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by VirusNewbie 622 days ago
Disagreement? Literally nowhere in either of your comments did anyone actually explain how government spending is deflationary.

There is nothing to disagree with, no claims were made!

2 comments

Government spending being deflationary is not a claim MMT makes.

> and putting it towards (wasteful) government programs to "burn it" in a sense.

This claim isn't congruent with the idea of MMT.

One way to look at MMT is asking, does our government have to operate like it has a checking account, or can our economy act like an MMORPG economy?

For example, Blizzard has no obligation to collect coin before distributing coin. Blizzard thinks in terms of coin sources and coin sinks and adjusts source and sink policy in response to aggregate demand and player engagement goals.

The comment was a response to burning money. What does that have to do with deflation?
Are you seriously asking what reducing the money supply has to do with deflation?
Friedman was a charlatan and monetarism was trivially debunked when he came up with it. The 60 years since have not been any more kind to it. Don't confuse stocks with flows. The whole idea of money supply as a useful metric needs to be put to bed; one would have thought the 13 years post GFC would have made that apparent.

(Of course, the Austrians have a peculiar notion that inflation can by definition only be considered as such if it's associated with increased money supply. Another reason to ignore them completely)

Huh. So if I understand correctly, if we halved the money supply tomorrow, the price of everything would stay the same?
How would you halve the money supply?
it's a thought exercise. I'm asking if you think that would the consequences be?