Modern Monetary Policy (MMT) should not be dismissed as unlikely to influence policy says Federal Reserve Chairman Jerome Powell.
The Theory argues that countries that issue their own currencies can never "run out of money" the way people or businesses can. It's more complicated than that of course but it amounts to a windfall for big spending progressives. Here is a great Vox article that tries to explain how it works.
So if MMT prescribes various regulations (and when necessary, taxes) to control inflation, while keeping interest rates at zero, how does it plan to achieve full employment?
Simple: a job guarantee!
The idea behind such a sweeping and universal program, in the context of MMT, is to ensure full employment no matter what policies the government is adopting to fight inflation. Indeed, the job guarantee is in part a way to keep wages down, or at least keep them from continually rising, to prevent an inflationary spiral.
Where to begin..... Did I say this was terrifying. There are so many things that can go wrong here. You want government (congress) to regulate the economy? and you want to use taxes to control inflation or hyperinflation that is likely when progressive democrats start printing money like it was toilet paper. And you'll achieve full employment by issuing a job guarantee. And one of the benefits of the jobs guarantee is that it helps keep wages low.
I keep coming back to the taxes. When inflation occurs due to scarcity, you control that by raising taxes. Mitchell, Wray and Watts (The MMT economists who wrote the book on MMT) admit that taxes are not necessary to fund the government because government controls the currency and will just create whatever money they need but taxes will still be necessary to control inflation. That's terrifying.
Just trying to envision a future where this economy is in practice and it's a nightmarish exercise. It is an outright attack on individualism. It wallows in collectivism. It attacks profits and price increases as being for greedy corporations wallets and demands regulatory control to curtail this in the name of fighting inflation. We've been having a discussion about fascist economies..... this fits right in.
