How in the world do you think attitudes will change to allow MMT to take a front seat in monetary policy? I just don’t see the way.
When I speak/write to most people engaging in discussion of MMT at this level I dig a lot deeper into the mechanics of our monetary system than is required to gain someone’s attention as a newcomer to economics. The first thing to start with is the fact that MMT isn’t heterodox economics, but simply a description of how the monetary system “currently” works. There is no need to change anything within the existing system to utilize MMT, and that is where people have their curiosity piqued enough to ask questions. ie: “If MMT is how it actually works why are politicians and mainstream economists so concerned about debt?” At that point one can review the differences between managing the economy v. managing a “budget”, and how much gold standard restraints still effect the thinking and politics of the nation’s leadership steeped in assumptions having their roots in defense of a gold reserve that no longer exists.
The real icebreaker of thought is “Taxes don’t pay for anything.” Once people wrap their heads around the purpose of taxation as a method of controlling currency in circulation to defend a gold reserve, not as a “revenue source”, they are primed to accept the possibility that we may just have made some errors in the transition that explain why continued attempts to “balance the budget” have not performed the predicted miracle of economic recovery. One can drive this home with the fact that “every” success in achieving the goal of balance has been followed by a depression or serious recession that can be attributed directly to private debt leveraging made necessary by a currency anemic economy. Most have no problem relating to the much higher private debt load of our economy since the early 80’s.
As for taxation of business, presumably vs taxation of people do not businesses exact a toll on our societal costs and therefore must cover those costs? Things like pollution, supporting infrastructure spending, etc?
You can’t hold the view that taxes don’t pay for anything and also express a need to tax anyone to fund a purpose. If company Z is polluting a river do you really want to defend taxation as a deterrent if it also applies to companies A-Y?. Taxation can be used to direct investments, but not behavior. Behavior must be approached by regulation and fines, even though fines have no more utility in funding spending than taxes. My thought on pollution is that fines be levied payable to the state/s affected and then remedial costs be be paid via currency creation into a superfund at the federal level. This makes the process beneficial to the people who experience damages and would garner much more support from states.
This is where you will find opposition from the left. Too many on the left are simply anti-business/wealth. They are the most likely to see anything related to capitalism as part of a grand conspiracy and their ignorance of how business works in the economy only drives a desire to punish, not to manage. Sadly, this is how most on the right view the left, as the left has made heroes out of dissidents against “the man” without application of much discretionary thought. Did you know that the owner of the Dakota Access pipeline is also one of the largest producers of wind generators in the nation? Is he a jerk? Hell yes. Is tax policy the way to curtail his jerkiness? Hell no, not if it also limits his ability to produce wind power.
But back to my main question .. how do you see MMT getting used and accepted in our economic planning?
Most Americans are very generous people who have no desire to cause anyone real harm. The right wing voters are not given enough credit for their desire to see everyone economically secure and are vilified from the left as being “mean” or “greedy” when the differences are mostly about methodology. They see anything the federal government does as inefficient and wasteful because of how they view its funding. If you believe that business creates wealth and government is a necessary, but wasteful, overhead to the economy it is only natural that their politics would lean toward austerity for the government.
Disconnecting taxation from spending in the thought processes relating to the federal government is key to promoting policies that generate prosperity. It is a heavy lift, but its certainly easier than pushing a radical remake of the economy and replacing capitalism with something having so much negative association as “socialism” or “communism”. It’s also much more user friendly than the radical left’s version of the Nuremberg trials via the tax code for anyone owning a business or who managed to accumulate any degree of wealth. If you approach funding for social programs from the perspective of having to confiscate wealth first you also incite a very well funded and potentially corrupting opposition from those who have the wealth you are targeting. Why pick that fight?
You are also going to find that you’re preaching to the wrong choir in most cases. There is no lack of support for progressive spending policy on the left, so the possibilities opened up by MMT type management of the economy naturally appeal to the left. The best way to promote this style of management is by appealing to the right via the ending of liberal/neoliberal assaults on business and wealth with taxation. It’s hardly a secret that the main beneficiaries of the myths surrounding the tax code and fiscal policy are Wall St and banks, or that they heavily favor the establishment wing of the Democratic party. If I have to choose between the agendas of the libertarian right and the neoliberal left just the foreign policy of neoliberals will make me a libertarian. We can’t continue bombing brown people for Wall St.