Puffer Fish wrote:I notice that once again you did not make any attempt to explain how that works in your post. You just provided a link.
(A link that doesn't even work and takes a lot of trouble on our part to get it to work)
When you talk about "money", what you are obviously referring to is spending power. It remains a mystery how shuffling around some paper could increase overall wealth in the economy.
By spending power, you must mean that you think that dollar for dollar inflation will reduce the spending power of all dollars.
IIRC, it was wat0n who agreed that recently the MS Economic theories were changed so that only recent deficit spending is going to cause inflation. Do you agree with that?
I remind everyone that you can choose to google MMT along with Wray, Mosler, Kelton, or Bill Mitchell to get the complete arguments straight from the founders' mouths.
I can only try to explain it to you.
1st I'm not an expert. The final claims are not in doubt, only my understanding of how to get there may be wrong.
The expert founding MMTers assert that it is only the availability of labor and other real resources to the nation that limits how much it can spend.
For example, if the labor and other real resources are available to the nation, it can deficit spend to open a mine and mine a mineral or many, along with building a factory to make something and give it to the people for free. This will IMHO certainly increase the real wealth of all the people.
. . Doing this will increase the incomes and therefore the spending of the workers. This increased spending is included in the assumption that the real resources are available to the nation. The additional energy use to do it is covered by the same assumption.
. . In fact, the nation could sell the something to all the people who want it at a low price.Do you agree that that would increase the real wealth of the nation? If not, why not?
The claim of MMTers is that this is also true when the deficit spending increases demand in the economy and the corps invest to increase output to meet that demand. [They assume a good economy with no monopolies, etc.]
So, the claim is that there are labor and real resources available to the nation that are going unused.
The Free market doesn't use them because there is no demand (with money to pay) for whatever could be made out of those resources.
. . MMTers assert that the problem in such a nation is a lack of enough money to create the demand to buy more stuff.OTOH, MMters all also agree that ACC is going to end civilization soon if we don't act now.
. . So, what they really want is to massively increase deficit spending on green stuff. Also, support the minimum needs of all the people while ACC is doing its thing.
At least, Prof. Bill Mitchell has said repeatedly that he doesn't care if some businesses can't make a profit after the MMT national Job Guarantee Program has raised the min. wage to over $20/hr. with full benefits. Note that, he is assuming that prices will increase and level off. And also that, workers will have more to spend and so small businesses will sell more and can charge more.
. . He asserts that prices will level off, because the national JGP will anchor the price level and not let inflation continue.
. . Also Soc. Sec. will pay more to keep up with prices, until they have leveled off.