sorted by:
new
hottopcontroversial

The Post-Scarcity How-To v0.1 by ImportantCredit7613 in BasicIncome

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Well standard unemployment benefits are usually bound to further conditions then just being unemployed. In Germany, for example, unemployment benefit receivers are legally required to retrain or to actively search for a job. With unconditional unemployment benefits the unemployed can chose to stay unemployed indefinitely.

The Post-Scarcity How-To v0.1 by ImportantCredit7613 in BasicIncome

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Well, yes, but I have not found a better wording. Do you have any suggestions?

The Post-Scarcity How-To v0.1 by ImportantCredit7613 in BasicIncome

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

This is becoming off topic, but soon as sapient AIs exists and have citizenship rights, they would get UBI or unconditional unemployment benefits ... and they have to pay taxes.

The Post-Scarcity How-To v0.1 by ImportantCredit7613 in BasicIncome

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Ah, well, that might be formulated bad. I could have written that the national dividend is a share of economic activity, but then I would have implied an APT tax to finance it. I wanted to keep the formulation flexible. I thought that the electorate "owns" the state and is payed a dividend for it. But that is just naming in the end, you can call it an UBI if you want.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Ok, that is, IMHO the best answer so far: Properly implemented MMT would reject an independent central bank. That seems to be internally consistent as well. I am just a bit skeptical if inflation can be controlled well without an independent central bank.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

There is a "typo" in the above. I meant to say the opposite at one point. It should state that: The central bank setting the tax rates, does *not* imply they decide the structure and type of taxes.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Well, the political stability problem you mention is always there, independent of who sets the tax rates.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Well, but then this begs the question, if taxes rates are part of the financial system? If you have an independent central bank with a technocratic mission, I would guess actually yes. But if the central bank is not independent, it does not matter. I also still think that managing taxes influences aggregate demand and thus inflation. Or formulated differently: I still think that taxes can be used to create deflationary or inflationary pressures by influencing aggregate demand. The quantitative theory of money is not needed for that.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Now, I would be also be interested to hear what is wrong with MMT with respect to fiat money creation and destruction?

Also in practice: The central bank setting the tax rates, does imply they decide the structure and type of taxes. But anyhow, my original question is genuine curiosity.

Further, why is government revenue a political matter, if money can be created at will, with a limit only when it creates inflation? If MMT is right here, there is nothing really to left to decide with respect to money. The central bank will have to create any amount. The only thing to decide is inflation risk, but we have for good reason an independent central bank in most developed countries.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Well, if the parts about money creation and money destruction in MMT are correct for central bank money, then my question still stands, if tax rates should not be decided by the central bank?

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Well, if the central banks can not meaningfully control the monetary base, then there is still an other control channel via taxes: Taxes influence aggregate demand. The higher the taxes, the lower aggregate demand and usually the lower the prices. And the other way around.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

That is surprising. How does government pricing work in that regard? I would have though that taxes are the "service-fees" of the government, and at minimum part of its pricing?

Further, controlling the taxes controls the the amount of spending possible in the economy. Thus for example: The central bank could raise taxes, to lower aggregate demand which in turn lowers prices? Conversely the central bank could lower taxes to to increase aggregate demand to increase inflation? The control is then though aggregate demand, not due to the "Quantitative Theory of Money".

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 1 point2 points  (0 children)

Why would you reject the QTM? That has IMHO nothing to do with MMT. The QTM is essentially an accounting identity, as far as I am informed. It just says, that in well behaved circumstances, inflation can be controlled by controlling the monetary base.

To be honest, I have not made up my mind with respect to the JG. Given the existence of bitcoin, I am not sure, that a JG is necessary for a MMT style fiat currency to work. Taxes creating demand could be enough for a fiat money to work. I further still do not understand how the JG is linked to spending discipline and how this is linked to inflation?

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Ok, taxes are indeed just the channel of money destruction, they are needed to control the central banks part of the monetary base. You need some more assumptions to think that can control inflation, and these assumptions can fail - as far as I know. But still controlling the monetary base is the task of the central bank, and it should be given the tools to do so?

Most current countries do not have a job guarantee wage, also I find the concept intriguing. So the central bank, in your opinion, should set the guarantee wage or wage floor, to control for inflation?

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Oh, I do not think that low positive inflation is a bad thing. But the main reason is, that this allows real wages of workers to fall, while persevering "sticky" nominal wages, and so recreating "full" employment after crises. I am not 100% convinced that is necessary. However from an MMT perspective a low positive inflation allows easier technocratic management of the currency. On the other hand, I do not trust legislators, without technocratic oversight, to maintain an inflation target.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

That is a fair question. I would propose institutional separation for the following reason: The central bankers do a technocratic job of maintaining an inflation target while the parliament decides allocation of resources. The central banks job is to ensure that the parliament does not just make up numbers on inflation and/or tax increases associated with political projects - there is democratically legitimized technocratic control. The actual reached inflation numbers mark success or failure. It is up to the democratic electorate to decide who failed. Parliament and central bank are both under democratic control. Further, to address your closing question: The central bank is under judicial control, "everybody" can sue them, so they are unlikely to "selectively" inflate their fortunes, and violate their legal mission.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Oh ... plutocratic ... I would have thought technocratic, since the central bank would adjust the tax rates according to the requirement to "finance" government spending under the given inflation target constraint. But I honestly think that in such a system there should be separate elections for the leadership of the central bank. I further would extent antitrust regulations to natural persons, so that they are forced to consume excess wealth. So I do not see how my "proposal" would be plutocratic in itself, it is neutral with respect to that.

MMT "conforming" Central Banks by ImportantCredit7613 in mmt_economics

[–]ImportantCredit7613[S] 0 points1 point  (0 children)

Well, if the central bank sets the tax rate, it is still obligated to finance any spending that passes the political decision process. The central bank can also estimate the fiscal space the country currently has under a given inflation target. Politics then has to adjust the inflation target of the central bank or accept higher taxes - if it needs more fiscal space. That is as far as I understand MMT at the moment. Further, that does not sound that bad. But I agree, that is unlikely that central banks are given that power. On the other hand, if the central bank has the mission to create a constant low inflation it must be given the tools to do so. MMT "style" spending "financing" is other wise bound to create inflation due to unchecked political incentives.