Steve is predisposed to seeing deficit spending and claiming that it brings all these terrible things.
Now now Fernando, that’s not quite true.
Deficit spending is fine (we don’t have a choice !) as long as it’s helping the economy grow sufficiently. It’s especially ok if interest rates are low and you can maintain confidence of buyers of government bonds….or if you have to print/QE as long as it doesn’t cause inflation or significantly debase the currency
What I’ve tried to explain (and obviously failed) is that if you don’t control the deficit spending you end up having to pay a lot more interest on borrowing as the market (the buyers of gov bonds) loses confidence over the ability to repay, so expects to receive a premium (see Liz Truss) and/or you end up printing huge amounts which debases the currency and can also cause inflation. This negatively impacts a lot of people but especially the poorest. The richest own assets which appreciate in a value due to QE/global liquidity (well, until breaking point)
I’m not bright enough or know enough about the detail to fully debate MMT theory, however, I can point out the flaws of some peoples interpretation of it. The main one being ignoring the requirement for price stability for theory to work and thereby the lack of acknowledgement that printing endless amounts of money debases a currency and can cause inflation. So basically the pound or dollar in your pocket can’t buy as much as it did. It’s the biggest secret/hidden taxation there is.
I’m genuinely concerned about the amount of government/national debt in the world but maybe I’m wrong to be. Only time will tell I guess