers of obfuscation they like to use, you realize that “taxes don’t fund spending” is not saying we don’t need to raise taxes to expand the welfare state. Rather, it is saying that, in their idiosyncratic way of categorizing things, the necessary taxes do not “fund the welfare state,” but merely “offset the inflation caused by the money creation that funds the welfare state.”

 

[Dorian Breh]

Sounds like a lot of posters struggling with the differences and impacts of private and corporate taxes.

 

[Oldschooler]

Why don't you answer my question?
But to yours, the latter. America has put itself in a unique spot where unless something changes drastically on the global landscape we don't have to worry about inflation or paying our debts.

I disagree and I would categorize myself as a progressive liberal and this is very dangerous thinking that could lead to another World War. America has lost its geopolitical influence and really if it comes down to a war, there are other countries like Russia and even China that have both the weapons technology and capability to come knocking on your door asking for collection.

 

[AnonymityX1000]

I disagree and I would categorize myself as a progressive liberal and this is very dangerous thinking that could lead to another World War. America has lost its geopolitical influence and really if it comes down to a war, there are other countries like Russia and even China that have both the weapons technology and capability to come knocking on your door asking for collection.

I don't mean we won't pay but like she is saying just print the money to do so.
Regarding this topic overall I am not advocating for no taxes or even low taxes I think taxes should go up if the government is offering additional services if you can afford it and we should have as balanced a ledger as possible. But a lot of politicians are very disingenuous on the topic of spending and the deficit etc.

 

[BeingBetter]

I'm copping her book.

Terrific talk

Here Ya Go, If You Want the book for free:

The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy | Stephanie Kelton | download