Pure MMT

Pure ‘hawk’: “I judge that it is appropriate to continue to remove monetary policy accommodation (RAISE RATES) gradually.” New York Fed president William Dudley

Pure ‘dove’: “If we go too far in our zeal to normalize (RAISE RATES) we might push inflation expectations down further and that might hinder our ability to hit our target.” St Louis Fed president James Bullard

Pure ‘moderate’: Others were more on board with the December rate increase, though they also offered some skepticism. Atlanta Fed president Raphael Bostic, the newest of the 12 Fed presidents, believes the US central bank should (RAISE RATES) by the end of the year, though he is “not wedded” to that position and continues to track the data closely. Robert Kaplan, chief of the Dallas Fed said inflation “is likely building” given the low unemployment rate, which would make the case for further hikes (RAISE RATES).

‘Pure’ MMT is the day when all fiscal policymakers talk like this too. All that fiscal policymakers need to do is to take the above thought processes and replace ‘raise rates’ with ‘INCREASE SPENDING‘…

Rather than clinging to the old-outdated-idiosyncrasies from a bygone debt-denominated-in-gold-backed-dollars era (like the amount of the quote-US-National-Debt-unquote), the main determinate of fiscal policymaking decisions in our modern monetary system (where there is no such thing as the US federal gov’t, a monetary sovereign, being in debt of their own fiat US dollars) should be inflation expectations (same as in all monetary policymaking thought processes and decisions)…

In a perfect (‘pure’) MMT world, all the households, businesses, local & state gov’t, any ‘user of currency’, is concentrating on balancing their budget (to maintain prosperity); while all federal monetary policymakers, all federal fiscal policymakers, any ‘issuer of currency’, is concentrating on balancing their economy (to widen that prosperity).

 

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