Theme: Incentives

Timeliness. In a shock, tax breaks, lowering interest rates, and fiscal policy are extremely slow, and it certainly appears from the data, largely ineffectual compared to simply distributing cash to every citizen to do with as he may. During the 2008 Crisis only me and Galbraith were talking about it (and I am nobody). Later a few others tepidly put forward the argument. Galbraith died, or he might have gotten somewhere. We could have all but paid off american home mortgages with the trillions we spent. So that was what I recommended. We could have done that and the world pricing structure would not have had to adjust. Since then I’ve come to understand that while MMT cannot work without hyperinflation, (a) there is no meaningful reason for consumer interest, and (b) there is no meaningful reason for NOT distributing liquidity directly to consumers rather than through the financial system (monetary policy), the state (fiscal policy), or tax rebates (tax policy). The problems with these methods is that they must be algorithmic (rule of law) just as is targeting the money supply today, or politicians will destroy the economy for votes. The reason I advocate this system is not just reciprocity (and therefore morality) but I want to force the financial system to seek returns on innovation (investment) rather than returns on rents (loans). And I want to addict the population to those returns, so that the bureaucratic government is incrementally eroded in return for increasing those direct redistributions, and so that people are hesitant to allow immigrants who merely capture those dividends leaving less for the citizenry. This is the best way to kill the state I have ever come across.

Timeliness. In a shock, tax breaks, lowering interest rates, and fiscal policy are extremely slow, and it certainly appears from the data, largely ineffectual compared to simply distributing cash to every citizen to do with as he may. During the 2008 Crisis only me and Galbraith were talking about it (and I am nobody). Later a few others tepidly put forward the argument. Galbraith died, or he might have gotten somewhere. We could have all but paid off american home mortgages with the trillions we spent. So that was what I recommended. We could have done that and the world pricing structure would not have had to adjust. Since then I’ve come to understand that while MMT cannot work without hyperinflation, (a) there is no meaningful reason for consumer interest, and (b) there is no meaningful reason for NOT distributing liquidity directly to consumers rather than through the financial system (monetary policy), the state (fiscal policy), or tax rebates (tax policy). The problems with these methods is that they must be algorithmic (rule of law) just as is targeting the money supply today, or politicians will destroy the economy for votes. The reason I advocate this system is not just reciprocity (and therefore morality) but I want to force the financial system to seek returns on innovation (investment) rather than returns on rents (loans). And I want to addict the population to those returns, so that the bureaucratic government is incrementally eroded in return for increasing those direct redistributions, and so that people are hesitant to allow immigrants who merely capture those dividends leaving less for the citizenry. This is the best way to kill the state I have ever come across.