Will Hutton manages to ask a good question

Implicit in this is a question rather than assertion:

What amazes the party and commentators alike is why a 78-year-old moderate stalwart such as Biden has suddenly become so audacious. After all, he backed Bill Clinton’s Third Way and was a cheerleader for fiscal responsibility under both him and Barack Obama, when the stock of federal debt was two-thirds of what it is today. Now, the debt is no longer to be a veto to delivering crucial economic and social aims.

Why that change, why no longer?

What has changed is that quantitative easing has morphed into Modern Monetary Theory, that magic money tree. Or, as older language had it, monetisation of fiscal policy. Something which does rather lead to disaster, as Venezuela and Zimbabwe have recently shown.

Yes, of course, we agree that there’s a lot of ruin in a nation but it’s not an unlimited amount, as the Great Debasement shows in our own lands.

The politicians now all agree among themselves that anything desired may be had by printing the money to gain it. Thus that’s what is being done. Which is, has been all along, our complaint about MMT. We do indeed know that within the theory there is the solution, that when inflation arises taxes do to curtail it. But that’s not how politics works - spending is much more fun than taxing. Thus spending will rise and tax will not to offset as the theory states needs to happen.

Thus why politicians both here and in the US are having such fun in spending more than they’re willing to impose in taxation. We insist that this won’t work out well.