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How We Think About the Deficit is Mostly Wrong - MMT oped in the NYT

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  • Strongly Liberal Democrat
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    Dallas, TX
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    jaredsxtn Wrote:
    Carlitos Wrote:
    jaredsxtn Wrote:

    Not surprisingly, I agree with most of what Schmidt points out.

    so you accept that govt can always spend without concern for financial solvency and the real limit is real resources? Welcome to the fold.

    No, I do not. I also don't see where Schmidt said anything close to that.

    I was more so saying that I agree with Schmidt when he says "it would seem to me that there are real practical limits on any progressive agenda that seeks to throw almost limitless money at every problem."

    Read what Schmidt posted.

    Carlitos Wrote:

    As Schmidt said, we have a massive doctor shortage and an ever aging population that is requiring more and more time from the dwindling number of doctors available. "Free healthcare for all" will inject steroids into that problem. Instituting pay caps on the limited number of doctors who spent hundreds of thousands of dollars to get their degree will also inject steroids into that problem.

    can’t solve the doctor shortage if govt imposes an artificial financial constraint on itself.

    Huh? The doctor shortage has nothing to do with artificial financial constraints. It has to do with people choosing to go into different fields while simultaneously having an aging population that will put more and more strain on the dwindling number of doctors available.

    Artificial financial constraints being magically lifted isn't going to make it so thousands of people who would otherwise go into marketing change their mind and decide to get their MD

    It's not just a 'personal preference' problem as you imply. Institutional incentives/disincentives play a role.

    My point is that we can't begin to address the doctor shortage or health insurance problems if the first concern is deficit-neutrality or 'how's it going to be paid for?'.

    Carlitos Wrote:

    I'm all for debt forgiveness for doctors in exchange for them agreeing to accept less money, but what are you going to do with the doctors who don't take the government up on that offer and start a private practice that is privately funded? The rich would then continue to get the best care in the world, the poor would continue to see sub optimal care, and the middle will go from receiving decent care to receiving sub optimal care.

    Promising "free healthcare for fall" is a great gimmick that sounds awesome, but peel back a few layers of the onion and anyone can see that it is far more complicated.

    The same goes with infrastructure spending. We can throw 20 trillion dollars at rebuilding our crumbling infrastructure, but what happens when we figure out that there's a finite number of people who know how to design and build bridges, dams, and other major projects?

    Does MMT take those things into account or does it believe that everything will fall into place if you simply rethink how government money is spent? And does MMT factor in inevitable price gauging and other nefarious acts that would undoubtedly arise if the Federal government simply started throwing trillions of dollars around willy-nilly?

    see the last bolded paragraph from the article quoted.

    I've read and reread not just the bold paragraph you selectively chose, but the entire article.

    MMT'ers would take into account what the real economy can produce. Notice how Schmidt said he was putting on his MMT 'hat' when he was questioning the real labor capacity of the nation to provide 'free healthcare' to all?

    What MMT doesn't take into account is the human side of things. Medicare for all would be awesom. Hell, I wrote my college thesis on it back in 2006, but MMT doesn't take into account the fact that there's a tremendous shortfall of qualified medical professionals in an ever aging population. It doesn't take into account the fact that 330 million people are used to a certain type of health coverage and dramatically changing that over night might cause a bit of a stir. And it doesn't take into account the fact that a significant number of the limited doctors we currently have will very likely just start their own private practice if they were forced to take a drastically reduced pay while simultaneously being forced to accept more patients.

    You are conflating Single Payer or Bernie Care with MMT

    The same goes with infrastructure. Insisting that everything will just fall into place and if it doesn't then our government can simply ship people over from other countries to do everything is magical thinking. The American people would go ape shit crazy if the government did something like that.

    Where did anyone insist that everything would fall into place? You have arranged an extreme scenario where all of our engineers and bridge builders are corrupt and colluding to keep prices high.

    That's all I'm trying to get across. MMT simply doesn't hold up once you start peeling away at it.

    You haven't raised any issue with MMT.

  • Strongly Liberal Democrat
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    Portland, OR
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    Carlitos Wrote: Read what Schmidt posted.

    I have. Multiple times.

    Carlitos Wrote: It's not just a 'personal preference' problem as you imply. Institutional incentives/disincentives play a role.

    My point is that we can't begin to address the doctor shortage or health insurance problems if the first concern is deficit-neutrality or 'how's it going to be paid for?'.

    You're talking about two entirely different things. The doctor shortage is not due to a shortage of intelligent individuals in this country who just can't afford to pay for medical school, but would strive to become doctors if only our monetary policy were to change. It's a hell of a lot more complicated than that.

    We can throw an unlimited about of money at healthcare without concern for the deficit or debt, but if we don't have enough qualified medical professionals to actually treat the 330 plus million people living in this country then it will all be for naught. If we don't invest the money to teach people, especially children, how to live healthy lives then it will all be for naught. If we don't feed our school children healthy lunches and get rid of the ludicrous tax subsidies that allow multinational food corporations to fill our grocery aisles with garbage that causes heart disease, obesity, diabetes, and countless other illnesses then it will all be for naught.

    That is what I mean when I say that MMT doesn't take the human side of things into account. Changing the way money, debt, and deficits are viewed is one thing, but it's only one slice of a very complicated pie.

    Carlitos Wrote: MMT'ers would take into account what the real economy can produce. Notice how Schmidt said he was putting on his MMT 'hat' when he was questioning the real labor capacity of the nation to provide 'free healthcare' to all?

    Yes, I did notice that. I also noticed when he immediately wrote "it would seem to me that there are real practical limits on any progressive agenda that seeks to throw almost limitless money at every problem" after he put his MMT hat on...

    He then went into a detailed rebuttal of MMT's philosophy by using real world examples.

    "But when you get down to the nitty gritty on how the money can be effectively spent to do the most good for society, the liberal progressives need to have a reality check. WE cannot offer free heath care for everyone AND free college education for everyone AND massive spending on infrastructure WHILE also cutting back on immigration...you know those people that come from abroad and take away your jobs." - Schmidt 10/6/2017

    Are we reading the same thing? Because what I'm reading is a point by point rebuttal of why MMT would never be able to work.

    Carlitos Wrote: You are conflating Single Payer or Bernie Care with MMT

    No, I am simply trying to show why I beleive MMT would never work in the real world.

    Carlitos Wrote: Where did anyone insist that everything would fall into place? You have arranged an extreme scenario where all of our engineers and bridge builders are corrupt and colluding to keep prices high.

    Again, I am simply trying to show why I believe MMT would never work in the real world.

    I'm not saying all engineers are corrupt. I'm using extreme examples because MMT is an extreme theory.

    Carlitos Wrote: You haven't raised any issue with MMT.

    I feel I have.

    What are MMT's ideas for how to handle the fallout when thousands of doctors flee to private practice when price constraints are instituted on healthcare costs?

    What are MMT's ideas for how to handle the looming crisis as more and more companies continue to shift towards a technology and machine based workforce that no longer rely on humans?

    The "productive assets of the economy" are, sadly, more and more likely to be robots. They don't take sick leave, lunch breaks, vacations, or have any emotional constraints that affect their duties. They can't get addicted to drugs or alcohol and they can't get in trouble for sexual harassment. They can't sue employers for workplace injuries and they won't ever get in an argument with a coworker.

    That's the world we're rapidly moving towards whether we want to accept it or not. I'm far more concerned about that than anything else. There's a very real possibility that we will be in an almost completely post-human work society in the next 100 years, which means that children who are already alive right now may see a post-human work society in their lifetime.

    How we handle that will determine whether human civilization can adapt or simply become a sideshow to the beast we created.

  • Strongly Liberal Democrat
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    What MMT says is that the govt can always spend to purchase goods and services for sale in the govt currency because it’s the monopolist and the sole manufacturer of US dollars. The limit is on the real side of the economy. If you disagree with that just say so. Thats MMT. That’s what Schmidt agrees with. There are many ways to use this knowledge and many opinions it can inform. His argument is that the real resources aren’t there to deploy for the progressive agenda. And they may not be, without other mass efficiencies, or importing labor, etc. Instead of being concerned with deficits or financing concerns, the CBO should be judging fiscal legislation on the basis of real resource constraints, not non-existent or artificial constraints.
  • Liberal Democrat
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    I guess I should be flattered that there is a debate to what I said and believe. What Carlitos says about my argument is true...that "real resources are not there to deploy for the progressive agenda". However, my arguments go beyond just resources. It's more about the way Americans have been conditioned to think. I have said that 99 percent of Americans think of the federal budget and deficit spending in the same fashion as they think of their household budgets. I use the number 99 percent somewhat loosely because outside of Carlitos, I have never met or discussed or pushed MMT theory on budgets with any of the hundreds and hundreds of people I met when I was canvassing for candidates.

    There are differences between ideological views and practical or realistic views. It is not an "either or" proposition. I can hold both views simultaneously. For example, I am an atheist, but it doesn't mean that I cannot sit down and enjoy the company of religious folks...or listen to their reasons why religion is so important in their lives. My dear mother was one of those and she had important reasons to be a "believer". Well maybe that's an extreme example.

    There is lots that I wish we could be better at from heath care to education to fairer taxation to creating good paying jobs as well as ending wars. I was an avid Obama supporter because he shared many of my hopeful visions in that respect. Obama was also a bit naïve in his early years of his presidency not realizing how ruthless (and effective) Republicans could be in putting party (and their big donors) first over the best interest of the United States. It was a reality check for both Obama and me.

    So It doesn't matter what I think or what Carlitos thinks. What matters is what the voters think (or don't think). Many are low information voters, one-issue voters, tribal voters, "facts don't matter" voters, and emotional voters...and add to that apathetic non-voters. That is the reality we have to deal with in trying to win back the House in 2018. Pushing ideological worldviews and applying purity tests to candidates doesn't win you many more votes. We have an enormous task ahead of us considering our lack of depth of qualified candidates for local state and federal offices. And by qualified, I also mean people who can see reality and compromise.

    Show me a candidate who actively campaigns on "deficits and debt don't matter" and I'll guarantee that candidate will lose. That's reality. A candidate who believes that better be quiet about it, much like an atheist running for office better not broadcast his/her worldviews to the electorate in a big way. They are destined to be closet atheists if elected.