Without establishing the underlying causes of boom-bust cycles, employing policies in response to changes in economic indicators to counter economic cycles is likely to destabilize the economy.
MMT is a pseudoreligious conviction that anything is possible and that the one and only solution is always Glorious Government.
The Fed’s apparent plan to somehow get to full employment and then deal with inflation sounds nice, but reality could easily derail the plan. Meanwhile, job growth is low and prices are rising.
Just because the demand for money changes over time doesn't mean we need a money supply that changes over time also.
There won't be a taper tantrum if the Fed seriously moves toward tapering. Investors now understand how the game works. Tapering doesn't actually mean the end of monetary inflation, and everyone knows it.
In 1971, Nixon used a fiscal crisis to justify severing the dollar's last connection to gold. It was the same old story: "we must vastly expand government power because of a 'crisis.'" The government never gives up these new powers.
Bob gives a brief history of money in the United States, explaining that the dollar was much “harder” in, say, 1810 than it was in 1910.
The collapse of the monetary order in 1971 reflected the massive dislocations and malinvestment of resources that ultimately turned the decade into one crisis after another. Keynesians are doing something similar today.
How, and to what extent, would fiduciary media emerge in a pure market economy? Hansen argues that holding fiduciary media instead of money is an entrepreneurial error.
Even at a "mere" two-percent level, cumulative price increases over time are nothing to scoff at. Even worse, if we look at what people really spend money on, price inflation doesn't much reflect the conclusions of "official" stats.
