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Criticism of MMT
Is anyone (including rone) talking about MMT though? Seems to me what we're talking about is traditional Keynesianism. The point is that at a time of economic contraction and flux we need to spend more to support the economy through the turbulence. For better or worse, that's what the govt is doing, and labour are questioning that at the altar of balancing the books rather than doing what they should be doing, which is demanding more and better targeted support. The MMT part of this is the debate about how a govt finances its spending, and that's not really disputed. All we're talking about is politicians of all colours being honest about it.
Ryan-Collins is no fan of MMT either. Is this a straw man or what?
Labour are just asking the government to transparently publish what they are doing. As is normally expected with what is, let’s face it, a budget announcement in all but name.
Labour are just asking the government to transparently publish what they are doing.
What's important is not the request for the OBR to report on this new spending, but the motives for doing so and the message it sends to voters. Labour clearly want to send the message that they would be more restrained than the govt are being, and their previous proposals back that up. The bigger question is whether labour actually believe this obsession with fiscal restraint or whether it's just politics?
Labour are just asking the government to transparently publish what they are doing. As is normally expected with what is, let’s face it, a budget announcement in all but name.
Yep, that's all i've read from about 3 pages ago now, Reeves looking for the OBR to do their job, Labour have done well from this, they had their policies nicked, but then implemented out of process.
We've now moved on to bringing in an entirely new economic model though, so Labour will still be getting it in the neck on here for not revolutionising the entire UK economic process on theory, as i don't think anywhere on the planet runs the models being discussed!
Labour clearly want to send the message that they would be more restrained than the govt are being,
I don't think that's what they're doing, the critism of Labour spending plans is always "Is it costed?" Labour are just flinging that back at the Tories, so yes, it's just politics.
Labour clearly want to send the message that they would be more restrained than the govt are being
I read it as wanting to send the message that the current government don’t know what they’re doing, hence the lack of transparency and scrutiny they are putting their Treasury announcement to.
What’s important is not the request for the OBR to report on this new spending, but the motives for doing so and the message it sends to voters.
That Rachel Reeves and Labour requested that an emergency budget occur, i'm glad you're backing her now Daz, she (and Labour, SNP, etc) wanted this done properly, with appropriate information provided to Parliament.
so Labour will still be getting it in the neck on here for not revolutionising the entire UK economic process on theory
I don't think anyone is talking about 'revolutionising' the uk economic system, just being straight with the public about how it works. Do that and we can move the debate on from where the money comes from, to where it should go and how it is used.
as i don’t think anywhere on the planet runs the models being discussed!
Most sovereign states who have their own currency already run on the model we're talking about. We just want them to be honest about it.
Most sovereign states who have their own currency already run on the model we’re talking about. We just want them to be honest about it.
You'll have to tell me again how we're doing it differently, the Central Fund model is pretty much aligned to most in the world, or if you change some of the terminology, how businesses around the planet function?
The models being discussed aren't hugely different either, it's working the models on what came first, the chicken or the egg in most instances.
Do that and we can move the debate on from where the money comes from, to where it should go and how it is used.
The idea that just knowing where the money comes from will change the conversation about how it's spent is naive I think. All it will do is change the arguments a bit.
just being straight with the public about how it works
Can you do that with a 3 word slogan that will stick with the public?
Could easily belittle it with a 3 word slogan, which do you think would work with most of the public? Remember, most people pay very little attention to Politics, Labour trying to explain to the public how government expenditure works would fail and hand the tories an easy win with a 3 word slogan despite that slogan being nonsense.
Can you do that with a 3 word slogan that will stick with the public?
No but we can easily start to demystify it and challenge the myths associated with it. Stuff like:
- Government finances are not like a households because the govt can create it's own money. This is a good thing because otherwise we would have control of our economy.
- The deficit represents net investment by the government in the economy and is a good thing.
- Govt borrowing/debt is the savings of people/businesses and is a good thing.
- The amount of money created is limited only by the economy's ability keep up with demand. Too much is bad, too little is even worse.
These are all true and not difficult to understand, yet for some reason we tell people the opposite.
Can you do that with a 3 word slogan that will stick with the public?
Not with Labour's current Comms.
But seriously they need to stop with this - the horse has bolted on public finances. You aren't going to see significant societal change without admitting the government can spend without the need to pay for it.
Now the more relevant question would be what should a progressive imaginative government be spending on?
Do we have the resources, can we train people up, can we provide the infrastructure... Etc.
And don't let any fool tell you this is communist or socialist - It's not, it's just good application of a sovereign state's power to fund projects for the benefit of a balanced economy.
You want to blame something - blame the Thatcher for starting the lie that there is only tax payers money.
Tax payers can never be the source of money.
Why do we pay tax then?
Or "Why should I pay tax then?"
Crazy that so many people are suffering when there are so many tools to stop it.
John Mc has a point tbf
Interesting one... it says "verdict on the fiscal impact of substantial borrowing"- puts the tories in a position of either saying their policy is bad, or that there is a magic money tree. That's already the case of course but it's never really been adequately bashed out. Labour need to nail that- first, make the tories admit that it was bullshit, and second, make sure that Labour can use it in future, because it's such an essential tool and right now the visuals are bad, and wrong, for it.
And the inflationary question- you can be against Sunak's spending package but not against spending, you don't say "you're wrong to spend", you say "this is stupid spending". Attack the money that's being given to those who don't need it, etc. Attack the Tory approach of allowing higher bills then giving people money to help pay the higher bills, as opposed to restraining bills and not having to give people money.
So it could be smart play. Or it could be very stupid. I think it depends on what they do with it. Obviously Starmer's Labour are terrified of being depicted as spenders, and I really do think that they might talk themselves into being financially more conservative than the tories. Which would be out and out moronic, since the people who believe that the tories are financially responsible and that Labour will spend too much, will still believe that even if Labour ran a surplus. The Tories can spend what they want, and promise to spend less, and break that promise, and still be "financially responsible" while Labour when they promise to spend less are basically failing their purpose, while not being believed/trusted.
But none of that goes into a three word slogan 🙁
I agree with all of that ^^^^^^
But none of that goes into a three word slogan
“****ed right up” describes the paradox adequately
Just for clarity no one is saying don't attack the Tories for spending on bodged up deals. Obvious?
My original point was that RR is wasting breath on *how is it going to be funded* which is ridiculous at this conjecture. And lays the case for the Tories to go okay - let's not give the poor support.
No one is on the streets demanding balanced books.
Like I said earlier there is a truth to government spending, and like Thatcher , Teresa May (there is no magic money tree).and now Rachel Reeves - they are distorting the truth in the hope of claiming voters for all the wrong reasons.
Labour got close to understanding the value of MMT in 2016 but then opted at the last minute for fiscal credibility because they thought it would look great to have costed everything.
Papers still pulled it apart.
Anyway this morning Starmer is telling people it's their patriotic duty to celebrate the Queen's gig.
In the Telegraph.
One day I will wake up to something useful.
Why do we pay tax then?
Or “Why should I pay tax then?”
1) to take money out of circulation. Hence the need to tax the rich more so they don't have all the buying power and hoard resources. Stop inflationary pressure form too much government spending (unlikely given how people's spending power is diminished.)
2) to drive policy. Tax on junk food, fags etc.
3) to give value to your currency. The government demands payment of taxes in its own currency. You have to earn money to pay taxes.
The money to support the energy bills is a handout to the energy companies for sure, but I'm betting it was the quickest way to deliver some form of support and keep people quiet for a short while.
Short term - but it's support of some sort which crucially the government can afford.
Long term it's a different debate.
to take money out of circulation... to drive policy... to give value to your currency
You miss the point... people will ask "why should I pay tax?"
Most people are compliant when it comes to paying tax (and voting for parties that propose the collection of tax) because they feel (even if they understand that it's far more complicated) that public services, and help for those that need it, are paid for using their taxes. Will they be as willing to pay and vote for taxes to prevent a currency crash...?
But enough of the "chicken and egg" nature of explaining MMT, this thread always gets bogged down in it... why not start another one, where it can be discussed at length?
Oh and one last thing - if I was to go down a path of nailing a short sound bite (maybe not 3 words) - I would remind people "the government has its own bank."
Surprising how many people don't know that and think it's a private institution.
The 38th British Social Attitudes survey found that:
- 27% disagreed in 2019 with the proposition that ‘the government should redistribute income from the better-off to the less well-off’. Now the figure stands at 30%.
Welfare spending is universally unpopular, even amongst people who would benefit from it. People in the UK agree broadly that society is unequal, but only a minority want to spend public money resolving it. This pretty much puts Labour on the back foot every single time. If you wonder why the Tories can do well in places that will shafted by their policies? This is why.
Corbyn, McDonnell and Abbott (rich disconnected London elites) telling people that they'll get hand out* went down spectacularly badly in socially conservative northern towns. Telling those same people that this iteration of Labour won't do that polls better than you'd probably imagine.
*That's broadly how policies like free broad band were received.
John Mc has a point tbf
Usually a very bitter point, same with Andrew Fisher, they're just arguing against Labour as they hate them more than the tories, like a few on here.
It's also weird how they see what Rachel Reeves has asked the OBR to do as reassessing the bill, it's not, the bill has gone through, that £21 billion is being set in motion, she (and Labour) are again just asking why the tories went about it this way, without proper checks and balances, without an actual budget, etc, etc.
Still, i guess we could move to MMT, like so many other successful nations have used, that could solve all our problems, just print more money, we could be the richest country on the planet soon!
Welfare spending is universally unpopular, even amongst people who would benefit from it. People in the UK agree broadly that society is unequal, but only a minority want to spend public money resolving it
That is because they have had decades of dogma preached at them. Labour should be making counter arguments against that dogma. It is no good just fighting it for 6 months and giving up saying "oh well we tried, lets just join in with that narrative" they need to keep making the correct arguments for policies that are meant to be at the core of their principles permanently.
They are capitulating the narrative, the ground and the rules for any argument to the torries before they even start. How are they meant to convince anyone like that?
Usually a very bitter point, same with Andrew Fisher, they’re just arguing against Labour as they hate them more than the tories, like a few on here.
I see some pretty daft comments on here but the claim that Labour MP John McDonnell, and Andrew Fisher (the bloke who wrote the 2017 Labour manifesto) hate Labour more than the Tories is spectacularly daft.
Labour should be making counter arguments against that dogma.
Yup, it's called "campaigning". It's what political parties are expected to do.
That is because they have had decades of dogma preached at them.
I think MPs telling people what's best for them is why politicians are universally distrusted. If politicians actually listened to what people said we'd probably have a better and more supported system.
Is that what you think campaigning is?
And you think Thatcher changed the social, economic, and political landscape, because she "listened to people"?
If politicians actually listened to what people said we’d probably have a better and more supported system.
Or we could cut out the middleman and allow people to make decisions for themselves? 😏
Still, i guess we could move to MMT, like so many other successful nations have used, that could solve all our problems, just print more money, we could be the richest country on the planet soon!
All the last few pages of debate and links to very current papers and what have you gleaned? Not much with that point it appears.
You don't move to MMT - it is description of how the current UK Government finances work. In fact any sovereign nation with a central bank and floating currency.
MMT does not advocate printing money to get rich either. MMT is very clear that spending has to be matched to the resources and employment available as they're the real restrictions.
Every anti-MMT opinion piece I've ever seen is based on misunderstanding MMT.
MMT doesn't advocate printing money - it advocates the government is not constrained by a limited amount of £££s. It means you can't use the excuse we've ran out of money as a reason not to spend.
It also describes that spending comes before tax, and borrowing is not necessary for the spending to take place.
Do yourself a favour and read the the deficit myth.
Welfare spending is universally unpopular, even amongst people who would benefit from it. People in the UK agree broadly that society is unequal, but only a minority want to spend public money resolving it
They simply don't understand how an economy like ours should function because they think the 'work-hards' and the wealthy fund the state.
27% disagreed in 2019 with the proposition that ‘the government should redistribute income from the better-off to the less well-off’. Now the figure stands at 30%.
And that could be brushed off with an accurate description of how spending works. Labour did not choose that route in 2019.
It also describes that spending comes before tax
Egg, chicken, chicken, egg.
As it happens, I agree with this model, but think many people vastly overplay the political advantages of espousing it. Can we have a separate thread on it?
Egg, chicken, chicken, egg.
As it happens, I agree with this model, but think many people vastly overplay the political advantages of espousing it. Can we have a separate thread on it?
That's not an accurate analogy.(Egg chicken etc) Spending does come before taxation. It has to otherwise where did you get the money from to spend. There is no ambiguity.
Spending comes into existence via the BoE and /or commercial banks. The state is very clear on who the only people who are licensed to issue money. Currency issuers v currency users.
The political advantages are numerous. It means Rachel Reeves and Rishi Sunak can't keep telling everyone the government doesn't have money of its own.
Austerity was built on the lie of tax payers and balancing the books. That is not politically insignificant is it?
Fair enough on a separate thread. But these things are linked.
Can we have a separate thread on it?
We don't need a new thread. The discussion on MMT is directly relevant to Starmer and the labour leadership because they don't seem to understand how the economy they wish to govern works. Either that or they don't want to change how it works because they enjoy the power and rewards it gives them.
Besides, it's not like Starmer is giving us much else to talk about. Apart from telling us it's our patriotic duty to show deference to an outdated monarchy he seems to be keeping his head down. Probably busy filling in his questionnaire and planning his next career move.
https://twitter.com/Keir_Starmer/status/1531909299097767936?s=20&t=MjUFxFPZApjaawOq52DZ-w
Glad the difficult years are behind us.
I would personally be letting more hair down if the monarchy was scrapped and the wealth and land redistributed but to each their own.
I was probably guilty of saying Corbyn could have *appeared* a bit more patriotic way back. (Of course patriotism would be defined in looking after the most vulnerable in my world but that's not how the establishment sees it.)
But now I see these awful press pieces - it's so desperately cynical I can't believe I thought it was a good idea, at least in this way. At the expense of actually wanting to do anything half-decent for the UK at least.
As it happens, I agree with this model, but think many people vastly overplay the political advantages of espousing it. Can we have a separate thread on it?
A separate thread would be nice, along with all the countries that have successfully adopted MMT, or even attempted it in any way, shape of form.
You can't run from the internet.
A separate thread would be nice, along with all the countries that have successfully adopted MMT, or even attempted it in any way, shape of form.
Fine. Again - you don't adopt it.
It's a description of the current system.
Australia
USA
UK
Japan
Canada
New Zealand
(Not countries in EU with the EURO) - though the ECB did clearly sanction a package during covid.
Broadly
Hasn't he had to have changed his mind? I think otherwise it's treasonous isn't it? After all, he is in effect in opposition to her (government). i think it's in the rules?
Hasn’t he had to have changed his mind?
Yeah just messing.