"The MMT perspective makes theoretical sense, but this doesn’t mean we should be in a hurry to implement a new economic framework."
When I see this statement I immediately know that it is from someone who (a) doesn't actually understand macro-econ, or (b) is shilling for status quo economists and the Wall St banks that fund most of them.
MMT is not something we need to "implement". It is how the major economic powers of the world work now. It is our everyday reality, albeit greatly perverted by the existing power structure behind it all. How well an economy works for the people is not simply about how much money is created, but about leadership that is knowledgeable and honest, or ignorant and corrupt. Either is, as we already see, possible with any economic system.
"Additionally, MMT gives the important role of managing inflation to elected officials. Do we really want to watch Congress argue over something so important, and use it as a bargaining chip?"
Who, exactly, do you believe controls the pursestrings now? Here's a clue: According to the Constitution it starts with a C and ends with ss. It also "mandates" that the nation's currency be created for "the public welfare" and not for the wealthy to "trickle down" as much as they see fit. Yes, in spite of much current rhetoric, our founders were more in line with socialism than capitalism. This is hardly surprising since the capitalism of the day was what they were revolting against.
"Inflation hasn’t been an issue in quite some time, but don’t forget that in the 1980s it was well over 10%, which forced interest rates up to nearly 20%, and caused years of high unemployment rates."
Let's also not forget that we were facing extreme price increases in petroleum and that our entire economy was dependent upon it. Creating money to allow people and companies to purchase the oil they needed was hardly negotiable.
The interest rate increases were a mistaken attempt to slow an economy that became overheated once the oil supply was stabilized. Volcker sold the concept to a staunchly anti-tax Reagan as the only way to curb inflation by creating a "controlled" recession.
Bond interest is just another way to inject money into the private sector, so it is a marginal, at best, tool to fight inflation. Most MMT economists that I know believe that the accepted theories around inflation and interest are actually backward because they force higher costs on consumers and business alike.
We also shouldn't ignore the fact that involuntary unemployment is a known result of higher interest while and that the methods of computing unemployment were considerably different than they are now. Even pre-pandemic we were well above 10% if we used the same methodoloy as was in use in the '80s. There is also the moral question about how destroying lives intentionally to satisfy a numerical goal with no real purpose is "for the common welfare".
"Concerningly, there has been little discussion about the other half of the equation, making sure that all this new money doesn’t result in the 1980s all over again."
You admitted that inflation is caused by scarce goods, not money. Should we simply stop bailing out the working class because it "might" cause some prices to rise? Those prices will rise anyway and little can be done about it as long as demand exceeds supply. If we were talking about luxury items I could see some justification, but inflation isn't selective and will hit necessities as well. I wouldn't want to be the one to tell the people that we can't "afford" to supply them with food and shelter because some number crunchers at the CBO think it "might" cause another percent of inflation.
