Interfluidity claims that monetarism shares more with MMT than we all think.
I think MMTers, market monetarists, and Keynesians have almost everything in common other than tribe and affiliation.
He then goes on to recommend
cyclical inflation indexed government savings account. Crazy.
When seeing these hare-brained schemes, I always wonder just what problem SRW is trying to solve. There must be some policy reason I'm not seeing for complicated, rube-goldberg, counter-productive ideas. But let's review in detail:
SRW would give people a government backed, $200,000 max, inflation indexed savings account (real rate of zero). This is meant to help people with inflation.
Fine, so US has 300M people, so assume we have a 50% usage rate of this account, so a total of $3x10^13 is going to be in this thing. I don't even know what this number is.
Saudi decides to jack up oil prices. We get cost-push inflation of, say, 7%. In Steve's world, the Government would need to print an extra $2,100,000,000,000 and pump that into savings accounts. 12 zeroes makes that a US Trillion. The US National debt is $15T.
So, because of inflation, SRW is going to print $2T, an increase of over 10% of the national debt (not deficit).
What does everyone think is going to happen to inflation now? Instead of helping people during high-inflationary periods, this will trigger hyperinflation by design.
It gets worse in periods of negative growth -- account holders will need to take haircuts. So, you guessed it, when the economy is shrinking, the Government is going to start reducing the number in people's bank accounts. Nominal outstanding debt will stay the same, of course, so you'll get debt deflation the way we did in the Depression.
I can see the middle class singing Hosannas now.
If Steve claims MMT and monetarism are the same, maybe it's because he doesn't understand the differences.