I am a 62-year-old teacher of maths and science, who finds economics quite dull. Tax returns fill me with dread, and until recently, I didn’t really know what “fiscal” meant, nor why politicians banged on about “tax and spend”, what causes inflation, and why it is so bad.
But like most people on the planet, I have an opinion about much of what I didn’t really understand. Why can’t the government build a new hospital? Are benefits (Social Security) the best way to help the unemployed? Has the economy always been this bad?
One of the great things about being older than the average person, is the accumulation of experience, the ability to recognise more patterns and join the dots together, and not to accept the first explanation you are given. Over the years (decades actually) some of the issues I pondered included:
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- Why as a young man, I could afford to rent a room in a house, run a car, and go abroad on holiday, but as a wage earner, it feels more difficult to do so?
- In the 1970s, why did I not give the cost of a train journey a second thought, but now they often cost more than taking a taxi?
- Why can’t we create jobs for a thousand street cleaners?
- How does the country accumulate wealth? We can’t all rely on foreign sales? Bank loans — they have to be paid back (plus interest). Manufacturing — doesn’t that just move existing money around?
- Why doesn’t the government build affordable housing? Any money it spends is “invested” in bricks and mortar?
- If privatisation promises lower prices through competition, why does it often result in lower wages, poorer working conditions, and bigger profits?
- Does the government printing money always result in inflation?
Then last year in Summer 2022, I discovered Modern Money Theory (MMT) and read Stephanie Kelton’s book, “The Deficit Myth”. As they say, it resonated with me. And now I understand why taxes do not pay for government spending, and that full employment is attainable and addresses the jobs deficit. MMT should be important to everyone, so here we are.