Why do people assume we always have to give more and more money to the government? What have they done with the $6 trillion they spend every year so far? What evidence is there that giving them more will improve anything?
Taxes are not for you to punish people you don't like. They're to fund the government enough to perform its necessary functions. That's all.
Governments can fund themselves in numerous ways, not just taxes. Either way you'll pay.
The key issue is do we want a federal government expenditure of 20-25% of the economy? I'd say no.
Should government spend 25% percent of GDP? Who cares. Governments shouldn’t aim for a specific number, they should spend enough to make sure full employment is achieved, according to saving desires and the private market’s appetite for investment.
Whatever the private market isn’t willing to invest, the government should take care of.
Whether that’s 10% or 50% is literally irrelevant.
We should be demanding ruthless efficiency from the government, not dreaming up new ways for them to take our stuff.
Cool, then let's just do away with them altogether. This is great news. All those people saying I needed to pay taxes so I can have roads and schools and a military and everything must be wrong.
Like, just as a basic common sense test, if it were possible for the government to spend as much as it wants without taxes, why wouldn't a politician implement that, eliminate taxes, and immediately become the most popular politician in the history of the world? If it were as easy as you say, surely that would have happened. Since it hasn't happened, it stands to reason that maybe you don't know what you're talking about when you say the government doesn't need taxes to fund spending.
Assume you have a new country with no money. How does anything get done? The central bank needs to issue capital that the government then allocates first.
Eventually this money makes it down to the citizens of the country who spend it. Then the government can tax that money, and that gives it non-inflationary spending room to reallocate those resources.
For example, there’s a car company that’s using up most of the country’s steel supply. But the government wants to shift the country’s manufacturing from cars to other green industries. What the government can do is tax the car company so that it’s not able to use up as much steel, which frees up resources for other industries to utilize.
The same goes for people, since people are a country’s most important resource. Through taxation the government can influence the resource allocation of the country. That doesn’t mean that the government can’t spend without taxes though.
If you want to learn more there’s plenty of resources out there, you can start with Keynes, skip anything from chicago, move on to MMT for the latest theoretical thought.
Which has implications --- beyond political/policy --- for MMT, in that MMT is (if I understand this bit) built in part on the premise that increased government spending won't increase expectations of future inflation (which needs to be the case in order to use control of the money supply to cover debt service).
Mostly though I'd just make two dumb arguments:
* Economists do not seem to like MMT ("not even a theory; what does it predict?")
* MMT was for a time part of the branding behind Biden's proposed and actual spending, which did not go well politically.
I hope I'm wrong in some lurid fun way you're going to spell out for me. :)
But my main contention is that we had a ton of loose monetary policy for nearly 2 decades with no major inflationary issues.
Then we had a short supply chain shock and a minor catch up in real income and boom inflation. That’s fairly compelling to me.
It’s definitely not mainstream though, I agree with you there, but I would argue that that’s because there’s a lot of people who would have to admit they were wrong for decades if MMT was accepted.