Quote:
Originally Posted by GGG
Interest rates is slow and stifles companies ability to increase production and invest in optimization as they still need to hit dividend targets and lots of debt covenants are based around LIBOR.
If your goal is to suck dollars out of the economy taxation is the fastest way to it AND instead of increasing debt servicing costs with prime rate increases you pay down debt.
Essentially if you are going to do economic damage at least pay down debt while you do it.
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That’s how MMT is supposed to work, yes.
Unfortunately, MMT was dreamed up in a world where public opinion and elections don’t exist. In an inflationary period, when voters are distressed about rising prices, few politicians looking to get elected are going to run on a campaign of increasing taxes.