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How to approach the federal budgeting process:
Keynesians
1)"Start with spending goals
2) Set tax policy to realize adequate revenue"
MMT
1) Start with spending goals
2) Evaluate inflation risk
3) Set tax policy (or carveouts) to minimize inflation risk
Keynesians
1)"Start with spending goals
2) Set tax policy to realize adequate revenue"
MMT
1) Start with spending goals
2) Evaluate inflation risk
3) Set tax policy (or carveouts) to minimize inflation risk
The former is laid out here washingtonpost.com/opinions/a-deb…
It's just plain vanilla PAYGO
You could easily end up with highly inflationary DEFICIT NEUTRAL spending, e.g. doing a massive infrastructure bill "paid for" with a wealth tax or something.
It's just plain vanilla PAYGO
You could easily end up with highly inflationary DEFICIT NEUTRAL spending, e.g. doing a massive infrastructure bill "paid for" with a wealth tax or something.
That's why the the MMT approach carries a much *lower* risk of inflation than pure a PAYGO approach. Eventually, maybe someone will pick up on this up and stop repeating the line that "implementing MMT" would lead to (hyper)inflation.
