MMT is the counter example to that, and it’s how all sovereign currency issues work right now.
In the US, taxes do not fund the government. They haven’t since at least the death of the gold standard. They act as a way to remove currency from circulation. The US just prints money and allows individual banks to print nearly unlimited money. It taxes in order to remove money from circulation and keep inflation at the target, but even then inflation isn’t necessarily connected to the amount of money available, just the perception of money available.
There’s plenty of ways to use MMT in other ways though, to print more money. If we create a function to invalidate ‘dead’ or noncirculated money, then we can print triple thr amount of money we do without raising the rate of inflation… But that would hurt rich people.
MMT is popular among politicians because it makes money seem free, but reality gets in the way when countries increase their printing and inflation goes up.
It certainly did, inflation started right before the lockdowns started in response to the market shock from the rumors, and hasn’t stopped or massively slowed. It was not higher during the various stimulus packages or giveaways.
MMT is the counter example to that, and it’s how all sovereign currency issues work right now.
In the US, taxes do not fund the government. They haven’t since at least the death of the gold standard. They act as a way to remove currency from circulation. The US just prints money and allows individual banks to print nearly unlimited money. It taxes in order to remove money from circulation and keep inflation at the target, but even then inflation isn’t necessarily connected to the amount of money available, just the perception of money available.
There’s plenty of ways to use MMT in other ways though, to print more money. If we create a function to invalidate ‘dead’ or noncirculated money, then we can print triple thr amount of money we do without raising the rate of inflation… But that would hurt rich people.
MMT is popular among politicians because it makes money seem free, but reality gets in the way when countries increase their printing and inflation goes up.
Except you have the order reversed, especially with recent inflation where inflation happened before the increase in monetary supply.
More often than not inflation under sovereign monetary issues is solely due to outside forces, not money supply.
Covid inflation didn’t happen before the increase in money supply.
It certainly did, inflation started right before the lockdowns started in response to the market shock from the rumors, and hasn’t stopped or massively slowed. It was not higher during the various stimulus packages or giveaways.