Carlitos -- Thanks for the analogy. Actually I do understand much of MMT when I concentrate, but for a senior like me it's kind of like learning a second language. The need to "think" in that second language is a major hurdle and milestone, especially when everyone around you is speaking your original language. That original language is the reality of the masses, and thinking in the MMT language requires a conscious shift out of one's comfort reality (original language). Anyway, I digress....
If I can expand on your sink analogy, isn't there really two faucets, one that is controlled by the legislative branch (fiscal) and the other the central bank (monetary, Federal Reserve)? And they don't always work together, but rather independently of each other. The fiscal tap is probably a bigger tap, but one cannot ignore the effect of the central bank opening and closing their tap by changing the interest rates or engaging in quantitative easing (QE).
Furthermore, your drain isn't really a drain that lets the water (money) go down into the sewer and lost forever. On a global scale it is a closed system, and much of the money that supposedly goes down the drain as leakage into China (for example)accounts actually finds its way back to the USA through one of those "pipes" to reside in the central bank drawing interest from treasury notes. I think you lectured us on that a few years ago on how global accounts have to balance.
Also on your point about the 1950s and 60s with a trade surplus, I can certainly understand that as one of the factors that makes the 50s and 60s perhaps not a valid comparison to modern day trade and taxes. However, I am less concerned about trade imbalances or the appearances of trade imbalances simply because of the way they are calculated as assigning full value of a product to the export country. In the modern Global Value Chain, value is seen to be added in several steps and by several countries manufacturing component parts. The example often cited by economists is the Apple iPhone in which value added starts in the USA with research and design and also ends in the USA with value added in marketing. But in the way trade exports and imports are calculated, the Chinese get credit for the full commercial value of the iPhone on export, even though the assembly of the phone by Foxconn in China perhaps represents less than 10 percent of the value added in the global value chain. Anyway, I digress on that point also. It's something that Trump certainly doesn't understand.
I am a globalist and pretty much a believer in free trade with minimal tariffs. But I also believe all of our trade agreements are in need of continual updating as market conditions and technologies change so yes there are inequities that need to be cleaned up in these agreements that weren't issues at the time the trade agreements were signed off. However, I do not believe that solving the inequality of income in our society can be achieved through tariffs on trade. Rather it has to be achieved through fiscal policies of taxation and spending. I think we were largely there up through the 1970s, but Reaganomics changed the playing field to favor the rich, and we haven't been able to get back to that playing field for many reasons.
The number one reason for inequality is perhaps that so many people in our society do not appreciate or care to participate in our democracy by understanding the issues and voting intelligently. I met a whole hell of a lot of those people as I knocked on hundreds and hundreds of doors from 2008 to 2016. I know I keep harping on this, but the only thing really wrong with our democracy is that it is not participatory by its many citizens. And that's not really because of any government imposed restrictions but because people are apathetic, ignorant and/or take our democracy for granted. That's harsh but that's also reality.
Anyway, going full circle and getting back to the topic of tax cuts having an immediate effect on household spending (as opposed to going through a fiscal legislative budget and spending allocation), I can certainly agree. There is a definite spending lag by going through the bureaucratic budget and spending process to build a new bridge or highway. Certainly also, as one moves up the income ladder or into the realm of corporate budgets and spending, the immediate benefits of the tax cuts are less evident. Most of the immediate benefit of tax cuts derives from poor people who live hand to mouth and immediately spend the money. But for middle class people like me (before I retired) any tax cuts didn't change our standard of living. It just accelerated my savings for retirement...adding to demand leakage.
Of course, baby boomer retirees like me are now spending our savings in a big way, but any beneficial tax cuts just slow the rate of withdrawals from my savings.
The point of all this discussion is that there are several factors driving our economic prosperity, and just focusing on one can detract from our grasp of the bigger global picture. It is complicated and I for one can identify many extenuating factors as I have above, but I don't know if I am making mountains out of molehills. Those are the arguments for Paul Krugman and Stephanie Kelton.
Thanks for sharing your insight as usual. It is much appreciated and stimulates my thinking.