Posted To Billy Mitchel’s Blog 12/01/2015

I see absolutely no conflict in integrating both government infrastructure spending, which the US and many advanced economies dearly require due to the obsessive privatization they’ve been subjected to for 35 years, and direct monetary gifting to every citizen 18 and over. There is a scarcity of individual incomes in ratio to total costs and so total prices in each moment of the economy. This is true by cost accounting convention that all costs must go into price, and is missed by virtually every economist largely probably because very few of them have been businessmen themselves and so they do not have reality on the fact that equipment and facilities have to be replaced/upgraded and these along with other routine expenses are additional costs over and above original financing that will end up being charged to the individual in retail prices. MMT has excellent monetary insights and additional infrastructure employment is needed, but if one does not address the empirical facts of the cost inflationary nature of the productive process itself the system will remain inflationary. Businesses incur more costs than they have original financing to distribute to all employees and owners. Anecdotally some businesses are capable of making enough profit to survive such a systemic fact, but macro-economically the system is unstable and increasingly onerous as capital costs for high tech and eroding aggregate demand due to the disruptive effects of innovation and AI increasingly become realities. The system requires additional individual income to be stable. Let us integrate both additional employment and direct monetary gifting and accomplish the needed stability.

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