[PaulDavisThe1st]

The heterodox ideas do, yes.

MMT does not.

We don't know who is correct. We do know that one POV is massively favored by those who would like to use the national debt as a reason to impose austerity policies on the US economy.

[mindslight]

What you're calling "heterodox" is obviously wrong, as there has been massive monetary expansion over the past several decades with relatively tame price inflation. The main thing MMT changes is allowing the legislative government to spend the newly-created money for deliberate goals, rather than it just being handed over to the financial industry. Given the massive price inflation we have experienced in housing, education, vehicles, etc - everywhere the new money has been able to go from the financial industry to consumers (to bring up average price inflation as per the overt policy) - I'd say that spreading the new money around more is a no-brainer.

Experimenting with a different approach might be understandable if the austerity wasn't aimed directly at killing the global goodwill that makes such monetary inflation possible - USD's status as the world reserve currency. As it stands, I don't know things would look any different if our country was being controlled by a hostile foreign power intent on destroying us.

[drivebyhooting]

You use the word heterodox as a thought preventing insult.

On the one hand we have a simple model that 1+1=2. On the other we have someone else proclaimed correct saying it’s not so. But it’s too complex for me to understand.

[PaulDavisThe1st]

> But it’s too complex for me to understand.

I'm not here to solve your problems.

The fact that you think that all economies can be reduced to something as simple as "1 + 1 = 2" is one of your problems. Good luck.

[drivebyhooting]

Arrogance won’t solve any problems nor convince those who disagree with you.

You could start by stating your assumptions and basic axioms. Rather than asserting your conclusions and name calling things heterodox.

[PaulDavisThe1st]

heterodox is a common term in the economics world. imagine it says "mainstream" if you prefer.

> You could start by stating your assumptions and basic axioms.

I'm not here to write a text book on economics. I'm here to point out that "debt is bad, we can never carry on like this" is a belief, not a statement of fact.

[AnimalMuppet]

"Orthodox" is the word you're looking for. "Heterodox" means not mainstream. MMT is heterodox.

[PaulDavisThe1st]

Ah, thanks for a vitally important contribution to the thread. Error noted, and maybe I will remember it next time!

[absolutelastone]

How about "commonsense" instead?

Everything in macroeconomics is a belief, because it is clearly far from a hard science.

Common sense always applies to some degree when it is based on logic. Also my belief is that a system where there is no limits on government spending and debt seems obviously unstable and likely to become infinitely corrupt.

[PaulDavisThe1st]

Common sense is a very poor guide to many aspects of the world. It's not true of physics, or biology, or astrophysics, and even areas of math are very, very far from common sense. Human cognitive biases make "common sense" as both a predictor how people will behave and as a basis for understanding the world a remarkably poor choice.

And yes, economics is far from a hard science and most macro is driven by some combination of personal experience and political ideology. But that doesn't mean that "non-common-sense" ideas about macro are wrong, anymore than it means that extrapolating from the "common sense" of personal experience (i.e. no limits on your own spending and debt will lead to bankruptcy) is right.