You arguments so far have been “the number is too big” and “let’s get rid of all taxes” so I don’t feel like you’re very serious about having a discussion.
Look, if you actually knew what you were talking about you would be able to explain it in a few sentences. I'm guessing you're misremembering something you never really understood from the econ elective you took in college ten years ago and so all you can do is say "go read a book" because you don't really understand it beyond a vague notion that taxes are somehow unnecessary to fund the government.
Like, just as a basic common sense test, if it were possible for the government to spend as much as it wants without taxes, why wouldn't a politician implement that, eliminate taxes, and immediately become the most popular politician in the history of the world? If it were as easy as you say, surely that would have happened. Since it hasn't happened, it stands to reason that maybe you don't know what you're talking about when you say the government doesn't need taxes to fund spending.
Assume you have a new country with no money. How does anything get done? The central bank needs to issue capital that the government then allocates first.
Eventually this money makes it down to the citizens of the country who spend it. Then the government can tax that money, and that gives it non-inflationary spending room to reallocate those resources.
For example, there’s a car company that’s using up most of the country’s steel supply. But the government wants to shift the country’s manufacturing from cars to other green industries. What the government
can do is tax the car company so that it’s not able to use up as much steel, which frees up resources for other industries to utilize.
The same goes for people, since people are a country’s most important resource. Through taxation the government can influence the resource allocation of the country. That doesn’t mean that the government can’t spend without taxes though.
If you want to learn more there’s plenty of resources
out there, you can start with Keynes, skip anything from chicago, move on to MMT for the latest theoretical thought.
> Then the government can tax that money, and that gives it non-inflationary spending room to reallocate those resources.
Hmm, why might it be important to have a non-inflationary means of spending? I wonder. Of course, the government can print money. They can't just print all the money they want forever with no consequences.
> For example, there’s a car company that’s using up most of the country’s steel supply. But the government wants to shift the country’s manufacturing from cars to other green industries.
A car company is not "using up" the steel supply. They are meeting consumer demand for cars. If consumers found green technologies more useful than cars, they would buy that instead, then the green technology companies would be able to outbid the car companies for steel and they would buy it. If they aren't it's because people find cars more useful than whatever "green technologies" are.
Also, if there's a high demand for steel, new steel suppliers can enter the market and increase the supply of steel. There's no need for the government to manage this and it's generally harmful for them to do so, since they are allocating resources away from something people have demonstrated they find useful and towards something they don't find useful. This is not optimal. We should want the resources to go where they are most useful and valued, not where some bureaucrat decides he or she likes them to go.
I do not think "skipping to MMT" is the right plan for understanding mainstream economics, or any kind of economic theory likely to govern decisionmaking in the near future. I think some of the core ideas in MMT took a real bruising over the last couple years.
I’d love to hear which ones. I think economicists are going to be arguing this for 100 years but I, as an interested layman, see a lot of evidence _for_ MMT in recent years.
You know I'm not an economist, and I'm just going off of nerding out on AskEconomics and BadEconomics (and bookmarks from when this was a live issue a couple years ago). But mostly my argument would be built around how burnt the Biden administration was by the run-up in inflation (which I'm sure is a mix of supply chain and fiscal stuff). Conservative opponents of MMT predict hyperinflation, but I think we've learned that making a 12-pack of Diet Coke $1 more expensive is enough to trigger regime change; that's what we'll get instead of hyperinflation, but either of those outcomes breaks MMT as a policy tool.
Which has implications --- beyond political/policy --- for MMT, in that MMT is (if I understand this bit) built in part on the premise that increased government spending won't increase expectations of future inflation (which needs to be the case in order to use control of the money supply to cover debt service).
Mostly though I'd just make two dumb arguments:
* Economists do not seem to like MMT ("not even a theory; what does it predict?")
* MMT was for a time part of the branding behind Biden's proposed and actual spending, which did not go well politically.
I hope I'm wrong in some lurid fun way you're going to spell out for me. :)
I might be wrong, but my impression is that MMT has been pretty good at predicting economic outcomes.
The main reason I suggested it is because MMT is the only innovation happening in economics, and understanding the core concepts has been very helpful to me.
The only other game in town is synthesis, which has been a dead end for decades and has very poor real world predictive power.