One GOP proposal takes aim squarely at parents raising children on their own by eliminating the “head of household” filing status to reap some $200B more in taxes over a decade from single parents and other adults caring for dependents on their own.
One GOP proposal takes aim squarely at parents raising children on their own by eliminating the “head of household” filing status to reap some $200B more in taxes over a decade from single parents and other adults caring for dependents on their own.
Yeah, MMT is not a prescription for how to behave going forward. It’s just an account of how money has worked so far. We’re seeing international robber barons take shape, and I don’t think there are good historical examples of how that ends up functioning and what our options are for handling it.
I’d argue that MMT not having an answer for relating the “real economy” to a specific monetary policy is actually a good thing, because it keeps it descriptive instead of prescriptive, but you’re right – the obvious next step is “Okay, so, if balancing the budget is not a good metric, then what is?”
Stephanie Kelton’s answer is to look at the state of the real economy and make decisions that way. It’s… a very tall order. There are massive organizations dedicated solely to getting a clear picture of the real economy of a single sector.
You might spot 10 functions that appear under-utilized, so you fund those and expect to see a return, but they’re really constrained by one small thing, and once you fund that thing then those 10 functions roar to life and get into a bidding war and wreck pricing for that little pocket of the economy.
But it’s worth noting that these problems exist right now, we just aren’t paying attention to them because we spend more time trying to chase the dragon of austerity instead of taking a single minute to talk about utilization.
Balancing the budget is a good metric when its rooted in material needs.
When individual sectors are carved up into privately administered and obscured subcomponents, its difficult, true. But when you’ve got a large vertically integrated conglomerate, it is comparatively easy. Walmart, Amazon, and Exxon all managed to organize administration of an end-to-end supply chain where they can claim profit at every step of the economic process.
We’ve seen more transparent and well-integrated economies apply these tools holistically. Allende’s Chile implemented Project Cybersyn with enough early success that the incoming Pinochet government decided to obliterate the system rather than admit it’s effectiveness. Deng’s China and Sankara’s Burkino Faso and Castro’s Cuba all managed to integrate their domestic economies in a central model that boosted productivity and dramatically reduced poverty.
The idea of austerity is always rooted in the theory of private investment as a galvanizing force for growth. But even when your country is relatively small, the investment you can engineer through public sector collaboration regularly outpaces the growth you can obtain from an injection of overseas capital. When your country is large and diverse, public sector programs that integrate regions - most notably the shipping lanes and rail networks and canal projects and data pipelines drastically reduced cost of transit during the last 300 years - promise enormous returns for relatively small investments.
Gotta give credit to modern logistics where it is due. Any austerity program that eats away at our ability to cheaply and easily transfer materials and labor will cost more than it yields in the long run.