Me: All excellent points. The FED is actually set up to protect the banking system, and it operates within what is considered free market theory but which is actually alternately goosed and strangled monetary chaos. So there is a fundamental theoretical misunderstanding/problematic belief that the current system is free when its actually chaos and which is ultimately benefited only by finance via their monopolistic paradigm concept of Debt as in the burden to repay ONLY. The solution is to implement policies that, like every new paradigm, are in complete conceptual opposition to the current one. The policies of MMT and all of the leading edge reforms all align with this because what is a job guarantee? A gift of revenue to whomever wants a job. Fiscal Deficits? Monetary/revenue gifts to government employees and contractors. What is UBI/Universal Dividend? A sustaining level gift of money. What is Public Banking/a true publicly administered banking system? Banking that is a beneficial public utility as opposed to private parasitical, paradigmatic dominance, and that, in a monetarily sovereign nation, is freed from the necessity of making a profit. (Note: This doesn’t mean there will not be loans/indebtedness, only that debt will not dominate and eventually/inevitably overwhelm the economy as Steve Keen and Minsky have shown has been the case).
Finally, what single policy would end inflation forever, double everyone’s purchasing power and create much more abundant demand for every enterprise’s goods and services…because of its strategic implementation at the single universally participated in and thus aggregative/macro-economically effective point in the entire economic process, namely retail sale?
A 50% Discount/Rebate policy at retail sale. In other words a monetary gift of half of the price at the terminal ending point of the economic process that:
1) utilizes the same method that Finance uses currently to create new money ONLY as Debt, that is, equal accounting entries summing to zero,
2) as mentioned above and as all historical paradigm changes have been, is in complete conceptual opposition to the current paradigm (Debt as in burden to repay Only vs Direct and Reciprocal Monetary Gifting) and also completely inverts the current temporal reality of the pattern under analysis (individual and fiscal/systemic monetary austerity accompanied by erosive inflation to beneficial monetary abundance and price and asset deflation)
Of course, as humans are not an altogether rational and ethical species, even new paradigms need an additional regulatory and policy program to counter that fact. A program that is in philosophical alignment with the new paradigm concept.
WG: I have to admit that your comment takes me back to my undergraduate days of trying to make sense of Hegel’s philosophy. It seems your central thesis is the 50% discount/rebate policy at retail sale. I believe you and I have had this exchange before. Your prose is way too dense for me–and thus, I expect, for most readers. You may have something important to say, but for the life of me I can’t fathom what it is. I don’t want to miss out on your insights, but I wish you could formulate them in a more accessible style. Thanks, Wally
Me: The 50% Discount/Rebate at retail sale is the primary policy because it is the very expression of the new paradigm concept (Direct and Reciprocal Monetary Gifting) and because it is at the single aggregative/macro-economic point in the entire economic process because everyone participates in retail sale thus its beneficial effects (doubling of purchasing power, ending inflation forever and greatly increased demand for every enterprise’s goods and services) are universally experienced.
As I have said many times here the policies of MMT and other leading theorist’s conceptually align with Monetary Gifting so I’m not trolling them I’m just trying to get them to look at that very expression of the new paradigm. I’m also trying to get them to analyze on the paradigmatic/entire pattern change level instead of simply on the reductionistic reform level which deals with separate problems within the pattern under analysis.
Paradigms are long term unconsciously acculturated “things” so they are hard to see, and new paradigms, being new, are even harder to see because being in conceptual opposition to the current paradigm they require a willingness to go against the logic of orthodoxies that have grown up around the current paradigm.
The best way to begin seeing the efficacy of the 50% Discount/Rebate and the beneficial effects of the new pattern concept is to simply do the relatively simple math of that policy until you really see how it indeed mathematically, empirically and systemically resolves the problems I stated above. Then it becomes a no brainer because no other reform even comes close to being able to resolve those problems…all in a single policy that expresses the new concept.
RP: It depends on what is driving the inflation. Read John Maynard Keynes 1940 paper. (small book) “HOW TO PAY FOR THE WAR!” The problem is not that we don’t know how to control inflation, the problem is no one is willing to say or take the necessary steps. FDR was not!
John Maynard Keynes 1936 “General Theory” is central to the macroeconomics textbook written by Mitchell, Wray and Watt according to its authors. In today’s toxic political environment I understand why someone like Stephanie Kelton would use caution when advocating for the necessary steps, but instead throw down breadcrumbs…AKA Fiscal Policy. It’s not that hard to figure out.
Me: There is indeed more than one reason for inflation, but inflation IS inflation. So the point is to not only to end inflation, but to transform it into beneficial price and asset DEFLATION. A reform (sometimes and painfully) does the former while complete and BENEFICIAL inversion of pattern reality is one of the classic signatures of paradigm change. Thus the 50% Discount/Rebate policy at retail sale.
Also, historically reforms last for a while (Keynesianism lasted for 40 years and then got morphed into Neo-classical macro) but again, historically, everything adapts to a new paradigm, not the other way around.
Ending inflation forever also opens up the ability to run the kind of fiscal deficits MMTers only have wet dreams about. The better to confront climate change, so it aligns with their intentions.