This is just underlining my question. If the congress were operating with an MMT view of the world, they could have injected money into beneficial social program without handwringing over deficits, avoided QE. Regular people would have more wealth in their hands, and less money would be running around the stock market inflating assets. We would have a healthier economy today.
> By comparison, if the government announced that starting in 2020 it would start paying for everything by printing more money
This isn't what MMT says to do, it keeps taxation as a control parameter, it just wouldn't be singularly obsessed about the budget deficit.
Avoiding bank runs and the collapse of financial institutions is a pretty massive social benefit, even if it does turn into "bailing out wall street" memes.
> This isn't what MMT says to do, it keeps taxation as a control parameter, it just wouldn't be singularly obsessed about the budget deficit.
The whole premise over MMT as compared to standard government revenue streams is to reduce or substantially eliminate dependency on taxation by having the government print the money it needs. As pointed out earlier, if MMT simply refers to any amount of increase in the money supply then governments already have been practicing MMT for decades.
Again, simply look at what the proponents of MMT are promising. Universal service and government provided jobs for everyone that wants one. Peel off the veneer of the whole premise of inflation vs. taxation and it's really just a means of trying to let the government spend way more money by obfuscating revenue streams.
In the immediate crash, I agree, but in the years after as QE kept being needed to stabilize the system, there were other choices. There could have been a different program to inject money directly to the people who took out mortgages, requiring lenders to take a principal write down at the same time. This would have left more wealth in peoples hands, instead of funneling more wealth and assets into bank hands. And in large part it was fear of deficits that prevented consideration of these options.
The argument isn't to "government spend way more money", it's to make a more balanced consideration of how we actually use the power of currency for beneficial purposes in the long term.
In theory, yes. In practice, not at all. Recessions are exigent circumstances, and no one was under the impression that the government would continue increasing the supply of money to pay for arbitrary things. Not to mention, the bulk of this quantatitive easing took place during two years were we saw deflation - so increasing the money supply was something the government would have likely done anyway.
By comparison, if the government announced that starting in 2020 it would start paying for everything by printing more money then the first thing that will happen is that smart, wealthy, people will just move their assets into things other than dollars. Like resources futures, which are independent of inflation.
The people who actually take on the burden of taxation are people who don't have the means or know-how to manage their assets. So the result is probably that poor and middle class people are even worse off.