> What kind of jobs would this Fed-financed spending create? Presumably
> things that are not now provided by private markets - not Walmart
> associates, but well-paid child care workers and high-speed rail
> systems. It would take continued large spending on this sort of thing
> even after the theoretical point of full employment were reached. And
> at that point you couldn't just keep printing money - you'd have to
> tax. What then? Unless you're talking about using magic Fed money just
> to amp up the existing system, which sounds rather depressing to me.
OK, I get what you're saying now. First of all, I'm not speaking from an MMT POV. I was trying to answer Steve's question about how the MMT POV relates to the mainstream POV.
Second, you have to distinguish between stimulus-qua-stimulus (a somewhat apolitical goal) and stimulus as a strategy for permanently changing/expanding the public sector (a deeply political goal). If your goal is just stimulus -- which I guess is the case for lots of MMT'ers, but not for me -- then there's nothing wrong with the "depressing" strategy of amping up the current system. On the other hand, if you try to use stimulus as a strategy to permanently expand the size of the service-providing public sector, then yes, you eventually get to the point where to continue providing the services requires taxes, and you're no longer dealing with an arcane technical matter, but a profound conflict over the shape of the economy. Then there are some in-between cases: if you stimulate by spending on self-liquidating projects -- building trains and windmills, etc. -- then you don't necessarily run into the taxing problem: by the time you need to tax, lots of stuff will already have been built.
You're right that "free-money" stimulus isn't nearly as radical as taxing and spending. But Doug, we've got 9% unemployment. Don't we also have to think about stimulus?
>>
>> Yes. If I understand you right, this is really the answer-behind-my-answer. Doing things the MMT way would "give people ideas" in a way that would directly threaten property relations. You would probably have to expropriate the bond market. Which is part of my secret Comtean cookshop recipe, as it happens.
> Well, ok, then why talk this MMT stuff? That's geeky and evasive and ultimately fantastic.
>
I agree - and I'm not an MMT'er.
MMT is politically useless. That said, I do think it's intellectually useful. First because it throws a revealing light on certain macroeconomic truths. And second, precisely because it begs so many political questions that only class analysis can really answer.
SA