Comment by pfannkuchen

I’ve so far regarded MMT as Keynesian but “now with even more very-convenient-for-the-government conclusions!”, but honestly I haven’t read up on it in detail. I will check it out, thanks.

EDIT Wait, haven’t we just reversed the order? If you tax a person the same amount as the government printed, and someone ended up with the printed money, then for the purpose of this topic it’s equivalent to taxing first and just spending the money. So it has the same problem.

The only difference is that the taxation is decoupled from the printing, so the government doesn’t need any special permission from congress to spend. But from an asset ownership perspective the effect is the same, no?

Oh MMT is a new wrapper around the very basic old ideas. There is research on some pre-revolutionary US states that print their own money and raise the tax to be paid in the printed money at the same time. Inunderstand Dr Johnson commented on it.

Anyway. Yes I guess the order is reversed - print the money first, give it to people to get them to do whatever the government wants (build walls, roads etc), then find whomever the money has gone to and tax them.

I found this an interesting way of looking at money, when I Was thinking about the Oppenheimer movie

Take a hundred dollar bill, and think of that not as money, but as an instruction to the person you give it to, say a builder To do a job for you, maybe build a hut for a nuclear scientist to live in.

Now write on a plain piece of paper “We are your government, we are at war and we need a hut built. You are going to build it”

What’s the difference between the two pieces of paper?

Asset ownership is a legal system. My ownership of my house is a legal situation. My mortgage is a (tradeable) obligation between me and my bank manager

Other points: you cannot tax first - imagine a starting situation. No dollar bills have been printed so how do you get tax paid in dollars?

And the government prints more than it taxes so there is “liquidity” - there has to be be extra dollar bills floating around so we can pay hairdressers etc (I mean you could in theory tax the lot but that would mean perfect understanding of the velocity of money through the economy - maybe with fiat crypto?)

But in the main asset ownership is decoupled from money - you own your house and car and stocks but you don’t own money - you owe the bank or the bank owes you but money is zero sum, even if wealth is not