Me: MMT is a good reform exactly like UBI, a job guarantee and all of the correct refutations of many of the assumptions of neo-liberal macro.
Now, a 50% discount/rebate at retail sale is a paradigm changing policy because it is an actual action, because it mirrors the way that money is presently created albeit only as debt (accounting entries), because it is implemented at a point that is strategically, integratively and continuously a significant part of the economic process itself (retail sale) and because the policy is the very expression of the new monetary and financial paradigm, namely Direct and Reciprocal Monetary Gifting.
Finally, it resolves virtually all of the deepest problems of modern economies (individual monetary scarcity, systemic monetary austerity and price and asset inflation) and does the impossible so far as orthodox economic theory is concerned, that is it BENEFICIALLY integrates price deflation into profit making economic systems. This last comprises two of the primary signatures of historical paradigm changes, that is complete conceptual opposition and temporal universe inversion of reality.
GH: I want to join Craig’s crusade but form a break-away movement. I think the discount on retail sales should be 37.25 per cent not 50 per cent. Now, how do we decide who’s right?
Actually, I’m not sure how we enforce either since retailers will be able to argue about the base from which the discount functions but no doubt Craig has a solution.
Me: Well there’s a no brainer answer to that question. Retail sale is the end point of production so it’s obviously whatever their price is at that point that is reduced 50%. Now one could say that: “Well what if the retailer and/or any other business model before retail sale just bumps their price by 10-20%?
Answer: 1) part of the opting into the 50% discount/rebate policy will be that if your overall costs exceed the cost savings that the 50% discount/rebate bequeaths (payroll tax eliminations, large corporate and individual income tax cuts) read never, then you will able to raise your prices. If you don’t meet that standard then any revenue garnered from a price rise will be taxed at a rate of 100%.
2) This applies to all business models
3) Competition. If you raise your prices by a largish percentage how much market share are you likely to lose if even one of your competitors doesn’t raise their prices?
4) Even if despite the tax incentives and tax dis-incentives that would be a part of the overall program of implementing the new paradigm and its policies, if yoy inflation is still 2-3% then index the discount percentage to that percentage rate…and no harm no fuss everyone’s purchasing power is still doubled.