1/8
Although I sympathize with Stephen King’s frustration at some of the sillier things proposed in the name of MMT, I think it is deceptive to suggest that government borrowing today represents “borrowing from our collective economic futures”.
ft.com/content/bcb523…
Although I sympathize with Stephen King’s frustration at some of the sillier things proposed in the name of MMT, I think it is deceptive to suggest that government borrowing today represents “borrowing from our collective economic futures”.
ft.com/content/bcb523…
2/8
The fact is that everything we produce today will be consumed or invested by ourselves today, and, likewise, everything we produce in the future will be consumed or invested by ourselves in the future. Borrowing does not increase consumption today at the expense of future...
The fact is that everything we produce today will be consumed or invested by ourselves today, and, likewise, everything we produce in the future will be consumed or invested by ourselves in the future. Borrowing does not increase consumption today at the expense of future...
3/8
consumption. Instead it transfers spending power today from one group to another and then transfers it again in the future as the debt is repaid (although not necessarily from the former to the latter, as taxes and inflation can change the relationship between money...
consumption. Instead it transfers spending power today from one group to another and then transfers it again in the future as the debt is repaid (although not necessarily from the former to the latter, as taxes and inflation can change the relationship between money...
4/8
transfers and real transfers).
What matters is whether these transfers collectively raise welfare or reduce it. When governments borrow (or “print” money, which is pretty much the same thing) and use it to increase productive capacity in the real economy, either...
transfers and real transfers).
What matters is whether these transfers collectively raise welfare or reduce it. When governments borrow (or “print” money, which is pretty much the same thing) and use it to increase productive capacity in the real economy, either...
5/8
directly (e.g. with infrastructure spending) or indirectly (e.g. funding wealth transfers that boost business investment by boosting household consumption), government borrowing will not only make everyone better off in real terms today, but it will also make everyone...
directly (e.g. with infrastructure spending) or indirectly (e.g. funding wealth transfers that boost business investment by boosting household consumption), government borrowing will not only make everyone better off in real terms today, but it will also make everyone...
6/8
better off in real terms tomorrow.
Otherwise if government borrowing spending funds wasted resources (e.g. military spending in Afghanistan) or increases wealth concentration, as it too often does, it can make us collectively worse off.
better off in real terms tomorrow.
Otherwise if government borrowing spending funds wasted resources (e.g. military spending in Afghanistan) or increases wealth concentration, as it too often does, it can make us collectively worse off.
7/8
The idea that government borrowing is in some fundamental way a good thing or a bad thing is just ideology. I suspect King knows this but has become a little frustrated by some of the more aggressive claims people make based on their confusion over the very-real insights...
The idea that government borrowing is in some fundamental way a good thing or a bad thing is just ideology. I suspect King knows this but has become a little frustrated by some of the more aggressive claims people make based on their confusion over the very-real insights...
8/8
of MMT, the most common of which is to assume that money transfers are the equivalent of real economy transfers. The transfers implicit in government borrowing can make us better off in some cases and worse off in others, and economist should figure out what those cases are.
of MMT, the most common of which is to assume that money transfers are the equivalent of real economy transfers. The transfers implicit in government borrowing can make us better off in some cases and worse off in others, and economist should figure out what those cases are.
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