Remarkl
1 min readJun 4, 2022

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I have a theory that says that taxes don’t exist to fund the state since the state is already widely funded with money printing. According to my theory, taxes, in fact, exist to prevent people from consuming too much. But that’s a whole other story.

"Your" theory is called Modern Monetary Theory these days. It is, indeed, a whole other story, except that MMT recognizes inflation as the only true object of monetary and fiscal policy. "My" theory is that we use other bogeys because the key determinant of inflation - the output gap - is too difficult to measure.

Otherwise, you are correct. Inflation happens when too much money chases too few goods. That can happen when there is too much money created, and it can happen when supply is curtailed. That said, it's not clear that exacerbating inflation during a pandemic was worse than allowing people to starve or be evicted. The pandemic was going to have economic fall-out. Fewer people were going to have access to stuff. Maximizing the number of people with access to necessities in an emergency may demand an inflationary policy. If so, so be it.

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Remarkl
Remarkl

Written by Remarkl

Self-description is not privileged.

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