MMT 101: The answer to inflation is TAXATION

Count on it. It is one of the critical tenets of Modern Monetary Theory, the disastrous economic philosophy which seems to have been adopted wholesale by the current administration.

And what's not to love about MMT if you're a politician? Several ivory tower economists endorse MMT  with straight faces, so politicians have the cover of "experts".

The theory states, in a nutshell, that government spending and government debt is not an issue for any government that operates its own currency's printing press. Simply spend all the money you want, then create the dollars to pay for it - no problem! Debt is too high? Why should that be a concern? Just print it out of existence! Poof! So easy! 

Oh, and if inflation becomes a problem (highly unlikely) you simply mop up the excess liquidity with taxation. But never mind about that highly unlikely eventuality. Let's focus on all the new and exciting spending we can do! 

Oh wait.

Now that inflation is undeniably rearing its ugly head and can't be ignored, what's the answer, according to those who created it? MMT states that higher taxes are the answer. That is why the hotly debated "Inflation Reduction Bill" is primarily a tax bill. It will raise taxes and federal revenues  to the tune of about $304 billion, costing the economy about 30,000 jobs and reducing GDP by 0.1%  Wages will go down as well. But what about raising taxes in a recession? Isn't that a bad idea? Just redefine recession! This is fine.

Keep in mind, this could be only the beginning. If this bill passes, and if the administration does not see the abject failures of MMT and course correct, more tax increases are all but inevitable. Those are some pretty big "Ifs."

Have you noticed that most bills that come out of Washington are ironically named? So what will the Inflation Reduction Act really do? 

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