We could have designed something *similar* to this.
The first question is basically, Do you need financial help? Y/N
I pretended I was Canadian for purposes of this exercise. 1/9
Decided to live in Ontario. 2/9
Like many Americans, I claimed *some* lost income due to COVID. 3/9
Due to reduced hours. 4/9
These were the only two options. 5/9
I’m worried about paying the rent. 6/9
And I have student debt. 7/9
But I’m no longer a student. 8/9
And then I’m directed to a list of programs that might help me. 9/9
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Anyone who has been paying attention knows that what we’re hearing from a number of economists today was laid out more forcefully more than a decade ago by those they prefer to ignore.
Mainstream econ has arrived at the position that we’re probably OK as long as CBO forecasts re: the future path of interest rates is off. MMT asserts that the future path is a policy choice.
I’ll put the MMT record up against the stopped clock mainstream Keynesian record any day. Exhibit A brookings.edu/wp-content/upl…
If you’ve followed the headline Keynesians over the years, you know that they have twisted themselves into knots, trying to justify their ever-shifting views on fiscal sustainability.
They counseled Congress (and Obama) to steer clear of a bigger relief package, paving the way for an abysmal “recovery.” They leaned into Simpson Bowles and went on to warn that “A debt crisis is coming.” washingtonpost.com/opinions/a-deb…
I promise to stop when the battle is won. Until then, here’s another attempt to improve understanding and shift our broken thinking about government “deficits.”
THREAD
First, the word deficit. 🤦🏼♀️
It’s a terrible word because it suggests a shortfall.
A deficiency.
A problem.
It’s none of those things.
But that’s how we usually think of the word. Like when the announcer says, “If the Rays are going to come back and win this game, they’re going to need to overcome a three-run deficit against the Dodgers.”
I recently heard someone refer to MMT as “dangerous.” It is upsetting to those who prefer to stay nestled in the conventional discourse, where it is acceptable to change one’s answers to age-old questions but not to challenge the questions themselves. 1/4
Thus, “How much does the government *need* to tax vs borrow to pay for its spending?” can be answered differently by “reasonable” people. 2/4
Dangerous people change the questions: “What is the purpose of taxing and borrowing, and when/why should a currency-issuing government *choose* to do more of either?” 3/4
What a joke. The current crisis demonstrates exactly the opposite—i.e. that nothing you’ve carped on about has mattered one bit, nor did decades of rising debt and deficits prevent Congress from combating the COVID recession.