[SueDeNîmes]

Yes, you have a very good point.
And yet my point still sort of stands. That is, if the later taxes that generate the surplus are really coming out of the pockets of the rich, then the workers end up with the stuff they bought from the rich people's companies. It is the rich who get screwed when the money they got for their stuff is taken later. OTOH, if the taxes that are creating the surplus fall much more on the workers then we are back to it being unfair. The workers worked and got paid and then later either their savings is sucked away or some of their current income is sucked away making them work for less after tax income. Either way it is not fair.
But, you're right, if the rich are taxed then it is much more OK. MMT still says it is unnecessary. So, why do it?

I'm not sure it is particularly unfair, since they're still better off than if the economy had shrunk (and I wasn't really saying anything about taxing workers vs the rich).

But it does seem unnecessary. Barring serious inflation, I can't think of any good reason to do it.

I can think of some not very good reasons :

- gov'ts are often bound by trade treaties to limit deficits and preclude outright "helicopter money" (e.g. Britain, being in the EU but not the Eurozone, by Article 123 of the Lisbon Treaty). The idea is to avoid competitive devaluations.

- much economic theory gets bastardised to suit elites, which all too often means money lenders of one sort or another. And the last thing they want is people believing that money is anything other than a scarce, finite resource.

To your 2nd point --- we have to be careful to keep in mind that the current Keynesian economic theory as elaborated by current Keynesians likely will *not* very well reflect all that Keynes said or wrote himself. Saying that Keynes said something different here or there doesn't disprove that Keynesians do in fact say "such and such" now.

Yep. "Bastard Keynesianism", as Joan Robinson called it.

[Rugoz]

You missed the savings component. It's not really crypto currency but it is a digital form of money. When you link your bank card and pay out of a bank, it is a cashless payment system. But as I said, there is more money deposited in Alipay than in Chinese banks now, because of higher interest payments, as well as access to the money. It pays around 4% apr, compounded daily (365 days a year), although the interest rate changes day-to-day. When people transfer their money into Alipay or WeChat pay for savings purposes, it becomes a digital form of money. And this is only available in China--and the savings component is only available for Chinese nationals (although it has come to be accepted by vendors in other countries, largely to serve Chinese tourists).

So it's like a normal bank. Hurray.

[Crantag]

So it's like a normal bank. Hurray.

It's actually not.

The internet has changed the game.

As it were, Alipay (and probably WeChat too) makes money through inter-bank lending. So it's a bit of a bank's bank in that sense.

[Steve_American]

I'm not sure it is particularly unfair, since they're still better off than if the economy had shrunk (and I wasn't really saying anything about taxing workers vs the rich).
But it does seem unnecessary. Barring serious inflation, I can't think of any good reason to do it.
I can think of some not very good reasons :
- gov'ts are often bound by trade treaties to limit deficits and preclude outright "helicopter money" (e.g. Britain, being in the EU but not the Eurozone, by Article 123 of the Lisbon Treaty). The idea is to avoid competitive devaluations.
- much economic theory gets bastardised to suit elites, which all too often means money lenders of one sort or another. And the last thing they want is people believing that money is anything other than a scarce, finite resource.

Yep. "Bastard Keynesianism", as Joan Robinson called it.

MMTers say there is one very good reason to not do it [i.e., run a surplus to pay down the borrowing that was made in the last downturn]. It is that running a Gov. Surplus, by definition, means that the people and Companies are paying more in taxes that the total Gov. spending. This means that the people are having their savings sucked up by the Gov. And the people's response to this is always to stop spending rather than to draw down their savings. When the people stop spending the GDP drops and this always soon starts a Recession.

I have a thread up now about the Story of Neo-liberalism. In the the guest talks about how the rich people got together and planned to create think tanks that would hire a lot of economists who would spout what the rich wanted them to spout and make it sound like an unbiased assessment of how the economy works. But, it is all based on false premises. Premises like banks don't create dollars when they lend they just lend the dollars that depositors lent the by making deposits; so they just factor the entire banking system out of their models. Or, like every person who buys or sells stocks knows every fact there is to know about the company who's stock they are buying/selling. Or, like the economy is in equilibrium almost of the time, even though the people in it are trying to find every angle they can to leverage their money more than anyone else can. Or, that it is necessary to avoid too much deficit spending to avoid hyperinflation. All of these and many other premises in economics are plainly false. So, yes, the rich do pervert economic thinking to help them screw everyone else.

[Rugoz]

It's actually not.

The internet has changed the game.

As it were, Alipay (and probably WeChat too) makes money through inter-bank lending. So it's a bit of a bank's bank in that sense.

Inter-bank lending is something banks do all the time.

[Rugoz]

- gov'ts are often bound by trade treaties to limit deficits and preclude outright "helicopter money" (e.g. Britain, being in the EU but not the Eurozone, by Article 123 of the Lisbon Treaty). The idea is to avoid competitive devaluations.

That makes no sense.

Fiscal expansion comes with increased imports, currency appreciation and reduced exports (ceteris paribus). That is why in small open economies with flexible exchange rates the fiscal multiplier is small and thus fiscal policy largely ineffective. Competitive devaluation is done through monetary policy. Needless to say this is not an option for individual Eurozone countries.

[Crantag]

Inter-bank lending is something banks do all the time.

Jack Ma, the owner of Alibaba, said something to the effect "if the banks won't change, we will change the banks".

If you don't really understand how Alipay is unique it doesn't matter much, but it is actually pretty unique.

It is worth taking notice of.