LOL. Well, I agree with these guys that trickle down doesn't work that well. I've argued against the Fed's QE for some time now, because that is the mother of all trickle down theories and Obama and the Dems loved it. But QE just enriches the asset holders through bond and stock and housing inflation. How does that help the 99%? The answer is that it doesn't, because the 99% owns less than very little of those three things. But MMT is like QE for the people. So the MMT proponents like these two think that's great.
But let me do a simple thought experiment with you to explain why this is a really bad idea. Let's say you have some guests coming over. 5 people in total. You figure buying one cherry pie is enough to split 5 ways. Each person gets 1 slice of pie. That's a pretty good portion and everyone would be happy. But at the last minute, each of those 5 people call to tell you they are bringing their significant other. So it's 1 hour before the party and now you have 10 people coming and only 1 pie. A proponent of MMT will tell you, hey ggersh, don't worry about it. We'll just take the 1 pie and slice it into 10 pieces. That way each of the 10 people will each get 1 slice. Same exact thing as before, the MMT says, each person gets 1 slice.
Now, an Austrian economist or really any business person would tell you this is crazy talk. Each of those 10 slices will be precisely one half as large as the original slices that were intended for each of the 5 original guests. So everyone is getting a lot less than you intended.
A Capitalist would have told you that it would have been better to buy another pie and keep the slices the same, so you don't devalue the guests' expectations. Or they would have said it is better to GROW the pie to twice the original size, so that each of the 10 slices of the bigger pie will have similar volume as each of the 5 slices of the smaller pie. Capitalists focus on growth and creating intrinsic value, whereas Socialists and MMTers are charlatans that are trying to sell you a free lunch that they'll take from someone else to give to you.
The point is that everything in life has consequences. There are many ways for the government to pay for things they can't afford: 1) tax the people more, 2) borrow more money, or 3) print more money. All 3 methods are just borrowing wealth from the future to live better today. All of those things are bad for the long term health of our standard of living.
I'll give you one more example. If a group of 10 people each have $10, for a total of $100 in our economy and I promise to double your wealth by printing $100 and distributing $10 to each of you, does that really make you twice as rich? Or did the price of things that you want just double as well, which means you are exactly the same net worth as before, based on the things you can buy? The answer is the latter. These are all just shell games. Don't let them fool you. There is no free lunch. |
