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[Thread: 1/11] Yesterday was the day #MMT officially went mainstream, courtesy of @bhgreeley at @ftalphaville: ftalphaville.ft.com/2019/01/16/154…. Here are the highlights of that historic article:
[2/11] @bhgreeley: “There is nothing inherently socialist about govt debt. A govt can issue debt to pay for whatever it likes: to fight a war, to lower taxes ... to soften the sharp edges of a recession. The US has, in fact, issued debt to pay for all of these things”.
[3/11] @bhgreeley: “American politicians say that public debt crowds out private investment, that it's unsustainable and will turn the country into Argentina. Or Greece. Or now Venezuela. But regardless of what they say, what American politicians do is vote for more debt”.
[4/11] @bhgreeley: “Advocates for MMT argue that, for a sovereign country with its own currency, there is no inherently unacceptable level of government debt — that country does not automatically begin to collapse when debt reaches 90% of GDP, or even 200% of GDP”.
[5/11] @bhgreeley: “[The US government] appropriates what it believes is necessary for domestic programs, regardless of revenue. A traditionalist would see this as a prescription for inflation: increase the supply of money and, as with any commodity, you reduce its value”.
[6/11] @bhgreeley: “MMT argues that inflation happens only when real economy ... can't absorb what govt is spending. So: disconnect spending from taxation. Spend until the economy is at capacity. … Raise taxes only to cool down inflation, when real economy exceeds that capacity”
[7/11] @bhgreeley: “We are confident [that MMT] is neither Marxist, nor is it bullshit. … MMT is simply a different way of looking at fiscal policy, a way of describing what the real-world constraints on spending look like”.
[8/11] @bhgreeley: “[MMT] is in fact very close to how people in Washington already approach spending. Again, we're not talking about what they say. Rather, we're talking about what they do”.
[9/11] @bhgreeley: “US Congress spends money on stuff it thinks is important. Over last four decades it has only once matched that spending with taxes, in late 1990s. … Like MMT, Congress already appropriates away until it reaches real-world restraints on how much it can spend".
[10/11] @bhgreeley: “When Wash. wants something — to fight a war, to cut taxes — it appropriates. Arguments about balancing budgets aren't about constraints. They're about priorities. Important programs get appropriations. ... Unimportant programs need to be paid for with taxes".
[11/11] @bhgreeley: "[Politicians] who appropriate regularly and wildly without concern or revenue, are basically already in the closet on modern monetary theory".
