{"id":38672,"date":"2018-10-04T07:48:07","date_gmt":"2018-10-04T12:48:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=38672"},"modified":"2018-10-04T07:48:07","modified_gmt":"2018-10-04T12:48:07","slug":"how-mainstream-economics-has-led-to-clueless-governments","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=38672","title":{"rendered":"How mainstream economics has led to clueless governments"},"content":{"rendered":"

How mainstream economics has led to clueless governments<\/a><\/h3>\n
It’s time to consider a better economic plan (Image edited by Dan Jensen)<\/span><\/figcaption><\/figure>\n
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Governments of all stripes base their policies on mainstream economics. Powerful challenges to the mainstream, especially from ecological economics and modern monetary theory, explain why we are in a hole and can\u2019t seem to get out.<\/strong><\/p>\n

If this article is largely correct, we can conclude that the economics profession is a major cause \u2013 directly or indirectly \u2013 of most modern evils.<\/p>\n

In saying that, I draw heavily on the work of Australian academic economists Professor Robert Costanza<\/a>, Associate Professor Philip Lawn<\/a>, Professor Bill Mitchell<\/a> and Dr Steven Hail<\/a>.<\/p>\n

Taken together, their work \u2013 in conjunction with colleagues overseas\u00a0\u2013 claims that mainstream economics is fundamentally wrong left, right and centre\u00a0\u2014 although I don\u2019t mean to imply that these four scholars agree on every point.<\/p>\n

Mitchell \u2013 a co-originator of modern monetary theory<\/a> (MMT) \u2013 shows that we could have full employment quickly with a job guarantee<\/a>, that federal budget deficits are normal<\/a> and desirable, that the federal government never needs to borrow money<\/a>, and that federal taxes do not fund anything<\/a>.<\/p>\n

The Federal Government should focus on non-inflationary full employment and not budget outcomes, because we can run deficits forever <\/a>without borrowing.<\/p>\n

In short, the Federal Government does not have the budget constraints of a household, business, or state government, because it can create unlimited money \u2014 but should spend prudently<\/a> to avoid inflation and ecological overshoot.<\/p>\n