Modern Monetary Theory

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savvypaul
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Modern Monetary Theory

Unread post by savvypaul »

A short video about government debt and deficits. We're being bombarded with hysteria about how the government is going to 'pay for' the current economic crisis and we need to understand how government finances work. Professor Kelton talks about the USA, but this equally applies to Britain...

https://www.bbc.com/reel/video/p08jbbry ... jWDUiutKAg
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NSNO2021 (Mon Nov 16, 2020 6:37 pm)
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Re: Modern Monetary Theory

Unread post by NSNO2021 »

HiFiSubjectivist ~~~ more than just a HiFi forum :-)
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Re: Modern Monetary Theory

Unread post by Lindsayt »

She uses a huge non-sequitor.
It's quite possible that the large economic prosperity since World War 2 is despite government spending, not because of it.

Also look at 20th century history. The countries where the government had the biggest control over total spending, were they the most prosperous?

As a hypothetical situation, if the vast majority of government spending were to be phased out over the next 10 years, with a corresponding reduction in taxation, what effect would that have on the economy? What effect would it have on you personally?

If the UK, or even a county in the UK were to become a tax haven, what effect would that have?

When something is run by a government, how efficiently does it tend to run?

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Re: Modern Monetary Theory

Unread post by savvypaul »

Lindsayt wrote: Tue Nov 17, 2020 12:24 am She uses a huge non-sequitor.
It's quite possible that the large economic prosperity since World War 2 is despite government spending, not because of it.

Also look at 20th century history. The countries where the government had the biggest control over total spending, were they the most prosperous?

As a hypothetical situation, if the vast majority of government spending were to be phased out over the next 10 years, with a corresponding reduction in taxation, what effect would that have on the economy? What effect would it have on you personally?

If the UK, or even a county in the UK were to become a tax haven, what effect would that have?

When something is run by a government, how efficiently does it tend to run?
To answer, I will need a greater understanding of your questions.

Do you consider 'control over spending' to be the ability of sovereign currency nations to inject money into an economy, as suggested in the video, or do you mean those countries who have spent less? Or something else? Could you also explain how you judge prosperity.

I don't understand the motivation for your question about the hypothetical phasing out of all government spending. Are you making a link to MMT (in which case I dont understand how or why) or are you suggesting that phasing out all government spending would be a good (or bad) thing? Or something else?

Same again regarding your question about if the UK became a tax haven...and your question about 'when something is run by the government'.

MMT does not suggest that taxation is wrong or unnecessary, it suggests that it is important...but for a different reason to the one that we traditionally think of.
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