I earned a degree in economics, business & management.. But it doesn't matter much.
Re-reading my post, it looks like I could have written it better.
I was referring to the stimulus spending, in particular the last one or two huge packages. It might have been more efficient to not do them in the first place. At the time many economists were very concerned about the overall effects on the economy. We were already running at 5+% annualized inflation, right?
I understand the general ideas behind Modern Monetary Theory, that it looks like you and the original post are referring to. Wild spending corrected by surgical taxation...
MMT sounds great in academic papers, but it runs into problems in practice. We can't just raise taxes wherever and whenever we want. There are too many problems to list with attempting to do that, from the lobbyists, to officials wanting to get reelected, to the errors of misidentifying where the taxes are to be applied. Not to mention all the existing laws around taxing.
It's expensive to send out a bunch of money, and then tax it back... I suggest that it's more efficient to spend less. But I realize there is a fat chance of that ever happening!
Seems you're commenting more on the feasibility of surgical taxes rather than the effectiveness of them.
Which is fine; no disagreement there from me. But I'd also posit that government spending on the administrivia is a positive - it's yet another way to keep money moving and likewise keep momentum in the economy.
I guess my point is: the ideal would've been to surgically tax money out of the system, but since we can't (for all the reasons you and I both mentioned), the alternative was rates. And while I hear your point re: cutting spending, you're arguing its merits on the likelihood of it happening, not so much whether one's better than the other. And neither spending cuts nor surgical tax hikes would happen anyway, hence...
...rates. lol
tl;dr: we're saying the same thing. You're talking about which one's more feasible, I'm talking about which one would've probably been more ideal to maintain momentum.
Re-reading my post, it looks like I could have written it better.
I was referring to the stimulus spending, in particular the last one or two huge packages. It might have been more efficient to not do them in the first place. At the time many economists were very concerned about the overall effects on the economy. We were already running at 5+% annualized inflation, right?
I understand the general ideas behind Modern Monetary Theory, that it looks like you and the original post are referring to. Wild spending corrected by surgical taxation...
MMT sounds great in academic papers, but it runs into problems in practice. We can't just raise taxes wherever and whenever we want. There are too many problems to list with attempting to do that, from the lobbyists, to officials wanting to get reelected, to the errors of misidentifying where the taxes are to be applied. Not to mention all the existing laws around taxing.
It's expensive to send out a bunch of money, and then tax it back... I suggest that it's more efficient to spend less. But I realize there is a fat chance of that ever happening!