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Owlofcreamcheese posted:I mean, is the idea that you personally are uniquely smart Dead Reckoning posted:I was responding to the specific suggestion that we should just "fund the things we need", which is incredibly facile because, among other reasons, there isn't even broad agreement on what we as a society "need." Gnumonic posted:In a democracy, it's probably a good thing if we adopt a macroeconomic policy that isn't incomprehensible to the average voter? "Tax people in order to pay for programs" is pretty comprehensible. twodot fucked around with this message at 06:21 on Jan 30, 2019 |
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Jan 30, 2019 06:15
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twodot posted:
Why is it good policy? Is it because you like leftist policy but don’t like being taxed and think you found a secret code that if you complicate tax formulas enough that will make everything free? So you can have austarity taxes with socialist social programs, Instead of just having taxes like normal countries.
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Jan 30, 2019 06:24
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Owlofcreamcheese posted:Why is it good policy? Is it because you like leftist policy but don’t like being taxed and think you found a secret code that if you complicate tax formulas enough that will make everything free? Instead of paying for things by collecting money from people that have enough money? edit: I can imagine you arguing "This isn't better" or "You haven't demonstrated this is better", but "It's your duty to demonstrate to voters it's better before beginning advocacy" is just clearly ridiculous. twodot fucked around with this message at 06:34 on Jan 30, 2019 |
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Jan 30, 2019 06:30
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twodot posted:Wait, is your question straight up "Why is it good policy that the United States of America's macroeconomic policy isn't comprehensible to the average voter?". The answer to that is because you are the average voter and you have no chance of understanding this, and this isn't a college class. If you want to understand more, learn more. You know what's an easy policy to explain? "Tax the rich to pay for services that you need." You and all MMT proponents oppose this.
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Jan 30, 2019 06:38
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karthun posted:You know what's an easy policy to explain? "Tax the rich to pay for services that you need." You and all MMT proponents oppose this. edit: Wait, I guess I should issue a follow up. If your response is "Who cares about money supply?" then my response is "You are an idiot." twodot fucked around with this message at 06:53 on Jan 30, 2019 |
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Jan 30, 2019 06:46
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Gnumonic posted:This. I'd really like someone to respond to my post on the first page where I ask if there is an empirically established method for predicting the effects of inflation. Cuz if that doesn't exist then... I don't see any advantage whatsoever to a MMT based analysis. What do you mean, "predicting the effects of inflation?" Inflation means prices go up. An inflationary period would be a time during which prices are climbing. This incentivizes buying things *right now* as opposed to later because things will likely be more expensive later. I think it's also worth noting the Federal Reserve has an inflation target and there's empirical evidence the Federal Reserve (or central banks more generally) has the ability to lower inflation. Source.
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Jan 30, 2019 06:50
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twodot posted:Ok, so you've completely missed the conversation. The conversation we're having is whether we should tax the rich to pay for services or whether we should tax the rich to control money supply. Keep putting words in my mouth or actually participate in the conversation. It's up to you. So do you support or oppose permenant funding for M4A?
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Jan 30, 2019 06:54
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karthun posted:So do you support or oppose permenant funding for M4A? edit: To re-iterate a previous edit: twodot posted:edit: twodot fucked around with this message at 07:00 on Jan 30, 2019 |
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Jan 30, 2019 06:57
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twodot posted:While I support providing healthcare and all basic needs to all humans, what possible relevance can you imagine that has to macroeconomic policies of the US or any other nation that issues debt in their own currency? Because without permenant funding M4A spending will go through the annular budget markup where one single person in House or Senate leadership can remove all funding for M4A. Permenant funding removes the program from the annular budget markup process making it significant harder to cut. Again, do you support or oppose permenant funding for M4A because it sounds like you oppose it.
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Jan 30, 2019 07:02
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karthun posted:Because without permenant funding edit, EXTREME: Like just recently our entire government was shut down by either incompetence or malice, take you pick. By what measure do you imagine that "permenant[sic] funding" exists? twodot fucked around with this message at 07:12 on Jan 30, 2019 |
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Jan 30, 2019 07:05
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twodot posted:Permanent funding is a completely made up thing that has no relevance to macroeconomic policy. Funding is either protected by majority votes by the legislature (which is basically all funding) or by the Constitution (which is basically no funding). The source of that funding being tax dollars from the general fund (or specific taxes that the legislature can revoke at any moment) or printed dollars given to the general fund has nothing to do with anything. There was no majority vote for Social Security or Medicare for the last two years and those programs still exist. Your temporary programs would need annular majority votes in the House, Senate and signed by the President. Just the rejection of one of those is needed to eliminate your temporary program. We are trying to solve the political problem, not a monetary one.
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Jan 30, 2019 07:17
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twodot posted:edit, EXTREME: Social Security and Medicare A and B still existed through the shutdown.
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Jan 30, 2019 07:19
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karthun posted:So do you support or oppose permenant funding for M4A? Programs that have ‘permanent funding’ like Social Security and Medicare are in the very near future going to be contributing to the deficit. Does that matter? MMT says one thing, and ‘pretend the federal budget is a checking account’ says another. Which one is right?
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Jan 30, 2019 07:23
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karthun posted:Social Security and Medicare A and B still existed through the shutdown.
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Jan 30, 2019 07:26
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Family Values posted:Programs that have ‘permanent funding’ like Social Security and Medicare are in the very near future going to be contributing to the deficit. Does that matter? MMT says one thing, and ‘pretend the federal budget is a checking account’ says another. Which one is right? Matter in a political sense or matter in a monetary sense? In a political sense it matters because then the existence of these programs becomes threatened by the annular budget markup process.
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Jan 30, 2019 07:29
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LuciferMorningstar posted:What do you mean, "predicting the effects of inflation?" Inflation means prices go up. An inflationary period would be a time during which prices are climbing. This incentivizes buying things *right now* as opposed to later because things will likely be more expensive later. The reason he's asking is, every popular explanation of MMT I've read posits that inflation functions as a kind of speed limit on the economy and constrains the government's ability to print money for various policies without taking countervailing deflationary actions. So what something "costs" under MMT isn't measured by how many dollars are spent on it, but by how much it contributes to inflation, which in turn forces the government to take measures like deleting more money out of people's bank accounts in order to keep inflation in the target band. The argument some people have been making is that certain expenditures are less inflationary than others: OwlFancier posted:Given that a big concrete wall isn't what you'd call an effective long term economic stimulus the answer is almost certainly "a lot more than you would need to delete if you funded an education program" twodot posted:Then you have no problem with my argument, because the entirety of my argument is MMT tells us we don't need to balance budgets, and people demanding that we should balance budgets should shut the gently caress up. Dead Reckoning fucked around with this message at 07:36 on Jan 30, 2019 |
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Jan 30, 2019 07:33
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twodot posted:Do you imagine this happened though magic or because a majority of the legislature agreed that should happen? Assuming you aren't an idiot, what do you imagine stops future programs from enjoying such protections, regardless of the source of their funding? When did the 115th Congress agree to spend money for Social Security and Medicare A and B over the last two years? What about the 114th Congress?
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Jan 30, 2019 07:34
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This tangent is ridiculous. MMT doesn't constrain your policy space by forcing you to make everything an annual appropriation. If you want permanent funding for a program, write it into policy. If you want to do it in a tax-neutral way, you could create a special new payroll tax and decrease income taxes by a commensurate amount. Or you could tax a certain population segment without worrying about neutrality. Or something else entirely.
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Jan 30, 2019 07:35
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karthun posted:Matter in a political sense or matter in a monetary sense? In a political sense it matters because then the existence of these programs becomes threatened by the annular budget markup process. edit: Dead Reckoning posted:OK, so if the sum total of your argument is that balanced budgets don't matter, what about MMT tells us that M4A and free college are more desirable policies than the Republican preference of slashing taxes on the wealthy and corporations to near zero and printing Lockheed Martin a trillion dollars to make G.I. Joe Laser Planes, and why can't we do all of these things at once? twodot fucked around with this message at 07:45 on Jan 30, 2019 |
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Jan 30, 2019 07:35
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LuciferMorningstar posted:This tangent is ridiculous. There is no policy that can commit a future Congress to appropriate money for a program other than dedicated taxes like the payroll taxes you mention effectively making the program budget neutral. This is opposed by MMT proponents.
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Jan 30, 2019 07:40
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karthun posted:There is no policy that can commit a future Congress to appropriate money for a program other than dedicated taxes
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Jan 30, 2019 07:43
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karthun posted:Matter in a political sense or matter in a monetary sense? In order to make cogent arguments in the former space, you need a working intellectual framework in the latter space.
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Jan 30, 2019 07:43
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Dead Reckoning posted:He's asking if there is a method for accurately, empirically predicting the inflationary effects of specific policy choices in advance. For example, if I come to you and say, "the government should print and then spend a billion dollars to do X", can you run some numbers and say to me, "that will cause the inflation rate to rise/fall by zero point Y%"? 1. If we agree the Federal Reserve can effectively manage inflation, then this is mostly irrelevant. If you review the source I posted previously, you'll see there's evidence the Federal Reserve can likely do this. 2. If you want information about the effects of government spending on inflation, try these: Older source first. This one's amusing in that the writer is clearly angry about the national debt, but not because of its effects on inflation: quote:The Bush and Obama administrations have added, and continue to add, much to the United States’ national debt. Both Republicans and Democrats spend too much of taxpayers’ money, but excessive government spending does not mean that inflation will necessarily — or even probably — follow. Source More recently... The article I linked previously was a summary of a lengthier article (full text here). Relevant text from summary: quote:Across the board, we found almost no effect of government spending on inflation. For example, in our benchmark specification, we found that a 10 percent increase in government spending led to an 8 basis point decline in inflation. Moreover, the effect is not statistically different from zero. I think they're overselling with the benchmark thing, but the idea remains the same: they didn't find evidence of government spending creating inflation. The full text also has some discussion of the recent Recovery Act. Source
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Jan 30, 2019 07:46
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twodot posted:This is just objectively incorrect, because any future Congress can entirely cancel those taxes or repurpose those taxes for literally anything. Only through new legislation. Absent any new legislation the program will still exist. Not so with the annular budget markup process. That's why the government shut down and SS and Medicare A and B did not. Do you think that SS and Medicare should have shut down?
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Jan 30, 2019 07:48
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karthun posted:There is no policy that can commit a future Congress to appropriate money for a program other than dedicated taxes like the payroll taxes you mention effectively making the program budget neutral. There isn't any reason Congress couldn't structure something similar in MMT world: "money shall be printed every year to fund Medicare, instead of the printing having to be approved via the annual budgeting process." Dead Reckoning fucked around with this message at 07:52 on Jan 30, 2019 |
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Jan 30, 2019 07:50
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karthun posted:This is opposed by MMT proponents. Sources? Other than people in this thread... Not that it matters. That an MMT proponent has specific policy positions you may disagree with doesn't undermine MMT itself. You can implement policies multiple ways, each with various drawbacks and advantages.
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Jan 30, 2019 07:53
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karthun posted:Only through new legislation. Absent any new legislation the program will still exist. Not so with the annular budget markup process. That's why the government shut down and SS and Medicare A and B did not. Do you think that SS and Medicare should have shut down?
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Jan 30, 2019 07:57
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LuciferMorningstar posted:1. If we agree the Federal Reserve can effectively manage inflation, then this is mostly irrelevant. If you review the source I posted previously, you'll see there's evidence the Federal Reserve can likely do this. But if your quote is correct, then it doesn't matter whether the Fed can manage inflation or not, because government spending has no impact on inflation? Is this measuring countries where the government was balancing spending with revenues and issuing debt? Because if so, that kind of blows up that quote as an argument that spending unbalanced by revenues or debt doesn't cause inflation. If what you're saying is correct, then what exactly is the limiting factor on the government's ability to print money? What stops the government from zeroing out taxes and letting every congressperson print however much money they want for whatever program their heart desires?
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Jan 30, 2019 08:02
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Dead Reckoning posted:There presumably exists some sort of limit on the ability of the Fed to manage inflation, yes? Probably. If you're going to claim that means we need to evaluate all new spending for inflationary risk, you should be against all further spending until the US starts doing this. quote:But if your quote is correct, then it doesn't matter whether the Fed can manage inflation or not, because government spending has no impact on inflation? I wouldn't assert that one paper finding no relationship means there's definitely no relationship. It seems entirely possible to me a certain level of spending could create problems. However, based on the evidence, some exploration into the sustainability of additional federal spending seems reasonable. The exact size of that exploration is a policy question we'd have to debate out. quote:Is this measuring countries where the government was balancing spending with revenues and issuing debt? Because if so, that kind of blows up that quote as an argument that spending unbalanced by revenues or debt doesn't cause inflation. This is what the article says about the sample: The cross-country analysis provides evidence on the long-run or steady-state relation between inflation and the size of government. Our sample consists of 80 countries during the period 1973-90. Inflation is measured by the average growth rates of the consumer price index (CPI) and M1, and the size of government is measured by the average of the ratios of general government spending to GDP. quote:If what you're saying is correct, then what exactly is the limiting factor on the government's ability to print money? What stops the government from zeroing out taxes and letting every congressperson print however much money they want for whatever program their heart desires? The empirical data doesn't account for a hypothetical government that runs the printers 24/7. That would likely be a terrible idea. The only limiting factors are self-imposed. There's nothing in MMT or the status quo that prevents this from happening. LuciferMorningstar fucked around with this message at 08:24 on Jan 30, 2019 |
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Jan 30, 2019 08:22
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Dead Reckoning posted:OwlFancier clearly believes that printing $5bn and spending it to build a giant wall in the desert would be more inflationary than printing $5bn and spending it to send people to college. But how do we know that in an algorithmic, verifiable way? This is really important, because if it isn't possible to accurately and precisely predict what effect government spending will have on the inflation rate, then we can't logically decide what programs we should print money for with the limited capacity of the market to absorb excess inflationary pressure. And if that's the case, MMT doesn't tell us anything useful about how to run the government. If you take 5 billion dollars and put in a big pile in the desert, and you take 5 billion dollars and spend it on starting or supporting any business whatsoever which do you think is going to create a greater return? What you're arguing is that the entire concept of investment is unknowable and that people who run companies and allocate funding to expand their businesses do it entirely at random. What MMT tells you is that you have, right now, as much money to invest as your economy can sustain you printing.
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Jan 30, 2019 15:34
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LuciferMorningstar posted:This is what the article says about the sample: LuciferMorningstar posted:The empirical data doesn't account for a hypothetical government that runs the printers 24/7. That would likely be a terrible idea. The only limiting factors are self-imposed. There's nothing in MMT or the status quo that prevents this from happening. Under the status quo, the ability to control the money supply rests with the Federal Reserve, unelected technocrats whose primary responsibility is to ensure the stability of the economy. Since congress cannot print money, their ambition to please their donors and constituents is constrained by their ability to collect revenue and borrow money. If we ran the government the way MMT enthusiasts are advocating, the power to control the money supply would rest with Congress instead of the Fed. Given the incentives on Congresspeople, do you understand why this would be a problem? Especially since this would remove one of the Fed's major tools for stabilizing the economy? In this scenario, what constrains Congressional spending?
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Jan 30, 2019 18:47
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Dead Reckoning posted:Under the status quo, the ability to control the money supply rests with the Federal Reserve, unelected technocrats whose primary responsibility is to ensure the stability of the economy. Since congress cannot print money, their ambition to please their donors and constituents is constrained by their ability to collect revenue and borrow money. If we ran the government the way MMT enthusiasts are advocating, the power to control the money supply would rest with Congress instead of the Fed. Given the incentives on Congresspeople, do you understand why this would be a problem? Especially since this would remove one of the Fed's major tools for stabilizing the economy? In this scenario, what constrains Congressional spending? The Fed continually takes actions that are of greater benefit to the capital class. Their dual-mandate is full-employment and inflation control. Except they primarily focus on the 2nd part and don't give a poo poo about anything but the U3 number (if they really even do that). A bit of inflation is good for debtors since it eats away at the principal of the lone. Appealing to the Fed is questionable at best.
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Jan 30, 2019 18:55
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Question for those who seem baffled that MMT can / does work: How did we pay for the Iraq War, the war in Afghanistan, and the 2008 bailout? Follow up question: Did the massive tax cuts Trump & the GOP passed cause runaway inflation?
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Jan 30, 2019 19:00
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Dead Reckoning posted:Presumably these were all countries operating under "pre-modern" monetary theory and were somewhat trying to balance expenditures with revenues. This doesn't tell us what would happen if the government decoupled spending from revenues and started printing money for whatever it wanted. Every explanation of MMT I've seen posits that the government printing money to fund its priorities puts inflationary pressure on the economy to some degree, but you seem to be saying it wouldn't. You do understand Congress can spend as it pleases literally right now, right? You're making a bunch of assumptions and providing no evidence your concerns have basis in reality. Further, you're willfully ignoring that *any* spending carries an inflationary risk. The requested empirical evidence shows government spending hasn't created serious inflationary risks in recent periods. You need to show why you think this will be different in the future, for reasons beyond, "But what if the US prints too much money???" Bottom line: you're not engaging in good faith and need to provide some evidence the risks you're describing don't exist right now, are likely to materialize under conditions that don't exist right now (and where those conditions will necessarily originate), and are more of a harm than the productivity lost to the status quo's aversion to deficit spending. LuciferMorningstar fucked around with this message at 19:32 on Jan 30, 2019 |
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Jan 30, 2019 19:12
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LuciferMorningstar posted:You do understand Congress can spend as it pleases literally right now, right? You're making a bunch of assumptions and providing no evidence your concerns have basis in reality. Further, you're willfully ignoring that *any* spending carries an inflationary risk. Our government has operated under conventional monetary theory for the period they studied, so the government spending being studied was counterbalanced by the government taking similar amounts of money out of the economy through revenues or issuing debt. MMT says that the government can do away with the latter and simply print money to pay its bills. Since none of the governments being studied were operating under MMT, it doesn't support your assertion that spending by a government operating in the way that MMT enthusiasts want would not cause inflation. Here's a quote from APM's Marketplace talking to Stephanie Kelton quote:If Congress stops worrying about balancing the budget, Kelton said the government could spend too much money into the economy with ambitious programs and end up causing inflation. So an expert on MMT is saying that, yes, an MMT styled government will put inflationary pressure on the economy by printing money to pay its bills. But you're trying to tell me it won't. If you're right, what limitation prevents the government from spending as much as it wants? Dead Reckoning fucked around with this message at 21:26 on Jan 30, 2019 |
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Jan 30, 2019 21:07
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Lumpy posted:Question for those who seem baffled that MMT can / does work: How did we pay for the Iraq War, the war in Afghanistan, and the 2008 bailout? Follow up question: Did the massive tax cuts Trump & the GOP passed cause runaway inflation?
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Jan 30, 2019 21:21
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Dead Reckoning posted:I'm starting to think that you don't understand the sources you are citing. That paper from the St Louis Fed says that government spending does not drive inflation. But, and this is the important part, it describes spending by governments operating under conventional monetary theory. Congress can spend as much as it wants right now, but it has to appropriate revenue or issue debt in order to do it. MMT seeks to do away with that limitation. I wouldn't say will. Because different programs will have different inflationary pressures. I need to find it. but Stephanie talks specifically about single payer and in her mind it might not actually create inflation, because in part it's just a transference of money, instead of new money. Though I'm not sure that was the argument she made.
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Jan 30, 2019 21:22
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I don't think I'm every gonna understand what the difference between MMT and "conventional" economics is. Lumpy posted:Question for those who seem baffled that MMT can / does work: How did we pay for the Iraq War, the war in Afghanistan, and the 2008 bailout? Follow up question: Did the massive tax cuts Trump & the GOP passed cause runaway inflation? I mean plenty of mainstream economists did not think there would be inflation after 2008.
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Jan 30, 2019 21:23
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theblackw0lf posted:I wouldn't say will. Because different programs will have different inflationary pressures. I need to find it. but Stephanie talks specifically about single payer and in her mind it might not actually create inflation, because in part it's just a transference of money, instead of new money. With OwlFancier, I'm trying to figure out whether the degree to which printing money to fund a specific program will contribute to rising inflation can be accurately figured out in advance, in a coherent universal method that works for any proposed spending.
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Jan 30, 2019 21:32
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theblackw0lf posted:I wouldn't say will. Because different programs will have different inflationary pressures. I need to find it. but Stephanie talks specifically about single payer and in her mind it might not actually create inflation, because in part it's just a transference of money, instead of new money. Yeah, I think that we can vastly reform healthcare without inflationary pressures. The logic exists independently of MMT- health care in the United States is extremely expensive as compared to other countries, so it stands to reason that there are expansive reforms that will actually cause prices to decline or at least not jump to the extreme levels need to cause inflation at an aggregate national level. Dead Reckoning posted:
Going down that road seems like a fools errand. Determining the inflationary impact of any given program after the fact is extremely difficult, forecasting the impact of individual programs is gonna be an educated guess at best.
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Jan 30, 2019 21:51
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