By L. Randall Wray
This is another short post on MMT, a sort of follow-up to my post from a couple of days ago. There was an interesting response to various comments on my piece, which was posted up on Mike Norman’s website.
We got the typical: “oh you MMTers always want to consolidate the Fed and Treasury, but really the Fed is a private institution that is not a part of government”, and “in reality the Treasury cannot spend unless the Fed will allow it to spend, otherwise it must get tax revenue before it can spend”, and hence “really government spending is constrained by its revenue, just like a household or firm”.
By Michael Hoexter
General Goals and Decision Criteria for Government Fiscal Policy
In the era of climate change, a worldwide social and economic disaster, the valuation of real resources, especially atmospheric resources and energy resources must change in order for human civilization to survive. Government fiscal policy is a critical element of that change in valuation, both on the spending and the taxation side. In addition, in a planning role, government becoming the architect or co-architect of new energy, transportation and land use realities. As I have written before, making atmospheric resources or the permission to use them, a tradable commodity does not adequately and properly engage our most powerful instrument in addressing climate change and adaptation to climate change, the institutions and fiscal policy of government itself. However, government leaders are human beings with interests and varying ethical commitments to the common good of their people and humanity in general. In order to hold them accountable in their spending and taxation decisions it will help to make a part of public political discourse those criteria by which they make spending and taxation decisions. These public criteria can in turn be modified by political discussion as well as scientific measurement of the results of those policies, which then can either be refined or discarded depending on their outcomes.