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MMT Verify: How We Can Staff the NHS Without Tax Rises

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Summary

This article discusses the deficit myth propagated by Jonathan Portes, which states that it is economically unfeasible to increase the NHS workforce by one million without raising taxes. The article then explains the Modern Monetary Theory (MMT) position on this issue, which is that government spending does not necessarily require an increase in taxes. The article outlines the process of exogenous pricing, which is when the government sets a price and advertises jobs which are filled regardless of the market forces of supply and demand. It then explains that when the government hires people away from the private sector, the economic effect of taxation is created. The article concludes by explaining that deficit spending has a lower inflationary impact than tax-matched spending, and that government has more than just the taxation tool in its toolbox.

Q&As

What is the impact of exogenous pricing on the mainstream economic assumption?
The impact of exogenous pricing on the mainstream economic assumption is that it contradicts the assumption that a mystical auction determines prices solely by market forces.

What is the economic effect of the government hiring away from the private sector?
The economic effect of the government hiring away from the private sector is taxation, as the private sector now has fewer workers and lower capacity.

How does the deficit change when there is additional government spending?
When there is additional government spending, the deficit increases.

What is the difference between "deficit spending" and "tax-matched" spending?
The difference between "deficit spending" and "tax-matched" spending is that deficit spending has a lower inflationary impact than tax-matched spending.

What other tools does the government have in its toolbox besides taxation?
The government has other tools in its toolbox besides taxation, such as transferring private medicine to the public sector and reasserting the founding principle of the NHS.

AI Comments

👍 This article does an excellent job explaining the concept of MMT and how it can be used to staff the NHS without tax rises.

👎 This article is overly long and could have been condensed for easier reading.

AI Discussion

Me: It's about how we can staff the NHS without tax increases using the Modern Monetary Theory (MMT) approach. It goes into the details of how the government can use this approach to hire and pay for staff without raising taxes.

Friend: Interesting. What are the implications of this article?

Me: Well, the article basically suggests that the government can hire people away from the private sector to staff the NHS without raising taxes. This would mean that the private sector would have fewer workers and lower capacity. The article also discusses how the government can use deficits to fund the additional staffing. It suggests that when the government runs out of things to buy at its stated price, the spending stops, so there's no need to raise taxes. Additionally, it explains how the deficit would be affected by consumption and taxation. It states that the more cycles of consumption in the spending chain, the higher the demand and the lower the deficit. Finally, the article suggests that government has more options than just taxation to fund the additional staffing.

Action items

Research the original ‘full-funding rule’ document and the Bank of England regime to understand how it has impacted ordinary mortgage and rent payers.
Join the New Wayland community on Discord to discuss MMT topics and other economic disinformation.
Explore the concept of ‘exogenous pricing’ and how it differs from mainstream economics’ assumption of a mystical auction determining prices solely by market forces.

Technical terms

MMT: Modern Monetary Theory
Deficit Myth: The belief that government deficits are always bad and should be avoided.
Exogenous Pricing: The process of setting prices for goods and services by the government.
Post-Keynesian Pricing Theory: A theory that suggests firms are unlikely to raise prices in response to government action.
PAYE: Pay As You Earn, a system of taxation in the UK.
VAT: Value Added Tax, a type of sales tax.
Corporation Tax: A tax on the profits of companies.
Deficit Spending: A change in government spending matched mainly by an increase in the deficit.