The median savings account balance is just $5,300[1]. And the thing about savings accounts is that they generally do get spent down periodically - they typically aren't used to continuously squirrel away cash for decades, so you're not compounding interest over the long term. You might save for 5 years and then do a big spend-down to purchase a car, a house, home repair, medical emergency, etc.
So, if the savings interest rate is a paltry 1%, that's just $35. But if it were 5%, it's $265 -- Except now you're paying 1-2 points more on a mortgage, student, and/or car loan. The median household debt is something like $59,000: roughly 10x the amount in savings.
So, you make $230 more in savings interest at the cost of thousands of additional interest payments.
Reducing QE and making debt more expensive seems to benefit a very narrow group of individuals who have the means to store large amounts of cash in safe liquid assets and don't carry significant debts relative to their income. Everyone else is worse off.
[1]https://advisorsmith.com/data/average-savings-account-balanc...
When I was in college, the bank would give something like 6-7% on savings. If I had a million dollars in the bank I could comfortably live off that interest for life. Now if I put a million dollars in the bank, I lose wealth due to inflation, so I'm incentivized to put it in a fund or something now, which is a lot riskier than bank interest.
What were inflation rates while savings rates were 6-7%?
>lose value to inflation
Inflation always erodes money of course, so there was never a time when that didn't happen when there was inflation.
At 3% inflation, that $70K/yr would lose half its purchasing value in the span of 24 years of your retirement. (It also would cease yielding $50-70K per year over that time as well, but that’s with the benefit of hindsight and you could lock in the rate with a longer term CD at retirement. That still leaves you with half the purchasing power though.)
I don’t think savings accounts have ever been a reasonable way to invest the bulk of your money for future retirement.
Related, my dad and a buddy invested $10k in a CD that yielded 21% back in 1984 I think. If the rates are high enough CDs can be an excellent investment. They’re basically risk free. My bank is offering 0.6% currently. Real rates are very negative right now.
In order to leave purchasing power untouched, you need to grow the account by the nominal inflation rate and leave that for next year (especially in the context of having “a comfortable living situation then and today” over a near-30-year period.)
https://www.putnam.com/literature/pdf/II514-59fb3e978431513e...
As someone who's never bought bonds before, how do I know the 7.12% won't change after the 6 months of the locked rate to the 0.00% and whatever pittance they decide to toss my way in an attempt to account for inflation?
Sincere question, I don't know anything about anything.
https://treasurydirect.gov/indiv/research/indepth/ibonds/res...
That's the coupon rate paid by a bond bought at that time (in the late 90s the bonds paid a real return of 3%, which when added to the current 7.12% inflation rate gives a nominal return of 10.12% for the next 6-months).
The rate of those bonds was 3.5% just a month ago, and historically averages around 2%.
source? yields top out at 2.05% right now. https://www.treasury.gov/resource-center/data-chart-center/i...
I do wish savings accounts still had high interest rates and there wasn't so much incentive to invest in riskier assets like stocks.
Yes, people investing in productive enterprise is actually better for real output, prices, and generally overall welfare.
And college debt holders, mortgage holders, generally impoverished people would rather have lower rates on the debt that they have.
They'd also rather have jobs, which again comes with more investment.
They'd also like to have a higher quality of life, again which comes with more investment in capital/production/real output.
Generally impoverished people aren't granted lower rates because of the credit system. They typically pay usury rates. Only people with existing assets / collateral get low rates.
>They'd also rather have jobs, which again comes with more investment.
Generally impoverished people have shit jobs, that's why they are generally impoverished. Also, investment leads to automation and offshoring which actually lowers jobs.
>They'd also like to have a higher quality of life, again which comes with more investment in capital/production/real output.
If investment in capital/production/real output helps impoverished people, it's very little. It generally helps already wealthy people.
You're looking at stuff from a textbook macroeconomic position. In the realistic / microeconomic world, things aren't as you are portraying them.
2. Unexpectedly lower interest rates increase employer competition in the labor market, raising wages. This is well studied.
3. The quality of life of a poor person in the US is unimaginably better than that of someone ranked relatively the same 100 years ago. That is due to investment.
Denying those massive quality life improvements is absurd, although increasingly popular in our out-of-touch political climate.
Why would lower rates lead to increased competition for labor? Or higher wages?
Increased wages follow increases in productivity. I can see lower rates spurring businesses to invest in equipment that would increase productivity, but the experience over the past decade has been quite the opposite: productivity growth has slowed despite historically low rates.
Loans to business, home loans, etc. Education loans really weren't a big thing because education used to be subsidized. Also, poor people aren't the only source of ROI on loans. They're quite lucrative though because they seldom are able to pay the principal and are an endless source of interest payments.
2. Unexpectedly lower interest rates increase employer competition in the labor market, raising wages. This is well studied.
Yet wages have been largely stagnant for 40 years, how do you account for that? Got links?
https://www.epi.org/publication/charting-wage-stagnation/
3. The quality of life of a poor person in the US is unimaginably better than that of someone ranked relatively the same 100 years ago.
I'm interested in how you are measuring this. Got any links? How about the quality of life from someone 40 years ago before neoliberalism?
>Denying those massive quality life improvements is absurd
Which quality of life improvements are you referring to? Are you being intentionally vague? I mean we can buy cheap plastic crap from China, but that's at the expense of US manufacturing jobs, isn't it? Food certainly isn't cheaper. Healthcare and housing isn't either. So yes, if you believe buying cheap disposable stuff from overseas is a massive quality of life improvement, then ok. Take a stroll down middle America and tell me how good they have it. I know lots of towns with boarded up main streets because all the manufacturing went overseas. That's where the investment went.
Again, you're quoting macroeconomic theory when microeconomic conditions on the ground subvert any gains in macroeconomic theory.
How does investment drive up wages when labor investment is say 90% overseas or automation?
Take care, believe what you want I guess.
Like I've met people who could actually give a convincing argument that cars haven't necessarily been the unambiguous tradeoff many believe them to be throw knock on effects in infrastructure and planning.
However, there is also the qualitative look at things as well. Numbers in absolute magnitude we're lower back then, so maybe there's something psychological at work with the larger numbers. There was also a smaller population, lower hanging fruit, the attraction of some level of unknown.
The thing I find most interesting in these disengagements is that they always occur right before people come to terms with "oh, I have to actually lay out my priors." Which is generally, in my experience, where the root of every fundamental misunderstanding is to be found.
For example, farmers with land in 1919 could at least live off it and make a living and feed a family off say 40 acres. Many farmers had their own land and would subsequently start losing it in the 1920s-today due to increase efficiency of farming which requires more land to make the same amount of money. I would argue farmers certainly were better off in 1919 than today, at least in terms of net income.
Now, today, that same family doesn't own land, is probably living in an apartment working for a company that is looking for ways to be more efficient through automation and outsourcing. It's very possible they are struggling to feed their family off a single income, so they have to have dual income. It's very possible one or both lose their job for an extended period of time due to market fluctuation. It's very possible they lose their apartment. I would argue that if that family had 40 acres in 1919, they wouldn't be as dependent on someone else for their livelihood, if nothing else, and could at least feed themselves. Any ability to feed themselves today if all that happened would be due to government programs, not market investment.
Generally when people say "people are better off now ...", they are talking about technology. For example indoor plumbing and electric. Everyone has it now and it's relatively cheap. Back then it was a luxury. So as far as that goes, I would say people have it better today than in 1919. Perhaps not the average poor person on Skid Row who doesn't benefit from indoor plumbing or electricity. I would argue that the proliferation of indoor plumbing and electricity was more government spending / investment than market investment though.
Computers weren't a thing back then, so that doesn't really apply. Again back to agricultural efficiency, computers harmed the average/poor farmer and only helped the large land owners.
Also keep in mind a lot of people were farmers in 1919.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
It's important that people delay consumption so that there is enough room for investments but european countries are running well below capacity. Savings mostly affects inflation rather than the nominal amount of money that can be lent out.
> better [...] prices, and generally overall welfare.
How does investment do that? Plenty examples of the opposite can be found. I find those claims baseless.
Investment also shifts aggregate supply to the right, which causes more output.
I know this is Economics 101, but is there any evidence that this actually happens in practice?
When interest rates go down, house prices tend to climb proportionately as more people take advantage of the lower mortgage rates. The same goes for cars to a lesser degree. So unless you buy a house at the very beginning of an interest rate transition (before the market has settled), the rate won't have as drastic an effect on your monthly payment as you're making it seem. You can also refinance later if you buy when rates are high, but you can't lower your principal.
Also, interest rates affect other types of investments that people carry, such as retirement accounts.
I don't know what the cumulative effect of all of this is, though, so I won't claim that your overall point is incorrect.
The real estate market is inefficient by design (look at Californian zoning). If you made it just as efficient as other consumer goods the problem would be gone. The problem isn't interest rates. It's the inability of the market to respond to them. In theory lower interest would just mean bigger and more dense construction as taller buildings become easier to finance.
In practice people figured out that if they do "sound zoning" the increased amount of money will flow in a handful of pockets. The same is true with "sound money" where the value the economy produces grows as the population grows and becomes more productive while the amount of money stays the same and therefore benefits hoarders.
The boring answer is a land value tax.
Even if you're a first time buyer affected by the price rise, you're better off with a high monthly payment to own a higher value house than a high monthly payment to transfer more interest to people who are wealthier than you.
Obviously this is just an approximation, but "class is calculus" is a very useful mental model.
By that ones, yes, the vast majority of people have negligible liquid savings. So the interest rate doesn't directly matter. Yet, the rich also "own the means of production" --- i.e. real assets, which also doesn't get inflated away. So it doesn't obviously matter for them. So what does it effect?
The essential original Keynesian insight (what most of the factions since might agree on), is that since the point of owning things in Capitalism as money, even if you aren't holding cash, the interest rate effects how easy it is to invest, but also what investments are productive w.r.t doing nothing. This spooky shit is what is supposed to give monetary policy it's power.
The differences in opinion in those factions come down to whether there is always enough to invest in, and access to credit is the limiting factor, or not. The Post-Keysnians would say relying on monetary policy alone is stupid, because (to distill in a parable) if no one can buy your stuff, it doesn't matter how cheap the factor is it's not worth it. That's when directly employing people (jobs guarantee) or handing out helicopter money can make a difference --- it's "root" demand, not some spooky shit effecting supply.
Back to the calculus stuff, an interesting idea is https://en.wikipedia.org/wiki/Demurrage. This is "inflation for stocks not flows". In short, we want money at rest to go bad, so rich people and instutions are forced to spend and we don't grind to a halt via the paradox of thrift. But we don't want people's wages to inflate away, because they certainly cannot bargain hard enough to get enough raise to keep up. Demurrage is wonderfully hamfisted in trying to do the former but not the latter --- money at rest becomes less money, money flows retain their purchasing power.
This money-sucker beaurocracy stuff makes for more sense with e.g. CIA selling drugs rumors than taxation. This isn't some bullion-based monarchy we live in.
This isn't some bullion-based monarchy where you can just debase the silver currency with some copper to deal with your monetary problems.
Be careful this is a dangerous notion: with today's form of fiat concurrency there is net 0 money!
> redistribution
Likewise the "re" is sketchy. The state can pull money in, and take it out. Keeping those balanced because metal bullion skeuomorphisms is confusing. Our insistence that all money is debt is "double entry accounting fetishism" and also needlessly confusing.
Distribution is good. "re" implies some sort of 0 sum, when the fact that the nominal need not be zero sum, and the future us uncertain and full of possibilities, and this is the true beauty of Capitalism we should embrace even as we are sanguine about all the terrible parts.
The methodology in https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/pkrugman/ler... is much better. The state can print money. The state can destroy money. The state can issue securities. The state should not subscribe to any theory a priori, but simply do the simplest thing the achieve agreed-upon goals, and avoid agreed-upon bad things. Theory can be developed afresh, and with far better empiricism, by basing it on actual experiments of the state trying out different levers and seeing what happens.
Only a wealth of practical experience will overcome the highly politicized disputes. We will never achieve consensus while tiny gamut of the policy space is explored.
-------
That is my long-winded way of saying I (think I agree) agree, but please find a different way to say it :).
And as for redistribution, I suppose just “printing” money into peoples account would more or less have the intended effect as well. I do suspect a 10% inflation rate would lead to simple logistics costs as the nominal amounts kept changing.
But yes, if only more policy was evidence based…
[1] https://assets.kpmg/content/dam/kpmg/is/pdf/2016/09/KPMG-Mon...
It’s the other way around. QE lowers interest rates; that’s the main purpose. The idea is that low interest rates force investment in risky ventures (since safe ones are offering low yields) and those risky investments on net will generate excess economic growth.
Economic growth comes from increased consumer spending. Not from investment. We will all learn that lesson very soon.
Consider Rivian which just went public at ~80B valuation (on revenue of 0, mind you). They raised ~10B dollars through investor capital and can now use that to create factories, hire employees and so on. Further, they can issue more shares down the line to finance their growth.
I agree that consumer demand is required to grow aggregate revenues/earnings, and create a stably higher economy. But in theory using investment capital to invest into productive capacity puts upwards pressure on wages, thus longer term consumption.
However, when capital is misallocated it may not result in productive growth.
No, its not. MMT rejects the fiscal/monetary dichotomy as fiction, and tends to prefer more targeted (traditionally “fiscal”) stimulus, without typical fiscal constraints, because it views the only real constraints on “fiscal” actions as monetary effects; QE is blunt stimulus that respects the classic monetary/fiscal divide that MMT argues against.
For example, Republican Jerome Powell is no Pinko, but under his watch the fed has become less closed minded about that "full employment" should look like. This is good, and is precisely because that and the pandemic checks that we are seeing great bottom half wage gains (in real terms too) and increased strikes.
So yes, ultimately you can't trick "the man" with new ivory tower shit, but you can at least attack the straw mans and deflections. Maybe the best theory of change is to create new pandemics so they will have to print more checks to defend the system, and eventually, one of those strike waves will be the revolution :D. (Is this conservationism? I don't think so, because it's about the system's response to a bad thing making "working class lives" better not worse.)
Revolutions almost always result in prolonged mass violence. Most often of the horrific, needless, and soul shattering kind. A sampling of recent revolutions: the Bolshevik Revolution, the French Revolution, Cambodian civil war/Khmer Rouge takeover, Nazi takeover of Germany, Chinese Communist Revolution, the Cuban Revolution, etc etc.
I propose a new heuristic for my fellow HN'ers: if someone pines for revolution, its a very good signal that they are poorly acquainted with history or that they are a sociopath.
I think it is difficult to say now that those were necessarily horrific and needless, without considering the horrors experienced daily under feudal/serf systems.
Moreover, the selection of revolutions you have put together seems one-sided. It was revolution that gave people in Britain the vote, it was (at least partially) revolution that ended apartheid in South Africa and white minority rule in much of Africa writ large, etc. etc.
The Khmer Rouge killed 1.5 to 2 million (or 25%!!!!) of all Cambodians. Pretty tough to argue that the deaths of 25% of any population is anything but needless and horrific, particularly when you learn about Pol Pot's insane and homicidal policies. Imagine if every 4th person you know were dead in the next 5 years because a guy had a plan to... make our lives better by ruining them indefinitely for some distant vision of Utopia.
The Nazis are truly astronomical in terms of both death count and evil. They successfully created an actual hell on Earth.
Stalin's regime is estimated to have killed 20 MILLION of his own people. I wonder if the murdered would say, "Yeah, but its worth it in the end because no more monarchy!"
Mao's derangements are estimated to have resulted in 45 MILLION dead Chinese. That's 45,000,000. Again, I wonder if their surviving loved ones felt better off? Mom was beaten to death for being "a capitalist", but at least we don't have to worry about that darned monarchy anymore! How would you feel if your Mom was beaten to death? How would you feel if your brother or sister were summarily executed based on an accusation? What if you saw your child needlessly starve to death? These aren't just numbers. These are real human lives extinguished for political ends.
Etc. Etc. Etc.
Your logic is truly deranged. Revolutions are really, really, really bad for everyone, and the vulnerable, weak, and poor are not exempt. Most of them can usually just count on good old fashioned starvation in their near futures as the revolutionaries lurch from one disastrous or insane policy to the next. If they don't starve, there's a good chance the revolution will at some point purify them anyway.
So, I'll point you back to my suggested heuristic.
> Mao's derangements are estimated to have resulted in 45 MILLION dead Chinese.
Both of these death estimates are primarily due to starvation (not murder and not the result of violent revolution decades earlier) and are based off of differential estimates of population (ie. counting declining births as deaths, etc.).
Most importantly, they are not comparative with famine deaths prior to these revolutions under the feudal system. Integrated over time, those deaths almost certainly outnumber the deaths due to these events. Moreover, many of those who died post-revolution would never have even had the chance to be born in a feudal society given how many children died of starvation etc. during those times.
Tens of millions of people die of easily preventable deaths (no water, no food, etc.) in the status quo every year. Those numbers were even worse under feudalism. Do those not get to be counted against the non-revolutionary status quo?
You buried the lede. Death per unit time is extremely important. And yes, huge numbers died of starvation as the result of revolutionary, utopian (and insane and nonsensical) policies. But the starvation deaths were the direct result of the violence and insanity. The two cannot be decoupled. So, I certainly would "count" them. I think most people would.
Is there an argument about how the deaths per unit time went down in those countries post-revolution?
> many of those who died post-revolution would never have even had the chance to be born
I'm not ceding this point, but hypothetically, by your logic, these were just bonus lives whose horrible ends shouldn't count?
> Tens of millions of people die of easily preventable deaths
Yes, this is the default state of nature and thus humanity. Violent, cataclysmic revolution is almost never the best (or even a good) solution. There are limited examples of success, but what sane person would bet their life on it?
I think, fundamentally, the problem with violent revolution is that its leaders are most often ideological zealots who are ill-equipped to lead a nation. They tend to think the same tools that gained them power (violence) will yield effective results in governance. Or, and I think this is a more likely explanation, they are probably just sociopathic, power-crazed murderers.
The best case --- if it works --- is "non-reformist reform" as the European social democracies were planning. Some Marxists think it was doomed to fail because you can't avoid the antagonisms. I think they were merely prudish about printing money (especially Germans), and if drank more Post-Keynsian kool-aid (and let in more immigrants not as an underclass like in America), we would all be Socialist already.
Letting in immigrants while you are trying to reduce working hours is a good idea because a) moral b) you are trying to show off you have the best society, let people vote with their feat c) you still need to make investments so being able to have total working hours go up while per-capita working hours goes down is good. Especially if there is a tech/productivity lag where you don't get fully automated dank shit for a few years after you make labor scarce
Letting in immigrants as beneath-the-table workers while trying to lower working hours means you get apartheid not utopia, so yeah, it's bad. The thing that makes America less bad is at least the elite likes to overwork itself for cultural reasons so the rat race is just as stupid but less unfair than it would otherwise be.
The best-of-both-worlds is what I want. The first decently country to let in immigrants while reducing working hours is going to crush everyone else with a strong, more technologically- and culturally-advanced society. I am excited to see it happen.
(incidentally a very vague materialist take on why the soviet union sucked is it began too underdeveloped, and in the rush to do more work they ended up too military-industrial. A lot of people say "not enough consumption" but you ought to connect it being able to let demand "pull" investment rather than centrally "push" investment. More consumer goods or less working hours are somewhat equivalent once you are (post-)industrialized.)
https://www.unhcr.org/refugee-statistics/
Edit: Btw, I think the poster above meant the millions of undocumented immigrants living in USA without full rights.
The US has admitted more than 1.2 million refugees (I believe the number is closer to 3 million), this chart only counts refugees under UNHCR mandate.
"Syrians good, Greeks bad, let's breed Neo-Nazis with austerity so Syrians bad soon too. Oh and more coal." Is that really net good?!
[citation needed]
"Mainstream economic theory" states, AFAICT, that once the monetary side of things has done what it can, you need to proceed to Step 4, fiscal stimulus:
> I would summarize the Keynesian view in terms of four points:
> 1. Economies sometimes produce much less than they could, and employ many fewer workers than they should, because there just isn’t enough spending. Such episodes can happen for a variety of reasons; the question is how to respond.
> 2. There are normally forces that tend to push the economy back toward full employment. But they work slowly; a hands-off policy toward depressed economies means accepting a long, unnecessary period of pain.
> 3. It is often possible to drastically shorten this period of pain and greatly reduce the human and financial losses by “printing money”, using the central bank’s power of currency creation to push interest rates down.
> 4. Sometimes, however, monetary policy loses its effectiveness, especially when rates are close to zero. In that case temporary deficit spending can provide a useful boost. And conversely, fiscal austerity in a depressed economy imposes large economic losses.
* http://krugman.blogs.nytimes.com/2015/09/15/keynesianism-exp...
Can you provide a link to the "mainstream economic theory" that you are referring to that says otherwise?
Krugman at least was a "New Keynsian", which is a very complicated confused thing in the way the neoclassical parts and keynesian pieces are mashed together. I mostly subscribe to the Post-Keynesian stuff, which makes a lot more sense to me, and is more embracing of the weird/humanities side of Keynes. https://vebaccount.substack.com/p/the-post-keynesian-worldvi... is a good primer, and really that person's entire corpus is a gem of really good writing. For something that (at least in the last few years) is much more grounded, try http://jwmason.org/the-slack-wire/.
Now you might say that the opposition's views of the mainstream is an unfair place to begin. To that, I say just look at the shit Larry Summers says.
No, it didn’t.
Mainstream economic theory (or even the major heterodox theories) has never held that monetary policy is a sufficient substitute for fiscal policy in general, and mainstream economists in the US (of all stripes, though they differ on what fiscal policy should be) are always complaining about Congress not taking what they see to be appropriate fiscal action and leaving the economy to the Fed and monetary policy.
Also the theory has not kept up. A lot of people spout decent ideas and do decent empiracle stuff, but the theory is not reformed and opposed to those conclusions so they just ignore it.
Really, the crazy Chicago people to their credit were always more honest about what the mainstream theory actually said. The saltwater people were rather two-faced in making sure they sounded less rediculous but not having an epicycle-free theory underpinning their more reasonable suggestions.
But I don't think adding more caviets to the bad old stories is going to cut it. People need narratives, and if you say "supply curve up, demand curve down, many astrices" you are biasing a certain simplification when people inevitably need narratives.
Really what we need to do is run more big policy experiments at the fed. The more wild policy swings there are, more more politics feels alive, and better are empiracism is. The micro empiracism today is good but barely econ. (It's sort of abstract social science do a tiny thing and then stats.) The macro empiracism is still frequently quite bad, where better data would help but clearer trends from legit experiments would help even more.
I totally disagree with this. Big social policy involves/requires taxation, and a robust debate around what kind of tax regime we want to have in order to support those social policy objectives. The Fed can't collect taxes, and it doesn't involve robust debate because it's not democratic.
Fair.
Let me step back a bit, I do agree the undemocratic fed is ultimately bad. But I also wouldn't want to subsume it to congress in today's state, because FTPT, Senate, and supermajorities are not democratic, and ensure no experiments + tiny overtone window of things where are actually.
I like democracy, but the problem is democracy in its current US form (parliamentary system is better but EU constitution is fucked and causes similar problems) is best at interpolating the options that have been presented. If the democratizing happens with out expanding the "doing" overtone window, it's like 100% exploitation not exploration, and we are also kinda fucked.
It's frustrating because alternative democratic methods would probably be great for experimentation. Highly ideological parliament + independent civil service + sortition for skepticism is an exciting potential brew.
> Big social policy involves/requires taxation
No it actually doesn't, because "potential output" barely exists and to the extent it does we are nowhere near it. We can print money, and if there is inflation we can fix bottlenecks --- like WTF why isn't the port of Los Angelis twice is big by now with tons of extra rail freight capacity?
When there is no obvious benefit, and labor force participation is actually high (vs the headline unemployment rate which is widely acknowledged to be bullshit) then, and only then, do we need to worry about reducing demand across the board with taxes.
I agree with you that there are some decidedly undemocratic elements to many "democratic" systems (such as the ones you've mentioned), and to be clear I wish that was not so. But these same democratic systems have historically not just expanded the overton window, but exploded it: the advent of progressive taxation in the early 20th century; the advent of high income tax rates in the 1930s-1950s; the social welfare states that most social-democratic European governments erected in the 1950s-1970s (and the skeletal welfare state the United States erected at the same time) - just to name a few.
> We can print money, and if there is inflation we can fix bottlenecks
We can't just print money to the extent that's required for the really big policy changes. You want a UBI? A universal capital endowment? Free health care? These things require significant revenue to sustain year after year after year. I don't think that's necessarily a problem, there just isn't a free lunch. And the US is the most likely to be able to get away with it: there are plenty of nations that don't entirely control their monetary policies (EU countries, for example)
It seems when the rate of change is endogenously high, things have happened in the US, but now with more stagnation the many veto points strikes harder.
> We can't just print money to the extent that's required for the really big policy changes.
I still disagree.
Free healthcare especially can save money because the current thing is so inefficient --- though in the first few years I expect the backlog of "deferred maintenance" to get in the way.
Unpayed UBI is scarier, but I think we can still try it. There might an awkward adjustment period, but I wouldn't be surprised if it his a new steady state.
> And the US is the most likely to be able to get away with it
Yes
Last thing to consider is the MMT reversal scenario, where the technocrats just worry about reaching "potential", and quantitative stuff ensuring enough spending and taxing, and the politicians decide the qualitative stuff, and also what level of inflation is acceptable -- because it is still a subjective decision somewhat.
In particular, doing a UBI first might be the best way to force higher taxes: people will fight harder to keep their existing UBI than they will to get a UBI in the first place, so with inflation vs loosing it vs more taxes or JG (which is supply and demand of a sort), the latter options might have a better shot.
So far as I recall, interest rates on savings accounts have never been greater than inflation. That is, the money stored in a savings account would not grow in real terms. That's true with or without QE.
1) Interest rates that are low mean that middle-class savings accounts don't grown in size. QE requires low interest rates as I understand it.
2) MMT is linked to QE but guess what, an oligarchic system isn't going to distribute QE capital to middle class and poor people, it's going to go into the pockets of the ruling class.
In any case, you really can't trust the corporate economists, and their performance before the 2008-2009 economic crash is proof of that. It's as bad as if the entire climate science community had predicted global cooling and we got global warming instead - clearly, the scientific community would conclude that their models are fundamentally flawed.
This of course is why economics professors are safely enclosed in university business departments, so they don't have to face constant ridicule from real scientists.