A chunk of your argument here basically rests on the idea that a total confidence collapse in the US bond market - something I depicted as an in extremis example of the costs of unchecked issuance - literally cannot happen. First of all, that’s an assumption, not a fact, and I think we just established that it’s better to avoid making too many of those.
Second, regardless of whether that extreme possibility can occur, along the road to getting there you can still end up with a lack of confidence pushing yields higher and higher, which in turn requires ever increasing amounts of currency printing to service those yields, which further pushes yields higher and so on. Even if you’re somehow right that the US bond market can never ever seize up like it has in Russia, you can still end up in a money printing spiral.
Which brings us back to the core question of what possible downsides there are to printing infinite money. Here you have, apparently and bizarrely, presumed that my acknowledgement that the connection between currency issuance and inflation is not simple or direct as an agreement that no connection exists at all. I’m not aware of any theory of economics which supports this assertion.
Under MMT - which appears to be what you’re relying on - taxation is necessary as a deflationary measure, because it is the act of removing currency from circulation. In order for that to be true, it must follow that putting currency into circulation is, to a greater or lesser degree depending on circumstance, an inflationary measure. Otherwise you have a scale that can only ever tip one way.
A chunk of your argument here basically rests on the idea that a total confidence collapse in the US bond market - something I depicted as an in extremis example of the costs of unchecked issuance - literally cannot happen. First of all, that’s an assumption, not a fact, and I think we just established that it’s better to avoid making too many of those.
Second, regardless of whether that extreme possibility can occur, along the road to getting there you can still end up with a lack of confidence pushing yields higher and higher, which in turn requires ever increasing amounts of currency printing to service those yields, which further pushes yields higher and so on. Even if you’re somehow right that the US bond market can never ever seize up like it has in Russia, you can still end up in a money printing spiral.
Which brings us back to the core question of what possible downsides there are to printing infinite money. Here you have, apparently and bizarrely, presumed that my acknowledgement that the connection between currency issuance and inflation is not simple or direct as an agreement that no connection exists at all. I’m not aware of any theory of economics which supports this assertion.
Under MMT - which appears to be what you’re relying on - taxation is necessary as a deflationary measure, because it is the act of removing currency from circulation. In order for that to be true, it must follow that putting currency into circulation is, to a greater or lesser degree depending on circumstance, an inflationary measure. Otherwise you have a scale that can only ever tip one way.