It doesn't matter, and that's not a flaw with MMT, if it's true, that's a flaw with the political system.
The reason it doesn't matter, is because there are automatic stabilizers. Inflation lowers the minimum wage, it decreases the real value of the national debt, it decreases salaries, it decreases benefits, it makes exports more competitive.
So if there is inflation, there is no short term need to increase taxes, which are already wildly unpopular. --Inflation can self correct so long as the government does not increase the prices it is paying when it bids on goods and services.
This is the part everybody misses. Sure, a tax could reduce immediate inflation, but the more important part is to no explicitly increase the nominal amount being spent. Countries that experience high inflation, keep bidding higher and higher, in an effort to secure resources, that are either 1) not available, or 2) needed by the private sector to maintain basic welfare.
That's the secret. It's so simple. If you have inflation, just keep government salaries stable, don't increase benefit levels or wage floors. Eventually, inflation adjusts those back down to viable levels. Now you could try to do offsets, but once you mess with too many variables, you don't know what could happen.
It doesn't matter, and that's not a flaw with MMT, if it's true, that's a flaw with the political system.
The reason it doesn't matter, is because there are automatic stabilizers. Inflation lowers the minimum wage, it decreases the real value of the national debt, it decreases salaries, it decreases benefits, it makes exports more competitive.
So if there is inflation, there is no short term need to increase taxes, which are already wildly unpopular. --Inflation can self correct so long as the government does not increase the prices it is paying when it bids on goods and services.
This is the part everybody misses. Sure, a tax could reduce immediate inflation, but the more important part is to no explicitly increase the nominal amount being spent. Countries that experience high inflation, keep bidding higher and higher, in an effort to secure resources, that are either 1) not available, or 2) needed by the private sector to maintain basic welfare.
That's the secret. It's so simple. If you have inflation, just keep government salaries stable, don't increase benefit levels or wage floors. Eventually, inflation adjusts those back down to viable levels. Now you could try to do offsets, but once you mess with too many variables, you don't know what could happen.
But Marxists will! :-)