Sovereign govervments shouldn't need to levy anything to be able to "fund" themselves, but this is what you get when you surrender your monetary sovereignty.
No, it doesn't. What could lead to inflation is government bidding up prices by spending in areas where the resources are already fully employed. That can happen whether the government runs a deficit or a surplus. If the government spends on something where there is idle productive capacity, the spending is not necessarily inflationary, as the increased demand is easily met by an increased supply. If, on the other hand, the government spends on something where the production is already at full employment, they will be engaged in a bidding war against the private sector (a bidding war the government will always be able to win) which will drive prices up. My point is that both these scenarios are independent of whether or not the governemnt runs a deficit. It is simply a question of real resources.
It could, but it isn't. The US national debt is solely denominated in US dollars: A currency of which the US government is the monopoly issuer. Thus the US government cannot run out of money to pay its obligations.
I just want to point out that the debt itself is not an issue. The problem with this bill is its cuts in welfare and horrible distributional consequences, but the increased deficit and debt are not.
The "debt" of a monetarily sovereign state is really nothing like the debt of a household or business. The US could pay off all its debt in an instant by an act of Congress. Not saying that would be a good thing, but there are no financial constraints stopping Congress from doing that; only political ones.
How is that? In my view, MMT follows logically from the simple accounting idintity that debits and credits must balance, and the oberservation that the government is the monopoly issuer of its own currency. I'd be glad to hear your perspective though.
Totally agree. The intial tax liability declared in a currency has the purpose of creating demand for the currency so that people, either directly or indirectly, want to work for the government to get the money they are issuing.
This effect is probably most import when the currency is first created, but at the same time also the most important function of tax: It is what goves the money its value.
True, but somene has to, and they will create a demand for the currency. If I hear that Joe the baker needs money to pay taxes, and I want to buy bread from him, I know he will accept the government currency as payment for his bread. This in turn makes me demand money to be able to buy the bread.
That is true, but Bitcoin, like all other crypto"currencies", is a Ponzi scheme. Its value is driven purely by speculation, and the hope that it can be passed on to a "greater fool" for profit. This is true for a lot of financial assets, by the way.
The government "debt" is not a problem whatsoever. It cannot be a problem. The so called debt is simply the difference between the amount of money created and the amount taxed. If there was no "debt" there couldn't be any saving in an economy. If the government wanted to, it could simply "print" the money to pay off all its debt tomorrow. It souldn't necessarily be a smart thing to do, but there wouldn't be any financial constraints stopping them from doing it.
that people always act in their own best interest (they fucking don't)
Totally agree
that people can actually choose not to buy the product
This is actually pretty well deacrived by what's called the price elasticity of demand in standard neoclassical models. For things like housing one might say that the demand is very inellastic: A change in price does not affect the quatity demanded.
There actually isn't such a thing as a "natural rate of unemployment", so all of those 4% are part of the excess productive capacity.
There will always be some people out of work for various reasons
If those people are unemployed simply because their previous contract expired a bit before their new one started (frictional unemployment), then I agree it is totally unproblematic. If it is because there aren't enough jobs going around (structural unemployment), it isn't.
That money comes from somewhere
All money in monetarily sovereign countries come from government spending: It is spent into existence by the central bank marking up the reserve accounts of the banks of the people and businesses it pays to. The money in circulation and saving is simply the difference between total government spending and revenue. It is important to realize the order of operations here: The governments has to spend before it can tax, or else there wouldn't be any money to tax.
Sovereign govervments shouldn't need to levy anything to be able to "fund" themselves, but this is what you get when you surrender your monetary sovereignty.