Blog-Reference and Blog-Reference on Feb 21
The essential point about deficit-spending/public-debt is this: the axiomatically correct macroeconomic Profit Law is given as Q≡Yd+(I−S)+(G−T)+(X−M) which reduces to Q=G−T for Yd, I, S, X, M=0. The simplified equation says that the profit of the business sector Q is equal to the deficit G−T of the public sector. It holds Public Deficit = Private Profit.
So, from the standpoint of simple self-interest, the one-percenters and their useful academic/journalistic spokespersons should consistently argue FOR deficit spending#1 and the ninety-nine-percenters and their academic/journalistic spokespersons should consistently argue AGAINST it. Curiously, just the OPPOSITE happens. So, either economists are stupid and do not know how the economy works or they are complicit in communicative fraud.
The main argument against the MMT championship of deficit spending ― inflation ― is beside the point because it rests on a false inflation theory.#2
The correct argument against deficit spending is that it is NOT in the interest of the ninety-nine-percenters and that it produces the distribution of income/wealth that everybody considers now as a real danger for society/democracy.#3
The fact of the matter is that ― because of Public Deficit = Private Profit ― the one-percenters have achieved their goal hands down by simply letting scientifically incompetent spokespersons of the ninety-nine-percenters like Paul Krugman or Stephanie Kelton brilliantly perform their roles as useful idiots by busily convincing people of Warren Mosler’s joyful message Public-Deficits-Are-Good-For-You.
#1 Keynes, Lerner, MMT, Trump and exploding profit
#2 MMT was right all along: Gov-Deficits do NOT cause inflation
#3 MMT is ALWAYS a bad deal for the 99-percenters
MMT policy guidance has no sound scientific foundations.
Bill Mitchell, for example, argues “A rising fiscal deficit is neither good nor bad. It all depends on the saving and spending desires of the non-government sector and the state of capacity utilisation. A rising deficit associated with a growing economy and full employment with stable prices is to be desired.”#1
The MMT mistake/error/fraud lies in the word “non-government sector”. There is NO such thing as the “non-government sector”, there are TWO sectors, the business and the household sector. And the business sector does NOT save. Saving/dissaving is the balance of the household sector, profit/loss is the balance of the business sector. The word profit, though, does not appear once in Bill Mitchell’s analysis. Why? Because it holds Public Deficit = Private Profit which means that Bill Mitchell does not really care about poor Britain but about the wellness of the one-percenters.#2
#1 billy blog Oh poor Britain …
#2 For the full-spectrum refutation of MMT see cross-references MMT