WG: It seems to me that the problem MMT has to solve is how to substantially increase the buying power of low- and middle-income families without triggering inflation. We’ve seen that giving huge tax breaks to the wealthy doesn’t spur inflation because the rich have a high propensity to save. But if the bottom 80% of Americans receive a financial windfall, they are going to spend it. And thus we get inflation. One solution is to institute rigid price controls that will allow the 80% to spend freely and “catch up” on the goods and services they have been forced to do without. Price controls can be repealed once the economy has found a new supply/demand equilibrium.

I suppose another possibility is to simply allow inflation to run its course without any active measures taken by the Federal Reserve. So imagine the gov’t cuts a check for $100,000 to every household in America. Inflation will go wild–for the sake of argument let’s say 20% the first year. So the $100,000 is suddenly only worth $80,000. As supply begins to catch up with demand and buying power decreases, inflation for year 2 might be 15%. Now that $80,000 is only worth $68,000. With each passing year inflation ratchets downward along with the value of the initial gov’t payment of $100,000. And, of course, during this time a great deal of money gets spent and taxes get paid. Some households may be able to sock away a few bucks in a savings account. Others might burn through the whole $100,000 and have nothing to show for it at the end except for a higher standard of living.

Of course, the wealthy will howl. A guy with $100 million in the bank is not going to be happy if it’s suddenly worth only $80 million. Perhaps this guy can be mollified by the protection of inflation adjusted bonds. This would create the Mother of All Deficits, but who cares? It’s just money. Think of the enhanced living standards for 300 million Americans.

I’m just spit-balling here. If anyone else has any ideas, I’d love to hear them. But the policy of simply hoping the creation of more jobs will solve the problem seems to me to be the problem.

Me: You’re getting close to seeing the new paradigm, but you have to let go of the final conceptual vestiges of the present one and all of the theoretical falderal that accompanies it. For instance your first statement: “It seems to me that the problem MMT has to solve is how to substantially increase the buying power of low- and middle-income families without triggering inflation.” assumes there is no way to effectively do that. However, a 50% discount to the consumer at retail sale DOES do that because retail sale is the terminal ending point of the entire economic/productive process where production becomes consumption and exits the economy. So the individual gets $100 of groceries for $50, a $60k EV for $30k, a $500k house for $250k and the 50% discount reduces the payment on your $250k loan by half and the same for your insurance premiums etc. etc. etc. and every merchant gets their full price with the rebate aspect of the policy. Voila! You are the greatest American president or politician EVER in the eyes of the general populace. Sure, sure. sure you have to have some additional rules and regs o stabilize the system, but thats just human reality instead of slavishly believing in “free” market theoretics that turns economic theory into a fetish that is too holy to touch or amend in any way.

You could make the Discount 52% and allow enterprise to inflate their prices by 2% per anum before taxing them 100% on any illegitimate additional inflation costs. For any additional inflation that might be able to slip through the new system’s perousal you also index inflation to any same rise in inflation. Of course you’d want to make opting into the potential doubling of demand for all their goods and services with the discount/rebate policy (YIPPEE! for the merchant), conditional upon that enterprise agreeing to not unethically attempt to destabilize the system which the current fetishistic theoretics allows, by the 100% tax rule over 2% per annum. Wouldn’t it be nice if the economy and its rules was imbued with an ethic of gratitude for a gift instead of unregulated greed??? Finally, I suggest we create The Department of Innovation, Competition, Boycotting and The Individual’s Bully Pulpit which would do weekly press conferences that congratulated complying businesses and pointed a severe finger at non-complying ones and then asked the public: What are you going to do Mr. and Mrs. America, buy from this ungrateful enterprise…or the ones who actually have good will toward your long suffering and neglected self?

New paradigms are beneficial conceptual inversions of both temporal universe realities and mental inversions as well. That in fact is how you know its an actual paradigm change. So lets get to it!

RCS: What is also CRITICAL is the Education of our Masses of the BASICS of Modern Monetary Theory, which I honestly believe ,as a big assist and attention getter, due to our millions on the “day to day brink of disaster” ,that MMT’s NO#1 Policy- Government Guaranteed Job Program needs to be featured.

Me: Completely agree. A job guarantee is a direct gift of revenue to the individual. With the beneficial deflationary effects of my Discount/Rebate policy at retail sale both the job guarantee and a universal dividend of say $1000/mo. which with the discount/rebate would give every adult $2000/mo. worth of purchasing power for their entire adult lives could also be implemented.

Implementing the new key/core idea utilizing double entry bookkeeping resolves inflation and terminates the quantity theory of money. The world changes for the better for everyone.