Economics for Idiots

[monkey]

Ultimately MMT is a variant of basic Keynesian economics. Bits of the variation are usefully, others are incorrect.

As far as I can tell it is just Keynesian economics and doesn't really tell you anything new.

But the people who like the idea tend to be a bit culty and about it and think it means that there are no limits to government spending. I've met some who thought Jeremy Corbyn was into austerity because Labour had a fiscal rule.

[bjn]

Which is what Richard Murphy and others argue for. Basically saying the current govt debt can be ignored - which is true.

Ultimately MMT is a variant of basic Keynesian economics. Bits of the variation are usefully, others are incorrect.

What are the usefully bits and the incorrectly bits? Happy to read a book/website rather than have you type.

[bjn]

It's not an entirely separate problem at all. It's the very heart of the problem. Economics exists because resources are limited.

Crossed porpoises I think. Creating government debt should reified into some sort of taboo evil to be avoided at all costs. If a thing needs doing and can be done, the debt should be issued to do it. Appropriate prioritising of things and matching of available real world resources to do your things counts of 'can be done'.

[Sciolus]

Inflation is missing from the thread because it is missing from reality.

There is simply no real world inflation. Even a Brexit and Covid shocked UK economy is not seeing an inflation shock.

In 2008-10 I had to listen to you lot jumping to the "But inflation" myth and I'm not going to hear a word of it now. We're trapped in a deflation world for solid and long lasting reasons.

I'm puzzled that the increase in costs to business from covid and Brexit don't seem to be feeding through to inflation. Surely government support hasn't been enough. Have businesses just been absorbing the costs or closing? Or are there macroeconomic effects keeping inflation down despite the drop in productivity?

[discovolante]

I'm reading The Production of Money by Ann Pettifor at the moment. It's basically a Keynes love-fest. It's quite short and a fair amount of it is 'look how bad the bankers and politicians are', some repetition (or perhaps, hammering home the main message) and some stuff referred to that isn't actually explained properly within the book but mentioning it here if anyone wants to comment. I think it does a decent job of setting out how classical/mainstream economic theory i.e. the stuff you would come across as a member of the public tends to pretty much ignore the role of private finance and just focuses on government action and the consumer economy which is something that bugs me a fair bit, as a fellow economics noob.

[bjn]

It's not an entirely separate problem at all. It's the very heart of the problem. Economics exists because resources are limited.

Crossed porpoises I think. Creating government debt should not be reified into some sort of taboo evil to be avoided at all costs. If a thing needs doing and can be done, the debt should be issued to do it. Appropriate prioritising of things and matching of available real world resources to do your things counts of 'can be done'.

Fixed it for me.