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^^ This is a straw man. I also agree that runaway inflation is bad. Almost everybody does.

What I wrote above cannot, under any serious interpretation, be considered as a defense of runaway inflation.




Help me understand where I went wrong reading this. I read, paraphrased: "The problem with MMT is that if everyone believes in it, they'll do things that cause inflation to rise", and "This is a problem primarily for the investing class".


That's accurate. Note that I did NOT say that it would cause runaway inflation.

Runaway inflation (or hyperinflation, if we're being terminologically precise) == Inflation > 50% per month == Zimbabwe destroying its farmland and industry and having nothing useful to export and thus not having an economy that can support the current level of spending.

Rising inflation == The US deciding, according to MMT principles, in the next decade that "fiscal responsibility" is not a reasonable justification for preventing medicare for all and maybe seeing a percentage bump in inflation as a result.


MMT economists don't support inflation at any level, do they? They support alternative means of controlling inflation. Put differently, it sounds like you're using "MMT" as an incantation to dismiss inflation, which would be unfair to the MMT'ers.


>MMT economists don't support inflation at any level, do they?

MMT does not make normative judgements on inflation. It does state that taxation and fiscal spending are more effective control knobs to target inflation than monetary policy, but that isn't a normative judgement either.

>it sounds like you're using "MMT" as an incantation to dismiss inflation

I'm giving context to why hyperinflation / inflation scaremongering surrounding MMT exists.

I'd do it for the same reason for why I'd reference oil company profits in reference to global warming skeptics - because it's the responsible thing to do to associate the motive for spreading bad science with the bad science.

Naturally this gets abuse slung at me - with phrases like "left-wing back-rationalized voodoo economics" slung around for instance.


Can you source your claim that MMT doesn't make normative judgements on inflation? That's not my understanding, it's not what this article says, and it's not what Kelton said in her debate with Jason Furman on Ezra Klein's show. As I understand it --- once again --- MMT says inflation is bad, but that there are better ways to control it than monetarism and fiscal austerity.

The distinction between my understanding and yours is highly material, because in my understanding, an attempt to actually deploy MMT policies at the Fed in the service of (say) single-payer that resulted in rising inflation would be a problem and evidence of failure, and in your understanding it wouldn't. In my understanding, the MMT economists would say "here are a set of policy levers we should use to ensure inflation doesn't increase", and in yours MMT economists would say, essentially, "single payer is worth extra inflation".

The idea that inflation and deficits simply don't matter as much as conventional economists think it does is, as I understand it, a caricature of MMT that actually annoys MMT economists.


>Can you source your claim that MMT doesn't make normative judgements on inflation?

It's in the name - modern monetary theory. Much like the theory of gravitation does not posit that gravity is "bad" or "good", modern monetary theory does not posit that inflation is bad.

>That's not my understanding, it's not what this article says, and it's not what Kelton said in her debate with Jason Furman on Ezra Klein's show.

Much as your earlier posts massively misrepresented what I said, I strongly suspect you are misrepresenting what others said.

>In my understanding, the MMT economists would say "here are a set of policy levers we should use to ensure inflation doesn't increase", and in yours MMT economists would say, essentially, "single payer is worth extra inflation".

MMT economists might very well opine that extra inflation is worth medicare for all and at the same time set out a set of policy levers which can bring down inflation if desired. One is a normative statement; the other positive.

>The idea that inflation and deficits simply don't matter as much as conventional economists think it does is, as I understand it, a caricature of MMT that actually annoys MMT economists.

I think the personal feelings of many MMT economists is probably that a slightly elevated inflation doesn't matter that much. There are economists who are motivated by money and prestige who will naturally gravitate towards, for example, richly funded think tanks representing investor interests and there are economists who are interested in figuring out how the economy actually works.

These two groups will naturally have differing personal feelings about inflation precisely because the people who pay their bills do.

I think what pisses them off are the people who say that MMT is simply a theory that says governments can spend limitless amounts of money.


Thanks, I'm pretty comfortable with what this thread says about your argument and mine at this point.


MMT is both a description of the current system, a system that is already in place, and a set of policy proposals. So "believing" in MMT may simply mean understanding clearly the process already happening.


I think the argument that MMT is non-normative with respect to inflation is simply false. I'm not an expert, but, like, I've read things other than this article, and in all of them (along with this article) MMT proponents are at pains to point out that "inflation doesn't matter" is a misconception.


As a neutral observer, it feels like if you’re right you could easily show it by literally finding 3 normative judgements on inflation by prominent MMT proponents, and pasting them here, rather than referring to “I’ve read things”


Well, your first would be this article, as I said.

Your second would be the debate between Furman and Kelton on the Ezra Klein podcast, as I said.

I'll dig up a third cite. Like, one of the things in my head is the Kelton vs. Krugman argument, which I read on Krugman's blog, but that's not the best cite, since you're getting Kelton secondhand through Krugman there.

Happy to help. If you'd like to help too, you could cite a source that says MMT'ers feel like inflation doesn't matter.


On the discussion with Kelton and Furman on the Ezra Klein show: I came away frustrated, because I felt that every time Kelton tried to delineate an ideological difference, Furman disagreed that it was in fact a difference. I found it a good discussion on economics, but no clear line-in-the-sand between MMT and orthodox economics.


I have Ctrl-F’d through the article for “inflation” and only see “excessive” inflation as being normatively judged. Which bit do you feel supports your assertion?




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