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The latest Donald J. Trump Tweet proclaims: “I am pleased to announce the House has passed our budget deal 284-149.”#1
Economically, Mr. Trump continues the long tradition of deficit-spending/money-creation.#2 Deficit-spending is said to be good for everything from employment, growth, education, war, health-care, to saving humanity and the planet.
The economic fact of the matter is that deficit-spending/money-creation is, and has always been, bad for WeThePeople and good for the Oligarchy.#3, #4
Since Adam Smith, the task of economists is to deliver some scientifically looking justification for already decided upon policies. Last time it was Friedrich Hayek who acted as a useful academic idiot for Prime Minister Thatcher/President Reagan, this time it is the MMTers Kelton/Mosler/Mitchell/etc.
Modern Monetary Theory is refuted on all counts.#5 Politically, this does not matter much because in the political realm it is not the scientific truth-value that counts but the political use-value.#6
The macroeconomic Profit Law, i.e. Q≡Qm+Qn with Qm≡Yd+(I−Sm)+(G−T)+(X−M) entails Public Deficit = Private Profit which means that the central MMT policy recommendation of deficit-spending/money-creation benefits the Oligarchy and ultimately not WeThePeople. In other words, MMTers attempt to convince people of policies that are not in their interest. Inside the political sphere, this counts as smart, outside the political sphere this counts as deception/fraud/corruption.
Permanently growing debt is an indicator that the system is broken. The economic fact of the matter is: so-called free-market economies like the USA have long been on the full life support of the state. The continuous creation of financial wealth has become the first and foremost economic task of the state. The Oligarchy is continuously fed by deficit-spending/money-creation. Roughly speaking, the Oligarchy’s financial wealth is equal to accumulated Public Debt (with WeThePeople as ultimate bag holders).#7
The very characteristic of late Capitalism is that the so-called free-market economy is on the full life support of the state. Profit is produced by the government through deficit-spending/money-creation. The Oligarchy, in turn, uses the opulent free lunches to corrupt what remains of the state’s legislative, executive, and judiciary institutions.
What President Trump and the House, with the propaganda support of MMT, have actually achieved is that the system survives economically at least until the next election in 2020.
#1 Twitter Jul 26
#2 Keynes, Lerner, MMT, Trump, etc. and exploding profit
#3 Is MMT good for WeThePeople or for the Oligarchy?
#4 MMTers are false Progressives and false Friends-of-the-People
#5 For the full-spectrum refutation of MMT see cross-references MMT
#6 MMT’s true program
#7 The decisive reason to worry about government debt
Related 'MMT = Trumponomics'