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JamesBarney parent
If the government borrows and slack remains in the economy, standard economic theory also predicts limited effects on inflation. What about MMT is different?

The two concerns that standard economics seems to have around the government borrowing excess money is higher debt load, and crowding out.


digdugdirk
MMT likely leans heavier on both levers than you're imagining. Heavy government investment until there's no more productive capacity. Extra emphasis on the "productive" part. Picture the New Deal as a baseline, and add on whatever useful projects you can imagine.

The intuitive idea is to maximize human capital by investment in infrastructure, health, and education. Spend money in areas where the return to the country is exponentially improved over time.

As a extreme example - imagine if the government paid for high speed wireless data plans and ensured access for a poor rural community without internet access. It wouldn't be unreasonable to imagine a handful of people in that community find ways to generate income using that internet connection and therefore now are paying more in tax after year 1. At that point, it's just a math problem to argue about what should count as "value" in the equation.

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