But you said, that the reason why counterfeiting is illegal, is because the govt wants the funds to go to all of us, not to the criminals.

So does the govt want those funds to go to all of us or not?

But my understanding is that once you hit full employment of resources MMT tells you to back off because you’ll create excessive inflation. A couple of years ago, in 2006 and 2007 the US U3 unemployment rate was between 4 and 5 percent, within hailing distance of 2-3 % frictional unemployment, so not far from full employment of labour resources. I realize U6 is a better measure because it includes discouraged workers,etc. Nonetheless 4-5% was not a bad unemployment rate.

However things weren’t all that good for many people. Just having a job didn’t mean earning a decent income after 30 years of wage stagnation. Neither did it mean access to basic services, health care for example. Considering health care, the US devotes 6-8 points of GDP more to health than every developed country in the world, excludes 10′s of millions of people and gets worse health outcomes on average.

Say 7 percentage points of GDP: that’s 1 trillion dollars of wasted resources! One trillion dollars of people digging holes and filling them again, or in health system terms useless administration, finding ways not to pay claims, etc, etc. Those resources could be devoted to much more useful endeavours. I leave those to your imagination!

Conclusion: MMT helps reach the point of full employment of resources, an excellent result, but it doesn’t resolve many very large economic and political issues that affect people’s day to day lives.

If the world understood MMT, look at all the emperors who will have been revealed to be naked.

1. The economics department of Harvard
2. The US Treasury
3. The US Fed
4. Barak Obama
5. All those bailouts to politically connected constituencies — not needed!
6. All that money to Goldman Sachs et al. — not needed!
7. All that unemployment and waste — not needed!
8. The economics profession as a whole — has no clue!

MMT is a big proof point that the Govt has no idea what it is doing, and that flat our fraud can exist, for decades, in the nation’s “best” universities. The establishment cannot withstand such massive loss of face, so they close ranks against it. It’s like the Catholic Church, the Earth, and the Sun.

if govt wants those funds spent they want to be the ones to direct that spending.

it’s an operational control on govt spending.

The problem is, it’s exponentially harder to get someone to unlearn something they think they know about than to learn something they know they don’t know. When, for example, I link to the papers on this site in online arguements, people will mostly just read the first few paragraphs and respond back with some snide comment, and leave it at that. They just won’t engage with it, since it seems so crackpot.

So why doesn’t the government let us help the economy? Why do they punish counterfeiting?

yes, counterfeiting adds to demand. just like winning a federal lottery if that spending wasn’t ‘paid for.’

it also transfers real goods and services to the criminal that could have gone to the rest of us (if our govt knew to support demand legally).

I understand that MMT doesn’t propose solving all the world’s economic and political problems :) But my take away from much of the discussion I’ve seen is that if governments are willing to deficit spend sufficiently to satisfy the non-government sector’s desire for savings (and consistently rather than stops and starts), then unemployment would be lower than otherwise, GDP would be higher, the risk of a debt deflation would probably be gone, and just about everyone would be better off. So doesn’t “higher level of aggregate demand” supposedly translate into less human suffering?

Clearly there would be ideological losers who would put up a fight, but who loses economically from this core policy change, if it would work as advertised? (I’m still making up my mind on some details). Also I said “core” because I understand many MMT proponents have other proposals, for example changes to the banking system that would likely reduce banking profits, so of course there are probably powerful financial interests against some types of policy change.

Thanks for the reply!