Long Article on Modern Monetary Theory and Universal Basic Income (free market, status)

[EDS_]

Originally Posted by mshultz

This is why Milton Friedman came to support a Universal Basic Income that was significantly below minimum wage (so as not to discourage getting a job). The overhead would be much less, especially since many of these welfare programs end up benefiting the middle class rather than the poor. Needs beyond the Universal Basic Income would be supported by private charity, rather than the government.

I agree about the health insurance too. Given the choice, I would buy $5000 annual deductible health insurance. My 2003 trip to the ICU cost about $12,000 gross, $10,000 net. I paid $530 out of pocket. The extra $30 was because I requested my medical records. By that point in my life, I could easily have written a check for the full amount. And what's with every person and every insurance company paying a different amount for the same procedure? When you and I visit Wal*Mart, we both pay the same prices.

Friedman supported a negative income tax not a UBI.

I'm working from memory so give a little leeway..........MF's NIT goals.

A. Help some people out of desperate poverty
B. Work the percentages such that there would be no "welfare trap"......those receiving NIT proceeds would never be better off than those paying.
C. Simplifying the welfare benefits game such that A) it's easy to see who is receiving what benefits B). reduce overhead etc. etc.


NIT and UBI are very different things. I've read Friedman extensively and don't recall him advocating UBI. He did refer to his NIT as guaranteed income at times which is where the UBI/NIT conflation comes from.

[ddeemo]

Originally Posted by FrankMiller

1. If you're going to assume axiomatically that policymakers act poorly then it hardly matters what system or theory you impose, does it? In any case, boosting aggregate demand as per MMT will result in better jobs and fewer losses than current theory, inflation or otherwise.

It actually does matter - if you try to use MMT, everything will fall apart - MMT is not real theory espoused by real economists - it is a wish of liberals, in particular AOC and green new deal advocates. Here is a report from Cato Institute;

MMT attempts to repackage and resurrect the empirically and theoretically discredited Keynesian policies of the 1960s and 70s. A 2019 survey of leading economists showed a unanimous rejection of MMT’s assertions that (1) “Countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt,” and (2) “Countries that borrow in their own currency can finance as much real government spending as they want by creating money” (Chicago Booth 2019). MMT is an effort to justify more government spending on programs favored by AOC and her friends with claims of fiscal space that can be liberated by printing money. Its arguments do not add up (Palley 2019). Both the excitement and motivation for MMT seem to reflect the desire to promote a political agenda, without the hard analysis of its pros and cons — its costs and benefits.

So MMT clearly has no real support of economists - it is only a wish, not a real economic theory.

Originally Posted by FrankMiller

2. Our Capitalist States of America aren't brutal? Our let-them-eat-cake, million-preventable-COVID-deaths, corporations-and-cars-are-more-important-than-people, literally-still-legal-slavery America? Cuba has a more humane health care system than the US despite decades of violent US embargo of Cuban medical supplies.

So the rapid development of vaccines, the economic incentive payments and paying people to not work are examples of "brutal" capitalists policies - what a hypocrite to blame a system without proof or explaining why.

Originally Posted by FrankMiller

3. They're wrong because they're Marxist? Well you're wrong because you're capitalist, how do you like that argument. Judo chop!

Sorry, Marxist systems are not sustainable - they are wrong because the theories they espouse are wrong - from Brookings.edu;

The experience with all economies that have swallowed the particular free lunch proposed by MMT enthusiasts is that it is very costly, and it can take a long time before unsustainable pressures eventually cause a disastrous outcome. The evidence on approaches like those proposed by advocates of MMT is that it always results in hyperinflation, massive social and economic destruction, and a crisis, followed by the imposition of more conventional economic policies. All existing experience– Venezuela today; Zimbabwe in 2008; Yugoslavia in 1994; Hungary in 1946; Greece in 1944; Wiemar Germany in 1923 — demonstrates the large costs.

Examples abound in which printing money to solve a fiscal debt problem hasn’t worked. There are no examples that I am aware of in which MMT has worked. It is a theory with no practical relevance.

Also there is one LARGE difference between MMT and Marxist economics that is conveniently ignored - under Marx, the state controls production and therefore money relative value for labor, under MMT, the capitalist economy controls production and therefore the money relative value for labor - attempts to increase value of labor will cause inflation. Even the website marxist.ca does not support MMT or UBI.

Originally Posted by FrankMiller

Well put. Replace our entire government administrative apparatus with an old lady running a computer that calculates a 70% wealth tax and FedEx's checks to workers, is that government "bigger" or "smaller" than our paternalistic liberal nanny-state?

UBI is nothing but a welfare payment, it has been tried several times with very poor results - essentially it will allow many to not work - it is another bad idea that will cause decreased work participation. I suppose your "wealth tax" of 70% applies to only those above you - also a 70% tax on federal when added to state, local, property and sales tax means that total tax could be over 100%.

Bottom line - MMT and UBI are not "fixes", they are bad ideas not supported by real world results.

[FrankMiller]

Originally Posted by EDS_

Friedman supported a negative income tax not a UBI.

I'm working from memory so give a little leeway..........MF's NIT goals.

A. Help some people out of desperate poverty
B. Work the percentages such that there would be no "welfare trap"......those receiving NIT proceeds would never be better off than those paying.
C. Simplifying the welfare benefits game such that A) it's easy to see who is receiving what benefits B). reduce overhead etc. etc.


NIT and UBI are very different things. I've read Friedman extensively and don't recall him advocating UBI. He did refer to his NIT as guaranteed income at times which is where the UBI/NIT conflation comes from.

NIT and UBI are different, but not really different. Basically UBI requires has higher tax rates which effectively offsets some of the UBI payment and gives a net result similar to NIT. You could have a UBI policy where you directly tax a portion of the UBI and it's literally exactly the same net impact as a NIT. Another way to put it: NIT is simpler for a cash-flow perspective (less paying out just to tax it back) but more complicated to understand (you have to calculate what your payment is going to be).

Originally Posted by ddeemo

It actually does matter - if you try to use MMT, everything will fall apart - MMT is not real theory espoused by real economists - it is a wish of liberals, in particular AOC and green new deal advocates. Here is a report from Cato Institute;



So MMT clearly has no real support of economists - it is only a wish, not a real economic theory.



So the rapid development of vaccines, the economic incentive payments and paying people to not work are examples of "brutal" capitalists policies - what a hypocrite to blame a system without proof or explaining why.



Sorry, Marxist systems are not sustainable - they are wrong because the theories they espouse are wrong - from Brookings.edu;



Also there is one LARGE difference between MMT and Marxist economics that is conveniently ignored - under Marx, the state controls production and therefore money relative value for labor, under MMT, the capitalist economy controls production and therefore the money relative value for labor - attempts to increase value of labor will cause inflation. Even the website marxist.ca does not support MMT or UBI.



UBI is nothing but a welfare payment, it has been tried several times with very poor results - essentially it will allow many to not work - it is another bad idea that will cause decreased work participation. I suppose your "wealth tax" of 70% applies to only those above you - also a 70% tax on federal when added to state, local, property and sales tax means that total tax could be over 100%.

Bottom line - MMT and UBI are not "fixes", they are bad ideas not supported by real world results.

You're complaining that MMT isn't supported by real economists, and your retort is to quote the Cato Institute? Then you quote Brookings to assert that MMT is to blame for the Weimar inflation? The war and reparations didn't have anything to do with it?


Someone else said it but regarding US slavery, it's legal in all states, just read the Constitution (specifically the 13th amendment) which explicitly legalizes slavery.


And China has more vaccinated population, including children as young as 3, and negligible deaths compared to about a million in the US. And most of China stopped wearing masks months ago because they don't need them anymore.


You're right that MMT isn't Marxist (that was always right-wing hyperbole), but note that Marxism doesn't necessitate state control of production, only worker control. State control is a Leninist/Stalinist/Maoist innovation. It's important to understand that Marx was primarily thinking about a capitalist industrial state (like Europe or the US), while Lenin/Stalin and Mao were adapting Marxism to agrarian nations with a need to rapidly industrialize and defend against capitalist counter-revolutionary incursion. Marx himself was, to my understanding, more about worker cooperatives than about nationalized industry; he was concerned with the workers themselves having more power over production and power over their own lives. In other words, Marx would prefer a widget industry dominated by worker co-ops over nationalizing the widget industry.

[mshultz]

Originally Posted by EDS_

Friedman supported a negative income tax not a UBI.

I'm working from memory so give a little leeway..........MF's NIT goals.

A. Help some people out of desperate poverty
B. Work the percentages such that there would be no "welfare trap"......those receiving NIT proceeds would never be better off than those paying.
C. Simplifying the welfare benefits game such that A) it's easy to see who is receiving what benefits B). reduce overhead etc. etc.


NIT and UBI are very different things. I've read Friedman extensively and don't recall him advocating UBI. He did refer to his NIT as guaranteed income at times which is where the UBI/NIT conflation comes from.

I'm working from memory too, but negative income tax sounds right. My Milton Friedman books are packed away in one or more of my many boxes of books. I need to add a library onto my house.

[Sunbiz1]

Originally Posted by Elliott_CA

With UBI they will no longer be chained down to 40 hr/week dead end jobs.

Someone has to, or your grocery shelves will become even more barren.
I'm amazed how many are so willing to buy into paying people to produce absolutely nothing.

[ddeemo]

Originally Posted by FrankMiller

You're complaining that MMT isn't supported by real economists, and your retort is to quote the Cato Institute? Then you quote Brookings to assert that MMT is to blame for the Weimar inflation? The war and reparations didn't have anything to do with it?

You missed the main point - MMT is hokum and is not supported by any economists -I suppose you would rather I just make up stuff to make my point rather than use quotes from experts, easier to dismiss. Brookings and CATO Institute are both very respected economic think tanks - the examples are about what happens when you do runaway spending which is the premise of MMT.

Wiemar inflation started well before wars end and were only made worse after the war. They were counting on winning the war and getting reparations from the countries defeated to pay for the war, when they lost, that fell apart and inflation was rampant before reparations started to be paid. Also since when did Venezuela pay war reparations? You want to dismiss the many other examples when excess spending caused runaway inflation by incorrectly dismissing one of them. Show one respectable economic institute that supports excess spending and MMT.

Originally Posted by FrankMiller

Someone else said it but regarding US slavery, it's legal in all states, just read the Constitution (specifically the 13th amendment) which explicitly legalizes slavery.

I was responding to your comment that said "Our Capitalist States of America aren't brutal? Our let-them-eat-cake, million-preventable-COVID-deaths, corporations-and-cars-are-more-important-than-people, literally-still-legal-slavery America?"

I was responding with the many ways that the US worked to prevent deaths such as vaccine and supported people during the pandemic through added benefits - I assumed your comment about slaves was hyperbole about workers being slaves to corporations - I didn't realize you meant actual slavery.

Are you kidding, you really need to read what you reference - the 13th amendment explicitly banned slavery - text;

Amendment XIII
Section 1
Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Section 2
Congress shall have power to enforce this article by appropriate legislation.

BTW - slavery was NEVER legal in all states - most states were considered free states and many never had legal slavery before the civil war - that was part of the reason for the underground "railroad", to get slaves to free states - might want to review your history.

Originally Posted by FrankMiller

And China has more vaccinated population, including children as young as 3, and negligible deaths compared to about a million in the US. And most of China stopped wearing masks months ago because they don't need them anymore.

None of the comments were about China but China does not report actual data - it is laughingly inaccurate - a country of 1.4 Billion has reported 96K cases and 4636 deaths. The almost fully vaccinated country of Israel with a population of 9 M (0.6% of China's pop) has 1.25M cases and 7611 reported deaths, over 13 X more cases and 60% more deaths. Somehow China has had many times fewer infections and deaths as % than any other country in the world except the few that don't have data to report - not realistic data.

In Wuhan on April 17th 2020, they reported over 1000 deaths, about 25% of total deaths in the country that have been reported over the almost 2 years of the pandemic, but none since - really? Since April 2020, about 18 months ago, they stopped reporting cases and deaths anywhere in the country, so BEFORE any vaccines were available, they reported essentially zero deaths for many months - why vaccinate if zero deaths. Also there are reports of people getting many shots because they get paid to get vaccinated. Their official stats have always been suspect in China.

Originally Posted by FrankMiller

You're right that MMT isn't Marxist (that was always right-wing hyperbole), but note that Marxism doesn't necessitate state control of production, only worker control. State control is a Leninist/Stalinist/Maoist innovation. It's important to understand that Marx was primarily thinking about a capitalist industrial state (like Europe or the US), while Lenin/Stalin and Mao were adapting Marxism to agrarian nations with a need to rapidly industrialize and defend against capitalist counter-revolutionary incursion. Marx himself was, to my understanding, more about worker cooperatives than about nationalized industry; he was concerned with the workers themselves having more power over production and power over their own lives. In other words, Marx would prefer a widget industry dominated by worker co-ops over nationalizing the widget industry.

Doesn't really matter - the idea of MMT is bogus and Marxism has worked literally nowhere.

BTW - there is a couple of big differences between negative income tax (NIT) and universal basic income (UBI) - NIT is not universal and encourages work more than UBI - NIT has worked, UBI has not. Earned income credits are already essentially a hidden NIT and studies show that it seems to reduce poverty.

[Elliott_CA]

Originally Posted by ddeemo

...MMT is not real theory espoused by real economists... So MMT clearly has no real support of economists - it is only a wish, not a real economic theory.

New ideas never have academic support immediately out of the gate. Einstein's special theory of relativity was not initially accepted when he published it in 1905 -- it was dismissed as "absurd." It wasn't until 1919 when, during a solar eclipse, that starlight could be seen being bent as it passed by the Sun, just as his equations predicted; that's when scientists began to fall in line behind Einstein.

Will MMT ever gain traction in academia? I don't know, but it could.

[Hoonose]

Originally Posted by Sunbiz1

Someone has to, or your grocery shelves will become even more barren.
I'm amazed how many are so willing to buy into paying people to produce absolutely nothing.

Much of this is dependent on productivity, overall and specific. If technologies can boost productivity enough, then fewer workers will be needed. That technology will be a source for other/new workers, but there are bound to be more regional and local mismatches.
With most business consumers have value.

[Hoonose]

Originally Posted by Elliott_CA

New ideas never have academic support immediately out of the gate. Einstein's special theory of relativity was not initially accepted when he published it in 1905 -- it was dismissed as "absurd." It wasn't until 1919 when, during a solar eclipse, that starlight could be seen being bent as it passed by the Sun, just as his equations predicted; that's when scientists began to fall in line behind Einstein.

Will MMT ever gain traction in academia? I don't know, but it could.

Minimal traction in the time I've been studying it, more than 10 years. The Aussie Mitchell, and those around the Kansas City School. Yet at the Federal level the massive money keeps coming, and the greatest economic disruption since WW2 is being taken care of.

[redguard57]

Originally Posted by Elliott_CA

New ideas never have academic support immediately out of the gate. Einstein's special theory of relativity was not initially accepted when he published it in 1905 -- it was dismissed as "absurd." It wasn't until 1919 when, during a solar eclipse, that starlight could be seen being bent as it passed by the Sun, just as his equations predicted; that's when scientists began to fall in line behind Einstein.

Will MMT ever gain traction in academia? I don't know, but it could.

It's not a precise theory. When I've read about MMT it seems there is not consensus on its definition.

But I think there is a growing movement among academic economists joining the "deficits don't matter" camp. Or at least, "they don't matter as much as we used to think" which is influenced by MMT.