August 29, 2018

Why the British Labour Party should NOT adopt MMT

Comment on Bill Mitchell on ‘The conservative polity is fracturing ― an opportunity for the Left’

Blog-Reference and Blog-Reference and Blog-Reference

Bill Mitchell shows the way: “The progressive social policies that are core to social democratic parties has to be married with an economics that allows those policies to be advanced.” And this economics is MMT, according to Bill Mitchell, Stephanie Kelton, and many academic economists around the world.

There is NOTHING to say against the social policies MMT propagates except that they are a bluff package. The Job Guarantee, in particular, has to be seen as a political door-opener and friend-of-the-people signaling.

MMT policy guidance ultimately boils down to deficit-spending/money-creation. It is a macroeconomic fact, though, that Public Deficit = Private Profit, so in simple terms, MMT is effectively money-making for the one-percenters. The social rhetoric of MMT is NOT in accordance with what economically happens in the real world.

There is NO way that any genuine/intelligent social democratic party ever adopts MMT:

• MMT is scientifically worthless because it is based on inconsistent macroeconomic accounting identities.#1

• MMT policy guidance ultimately benefits only the one-percenters.

• Deficit-spending/money-creation means stealth taxation for the ninety-nine percenters.

• Interest on public debt amounts to an income redistribution from the ninety-nine-percenters to the one-percenters.

• Public debt is NOT savings of the private sector as MMTers claim but deferred taxation which is simply shifted beyond the time horizon but eventually hits the ninety-nine-percenters.

• MMT policy is in any dimension a bad deal for the ninety-nine-percenters.

• The MMT policy of ever-increasing public debt amounts to the permanent self-financing of the oligarchy.

• MMTers are NOT the friends-of-the-people but the useful idiots of Wall Street/City of London.

Egmont Kakarot-Handtke

#1 For the full-spectrum refutation of MMT see cross-references MMT

REPLY to Barkley Rosser on Aug 30

You say: “Anyway, please keep your comments at least somewhere in the vicinity of the topic of the original post or subsequent discussion, not remotely the casee here.”

The title of this blog is EconoSpeak.
The title of my post is: Why the British Labour Party should NOT adopt MMT.
The title of your post is: Are We Alone In The Galaxy?

YOU are the wrong guy at the wrong place with the wrong topic.

By the way, I nowhere said that public debt equals private profit. I always say that Public Deficit = Private Profit according to the macroeconomic Profit Law. Profit is the difference between flows, debt is a stock. Mathematically, a real or nominal economic stock is the discrete numerical integral of flow differences.#1

You cannot even read. And you actually know nothing about the relationship between profit and debt. Obviously, you have never encountered intelligent life in your social galaxy.

#1 Primary and Secondary Markets