MMT Will End Up In Hyperinflation
Hey Jessieconomists
As we move into these desperate times we see governments and central banks pulling out all the stops to provide a floor for the economy. Throwing money at every market trying to make sure balance sheets have cash, companies have cash, banks have cash and to an extend consumers have cash.
The idea behind all the money printing is that if people have money and companies have money when we can open up economies we can all work again and produce far more than they money that was printed and pay it back over time. The money can then be removed from the system through various tax measures and bringing back to a healthy equilibrium or so they say.
Great on paper, let's see it in practice
When it comes to economics what seems great in theory doesn't always go down well in practice as there are so many factors and nuances and room for abuse in today's system of distributing money.
A simple give and take, poking and producing the economy along isn't how you develop functioning, healthy economies that create wealth and reduce poverty.
Image source: - economist.com
The problem with MMT is giving money to people and corporations and telling them to do what they want with it doesn't mean the outcome will be what you want it to be. We've already seen what money printing does with the bailouts of 2008 and up until now.
Since the distribution of money first ends up in the hands of banks, financial institutions, hedge funds the banking industry first takes off its hefty commissions before deciding where to allocate the capital.
Asset absorption
Financial players want to make easy money and instead of allocating it to small businesses and startups who want to produce and improve sectors of the economy its dumped into asset prices.
The funds end up in places like real estate and stocks of companies that are mismanaged and arent going anywhere. The money goes there to die and be hoarded by a select few and never see the productivity returns it was intended to create.
Commodities
While money continues to inflate those with more of it feel less of the punch than those with less. While a normal household may spend 10 - 15% of their money on food and groceries for a "well off" person that is far less and they don't feel the impact of rising inflation on consumer goods the way the poor and middle class will and have to make tougher decisions over time.
There is no financial fair play
As long as there is no way to adequately disruptive capital there will be no way MMT will actually be able to make the impact it plans to have and these are all theories cooked up by Ph.D. advisors who never had to work for a penny in the real economy.
Have your say
What do you good people of STEEM think? Has corporate cronyism gone on long enough?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
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