By Thornton Parker
Discussions on this forum generally treat MMT in isolation rather than in the context of other forces that drive an economy. In Japan, for example, the sales tax increase to reduce the government’s deficit is widely seen as a recent cause of its lagging economy. But a bit of history shows a different picture.
At the end of World War II, the country was decimated. Many of its young men were dead; its industries and cities were in ruins; its people were humiliated and overwhelmed by two atomic bombs; even its religion was repudiated. An island nation, it had no local friends, little fuel, and almost no raw materials. The only thing it was rich in was poor people.
Most western economists believed it was destined to remain a basket case indefinitely. But the Japanese rejected that assessment, saying if that was what conventional economics predicted, they would invent their own economics. And they did just that.
Piketty’s Wikipedia page says that he’s a Keynesian. Well, I don’t see it at all. His book contains a section on the public debt in historical perspective and it is desperately misinformed.
