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The point is specifically about how the real-world accounting works for banking and government finance. MMT isn't a policy, it's describing the system as it already works today and how it's worked throughout history. And monetary policy is barely relevant to it. If assets and liabilities and balance sheets are not your interest, but you feel obligated to engage for ideological reasons with your own hypotheticals about radically changing the macroeconomic management from what's been working because you have your own prediction of impending disaster, I can indeed imagine that's frustrating.
MMT "advocates" are trying to explain how it works and why it has continued working despite people having your same fears for centuries, so that you can join us in sleeping soundly at night instead of despairing. FCFromSSC is not my 'opponent' in the slightest.
Well anyone can voluntarily do anything stupid. There can be a wide range of competence in macroeconomic management. The unsustainable argument is only strong if you think the system is headed toward involuntary crisis.
Voluntarily choosing to default on your own currency debt? Incompetence, not understanding the accounting, malice or kingly inconsideration maybe. In the US, the existence of the debt ceiling law for example is partially incompetence/misunderstanding, but mostly kept around as a political weapon to use against the opposing party in power.
OK solid. That's what I opened with in the very first post: good macroeconomic governance entails not causing runaway accelerating inflation by making the deficit too large. And we judge by outcomes, we don't get sidetracked counting the number of digits or commas.
This is where we disagree and where MMT starts to have prescriptive implications. It's not really an economic disagreement, it's a political one about the implications of economic theory.
I believe that MMT provides the perfect framework to justify irresponsible fiscal policy.
For instance, one key insight is that unlike personal debt, state debts are not something that actually has to be repaid in full. This is of course true. Generally destroying such arguments as the idea that taking on debt is spending one's children's money in advance and so forth.
The truth of the matter, as we seem to agree, is that, like regular investment debt, this depends on the ability of the borrower to use the funds to create enough value to outrun interest.
But putting this in the hands of politicians, who are by constitution convinced that all the programs they support are good investments, allows them to argue for infinite amounts of debt, which is not sustainable.
Keynesianism has this same problem: the general idea of manipulating spending to soften the blows of the business cycle can work on paper, but in practice people use it to justify loose policy in times of crisis but never the austerity in times of plenty required for the math to work out.
For macroeconomic theories to be useful tools of policy, they have to be usable by the flawed human beings that make the decisions, otherwise they must remain descriptive tools more appropriate to history than to the future.
I claim that the range of competence you think is wide is not so wide. That it ranges from the mildly irresponsible to the catastrophically incompetent, and that men must be guided by strong signals to avoid debt crises, lest they slowly build catastrophies to leave to their successors such as rulers of the West have been doing since people gave up on ever solving the debt issue in the 90s.
I agree the debt ceiling laws are silly in a sense, but they are at least an attempt to provide such a signal, one that has grown more silly ever since we decided to ignore and abandon the much more serious signals given by the gold standard (which of course had its own share of issues too).
So as you seem to be an advocate of using MMT to formulate policy, I ask what your solution to this problem is, and if you've seriously thought about it. That's what I have been asking since my first comment, thought I suppose unclearly. It's easy to get lost in sidebars in such arguments.
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