Re:U.S. inflation rate rises to 13-year high of 5.4%
by mindslight on Wednesday October 13, 2021 @07:24PM
(#28858776)
I agree with you - MMT mostly just acknowledges the dynamic that has already been in place for the past 50 years, ultimately letting the government regain the power to spend money where it deems fit (eg infrastructure), rather than being bound by this "lending" facade that mainly directs new money to the financial industry.
What I mean by it causing price inflation is that money directly spent (especially on social welfare programs) tends to flow to consumers within one or two hops, where it will directly bid up the CPI. Whereas money that is "loaned" tends to linger in the financial economy and mainly causes asset inflation (which only eventually, maybe, causes price inflation). By making the economic feedback loop shorter, MMT makes the results of monetary inflation more apparent, and from an Austrian perspective this is a good thing.
What I mean by it causing price inflation is that money directly spent (especially on social welfare programs) tends to flow to consumers within one or two hops, where it will directly bid up the CPI. Whereas money that is "loaned" tends to linger in the financial economy and mainly causes asset inflation (which only eventually, maybe, causes price inflation). By making the economic feedback loop shorter, MMT makes the results of monetary inflation more apparent, and from an Austrian perspective this is a good thing.