Some nuggets from the post. Subscribe if you'd like to read the entire thing (it's long).
"As governments embraced the use of robust fiscal policy, a growing number of commentators started to assert that 'We Are All MMTers Now'.”
The problem is that too many people still think MMT is about "printing money" to pay the bills. It isn't!
Can we blame "MMT" for the run-up in inflation? Of course not.
Should go without saying, but I went ahead and stated the obvious.
"Alongside the debate over what caused the current bout of high inflation is a debate about how to resolve the problem."
Does MMT require a tax hike to fight inflation? No, and that was *never* the MMT solution.
So what *is* the MMT solution?
It depends on the diagnosis!
"There is no one-size-fits all policy solution in MMT because every inflation is different. As my husband (a history professor) recently put it, “If you’ve seen one inflation, you’ve seen one inflation.” And that’s a point that Fed Chair Jerome Powell seems to appreciate."
/end

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More from @StephanieKelton

Dec 31, 2021
What follows is a THREAD, posted on behalf of Professor James Galbraith, who is not on Twitter but who asked me to share his reaction to this.
"I'll bet that Paul Krugman has not read Isabella Weber's magisterial history, How China Escaped Shock Therapy, recommended by Adam Tooze in Foreign Policy, by Martin Wolf in the Financial Times, and by yours truly in Project Syndicate, among many other plaudits and prizes...
If he had, Krugman might be aware that Professor Weber knows a great deal about price controls and their role in a larger policy setting. And not only in China, but also in the US, which Chinese reformers studied closely in coming to their decisions...
Read 7 tweets
Apr 13, 2021
Let’s play the “pay for” game. Suppose you want to spend $3-$10 trillion on a Build Back Better agenda. You’ve decided that you’re going to play the “pay for” game, which means you will show where every dollar you plan to spend is going to “come from.” 1/
The whole point is to appear “fiscally responsible,” showing that you can carry out your spending without adding to the deficit. In other words, for every dollar you want to spend INTO the economy, you have a plan to rip a dollar OUT of someone’s hands. 2/
The Biden administration has put forward their plan, which mostly relies on raising taxes on corporations. The president says it will raise more revenue (over 15 yrs) than he is proposing to spend (over 8 yrs). Don’t ask me why. 3/
Read 10 tweets
Apr 9, 2021
Yesterday, @jasonfurman tweeted out my NYT piece on the Biden infrastructure proposal. He claimed I had ignored the most obvious way to deal with any inflationary pressures that might arise—i.e. Fed rate hikes. 1/ nytimes.com/2021/04/07/opi…
I don’t share Jason’s view that fiscal policy can safely ignore inflation risk since the Fed can always handle any resulting inflation. Congress should not ignore inflation risk when contemplating a multi trillion-dollar spending package. That’s just irresponsible. 2/
I also don’t share the the view that the Fed can easily keep inflation in check via rate hates. I think it’s complicated and not settled science that rate hikes will temper inflationary pressures by dampening aggregate expenditures. 3/
Read 19 tweets
Mar 3, 2021
Had some further thoughts on the Orzag intervention. 1/12
The big breakthrough will come if/when Congress changes the way it approaches the use of "offsets." Right now, offsets = pay-fors. The purpose of *offsetting* spending is to neutralize the impact of the spending on the budget outcome--i.e. to keep it deficit neutral. 2/12
That is not how we should think about offsets. In MMT, offsets are explicitly about inflation. You don't need a binder full of revenue-raisers--i.e. offsets--to neutralize the impact on the budget. 3/12
Read 12 tweets
Mar 2, 2021
THREAD
In 2007, Congress amended the Fair Labor Standards Act of 1938 to gradually raise the federal minimum wage from $5.15 per hour to $7.25 per hour. The new minimum wage was phased in over two years. How did it happen? 1/4
The bill was introduced in the House on Jan 5, 2007 and passed on January 10. All 233 House Dems voted "Aye." 82 Republicans joined them in voting "Aye." 2/4
A cloture motion in the Senate failed after President G.W. Bush said he wanted tax cuts for small businesses that might be adversely impacted included in the. 3/4
Read 4 tweets
Feb 24, 2021
“In truth, the only bond vigilante the US faces is the Fed—Congress allows it to raise rates whenever it wants ... But even if the Fed abandons low rates, the Treasury can ‘afford’ to make all payments on debt as they come due, no matter how high the Fed pushes rates.” 1/5
“Affordability is not the issue, but rather the desirability of making big interest payments to bond holders and potential effects on aggregate demand and hence inflation.” 2/5

tandfonline.com/doi/full/10.10…
“[T]he US Fed is a creature of Congress, and Congress can seize control of interest rates any time it wants (and in WWII interest rate policy was essentially dictated by the treasury).” 3/5
Read 6 tweets

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