Keith Evans
1 min readDec 29, 2020

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Money, by itself, cannot cause inflation. It is only a way of denominating our commerce and contracts, like points determine outcomes of sporting events. Real resources, including labor, and their potential availability determine their own price in the market. One could possibly extrapolate that giving everyone a million dollars would cause many prices to increase, but those would be isolated to the things that new wealth would likely buy and not an across the board increase in everything to make it consistent with the definition of “monetary” inflation.

Federal spending is most effectively administered during economic downturns, which is why automatic stabilizers, unemployment compensation, food supplements, etc, exist. Sure, they alleviate a lot of suffering and avoid social discontent, but they primarily inject “new” federal money into the economy to preserve supply chains and prevent recessions from becoming depressions as defaults on bank credit accumulate.

The political sphere recognizes this and doesn’t really want to prevent it, but it makes for good political theater, especially if voters are convinced that “they” pay for those benefits and programs with their taxes and the opposing party can be blamed. This misinformation is the biggest hurdle facing MMT advocates in their struggle for a more equitable economy and government.

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Keith Evans
Keith Evans

Written by Keith Evans

Meandering to a different drummer.

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