[Marxism] Behind the Money Curtain: A Left Take on Taxes, Spending and Modern Monetary Theory - CounterPunch.org
marxmail00 at gmail.com
Fri Feb 14 08:16:58 MST 2020
> On Feb 14, 2020, at 9:26 AM, Daniel Lindvall <daniel.lindvall at filmint.nu> wrote:
> It sometimes feels as if people here are determined to make the worst possible interpretations of comments. It was a straight question, asked precisely out of curiosity, not the lack of it. I’m not dismissing the general importance of understanding money, but the text left me wondering what difference it makes to someone in an electoral campaign if s/he has to argue that we need to raise taxes to avoid inflation rather than to pay for progressive policies as such?
Yeah, I don’t think that would be a very effective campaign strategy. If you’re a campaign advisor to anyone, I’d suggest not using that approach.
One of the things you learn when teaching university students is how to spot the guys — and they are always guys — who are committed to not learning things, or who expect to be spoon-fed insights, or who think they can trick you into doing their thinking for them. At least, I did. They lack even a modicum of healthy shame. And they get defensive when you point that out.
But I’ll indulge you one last time.
You’re asking what the difference is between a government whose spending is constrained in advance by its ability to raise funds from taxes, and a government that isn’t so constrained in advance, but may have to tax what it spends into the economy back out at some point.
Can you see now where this is headed?
When a government uses its spending power to build useful infrastructure, productive economic capacity and good social programs — which, gosh, sounds like something even a socialist government would want to do — then what you have at the end of that process is… wait for it… useful infrastructure, productive economic capacity and good social programs. You also have a bunch of liquidity circulating through the economy, which the government injected into it by hiring all of the people it hired to build and do all of those things.
Now, it might become necessary to tax some of that liquidity back out of the economy in order to prevent overheating. My guess is people are less likely to mind paying some taxes now that they’ve got useful infrastructure, productive capacity and good social programs. But there are other options. For instance, you could do what the US government did during WWII and issue savings bonds at a modest interest rate in order to tie up some of that liquidity for a few years until the productive capacity can catch up to the point where it can satisfy the extra demand. (And if anyone is under the impression that the purpose of those bonds was to raise funds to “pay for the war,” I would *urge* you, in the strongest possible terms, to read Sam Levey’s piece before responding and making an absolute ass of yourself.)
Obviously, this whole time you’re going to be working towards an industrial strategy to decarbonize the economy and prioritize for sustainable forms of economic activity, at least if you have any sense. But I digress.
Can you see how much difference it makes now? On one approach, you don’t end up with useful infrastructure, productive industrial capacity and good social programs. On the other approach, you do. I feel silly having to point out to someone on the left that we should be fighting to have them.
Honestly, there’s a lot of excellent material out there for anyone who’s even mildly curious. There’s also a lot of willful misrepresentation from mainstream economists (many of whom do understand it, and thus understand what a danger it poses to the continuation of the ruling hegemony) and witless misrepresentation from quite a few Marxists (who don’t understand it, and are committed to making sure they don’t start to — because that would require them to admit they’ve gotten some things badly wrong).
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