Portlander: Tariffs are inflationary, while a trade war is recessionary. Congressional Republicans hope to pass a big deficit busting tax cut next month which could forestall recession but boost inflation. But tariffs raise revenue and reduce the deficit, which will cool down the economy. So, what will the net effect be? What does MMT recommend to Congress and the Fed?

I guess that will depend on the goal of economic policy. Let’s assume the goal of Congress is to try to avoid a global recession amidst a trade war. But then, what should the complementary goal of the Fed be? To accommodate or tighten? Wouldn’t MMT say “go ahead, cut taxes, don’t let the ‘deficit myth’ get in the way; raising interest rates aren’t the answer for tariff-induced supply-side problems, so let interest rates drop”? If so, then the deficits from tax cuts would be financing U.S. consumers to keep buying imports with tariffs, while other countries import less from the U.S. with their own tariffs. While big tax cuts and a loose Fed may avoid a global recession, it sure would worsen the trade and fiscal imbalances. So, please tell me: what is the goal of economic policy today? Have we even defined the problem? Does policy even fit the problem? Do economists even agree on what the problem is?

If the problem is correcting structural trade imbalances, why not forget tariffs, lower interest rates, and let the dollar fall 30% to where it was in 2010? Do economists even agree that eliminating structural trade balances is a good idea in a highly integrated global economy? If so, is having the dollar serve as reserve currency for the world the root cause of the problem (per Triffin’s Dilemma)?

As Einstein said, “if I had but one hour to save the world, I’d spend the first 55 minutes defining the problem.” Isn’t the herd mentality of the economics profession, which cheered the glory of free trade for decades while ignoring the social costs of lost jobs and whole communities in the U.S. part of the problem? Can’t economists unite around a positive vision for this country? Can Stephanie help in this task? We seem to be sleep-walking to disaster.

Me: Interesting post. My response to Einstein is: Spend 10 minutes discovering the deepest problem (an old paradigm gone on for too long) and spend however long it takes you to realize that nothing short of a new paradigm…is the necessary and applied solution. Analyzing historical paradigms to find their signatures is a good start. Recognizing that the entire body of “free” market theoretics is a misnomer is very important because, as you point out in your post…nothing actually works because it swings from half truth to half truth reforms which is indicative of its lacking any known and enforceable barriers within which human freedom can actually exist. You want increased commercial and individual economic freedom? Find the new monetary paradigm and apply it strategically. Why? Because money makes the world go ’round for enterprise and the individual yet the dumb shits among us insist on creating austerity instead of finding a way to resolve the anomalies we all obsess about by stategically applying the new monetary paradigm of GIFTING, using MMT’s insight that money is created with accounting entries, at the point of retail sale with a 50% Discount/Rebate policy.

Me: And here’s the final realization that one is really on to something big: Serendipity, that is when doing something new not only solves problems in the area under analysis, but surprisingly enables/causes improvements in other areas of life thought not relevant or even possible.

Who’d have thunk that bean counting/double entry bookkeeping and Gifting applied to the economy…could be the greatest opportunity to self actualize gratitude for a gift…since meditation and prayer??? Or is the idea behind Christmas (an aspect of the natural philosophical concept of grace as in gifting) entirely bunk?

Me: Yes, Trump is the USA empire’s equivalent of Caligula. He nominated the horses of Hegseth, Patel and Bondi didn’t he? Where’s the centurian guard…when you really need them?

Actually there’s probably ways to castrate him politically. I should pitch the new monetary paradigm to him. Its completely unorthodox which he’d probably like for its illogic and initial outrage and chaotic effects. Republicans recognize and go for power much better than democrats do. The lack of response by Stephanie and general refusal to look at the temporal universe effects of my posts by all but a few here is proof of that. Now that I think about it him advocating for it might be what brings out financial seal team 6 and saves us from hyper vomiting for another 3.5 years.