Re:A Beginner’s Guide to MMT
by conanbatt on Friday March 22, 2019 @10:29AM
(#19462826)
Increase spending by printing, and then increase spending by taxes, sounds like a big-gov wet-dream.
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I think that you're correct using common terminology. The government takes in money as taxes, and creates money through printing:
spending = taxes + printed money new money supply = old money supply + printed money
But, I believe that MMT is saying that taxes and spending could be logically separated by assuming that all taxes go to the shredder and all spending comes from newly printed money:
spending = printed money new money supply = old money supply + (spending - taxes)
So it wouldn't be 'increasing spending by taxes', it would be 'reduce inflation by taxes'. The size of 'big-gov' should be measured as spending/GDP regardless of the actual tax rate. The tax rate would float depending on the current inflation target instead of on the current federal spending.