Was MMT Right About Inflation? | Stephanie Kelton (The Deficit Myth) 

Here's the thing though, the progressive politicians around the world were pushing the pandemic hysteria. Therefore, they were most responsible for the supply chain issues. I agree with here about the corporations. That's why oil companies were having record profits during the pandemic, because they were trying to hide price gouging in inflation. But again, it's because of progressive hysteria over the so called pandemic, that caused inflation. In addition to that, the pandemic lockdowns, destroyed hundreds of thousands of small businesses in the U.S.

The problem with discussions of inflation is that people are not taking into account how monopolize the US economy has become. Ronald Reagan stopped enforcing the Federal antitrust laws 50 years ago. Every major industry in the United States has add a steadily decrease in number of corporations participating. There are the maximum of four or five players in every major industry. This sort of consolidation allows price-fixing without any actual communication between the companies. When inflation was first announced after the onset of the covid pandemic, I looked up what was happening with corporate profits. Corporate profits were rising steadily. That is when I knew now what they were calling inflation was not actually inflation. Inflation occurs when the cost of producing goods rises so the price for the finished good has to increase as well. But if profits are soaring, clearly the cost of producing the good is not increasing. So it look like most companies were using the excuse of the pandemic to increase prices. There is no effective competition to prevent this.

At least she places inflation solely on the back of the Democrats and Joe Biden. If you are still talking about healthcare then you are talking about the complete failure of Obamacare.

I feel safe knowing that you are not. Rflol

@@phil20_20 you say that now.

@@phil20_20 You sound like a turkey wishing for Thanks Giving. 😂

The reason why the US has over 800 overseas military bases is to enforce the World Reserve Currency status of the USD$ Without this, the MMT fails terribly...you can't just consume more than you produce. Fact of physics! The only way this is possible is through "Proof of Violence or War". Look what's happening as of 20240520 - China is rapidly dedollarizing (not buying any more US T-bills) and Russia was forced out by the US., and OPEC+ is trading oil with their own currencies. More nations will follow and the US Military is now actively threatening numerous nations at the same time...really dumb...the solution: back off and let nations have self determination and sovereignty, and move to a Bitcoin standard ASAP.

How do you know it was the deficit spending that caused it?

All money has been created out of nothing by governments and private banks since the year dot. Should they all be apologising too?

She used to be skeptical and investigated to debunk it before becoming it’s champion according to Mosler.

MMT is a description , it isnt a policy , i just describes the plumbing , reserve adds / reserve drains etc

@@Phil_D_Waller The problem is that in reality no government is willing to raise taxes for fear of losing voter support. Therefore, the government will use inflation to deal with the debt/deficit. Printing more and more money increases asset prices which greatly benefit the top-tier wealthy people. Thus the wealth gap has widened tremendously in the recent years.

@@IKTGWIW Thats the thing , taxes are already an automatic stabiliser . No one is saying inifinite money creation, they are saying that we have the ability to create an economy for all , not for a few. I really dont know where this all got lost tbh. If sticking a few extra quid in peoples pockets to help them pay back huge debt, pay off bills, rents , mortgages etc or we could just continue to cripple people with debt and expect a booming economy with a lack of aggr demand , i dont know how you reconcile those two. thats why european countries economies are stagnating.

@@Phil_D_Waller The problem is no government will follow MMT properly. Money printing inflates asset prices and massively enriches the top-tier rich peoples while inflation causes more hardship for the middle-class and poor. The wealth gap has widen tremendously since the introduction of QE.

...then the asset holders demand extra profit from real goods and services as rents and dividends based on the inflated values- that's how it manifests in the CPI.

*the so called deficit would only inflate assests is it was spent on those assets (eg housing) to bid up their prices. Which happens.

Right! Thanks mate🤜

Yes, high inflation + no extra government investment. Truly the worst of both worlds.

same in the UK. Austerity already very visibly fucked us over after one financial crisis, and now everyones talking like doing the same thing again is the only possible solution to this new crisis.

What happened in Germany

Feel the same 😱😭🇩🇪especially since Germany IS de facto souveteIgn enough, despite the EZB, since it has a major weight

​@001sander2 they gave up their monetary sovereignty and now use the Euro

Absolutely! She just asserts and asserts ideas and her main support seems to be that politicians love to spend money to accomplish their noble and righteous objectives so it is all good.

Just listen to the austrian school economists, they've completely debunked MMT

@@RaRd8z It appears that the Austrians are debunked by MMT.

​@@livingmombirth4005 With what statements do you have a problem/would like to see her pushed?

​@@RaRd8z Can you name me an austrain school economist that debunked it, their approch to taxes hasnt seemed to have workered very well in modern times.

The United States don’t balance budgets mate.. where is the evidence for that 😂🤣

@@psychocybernetics1347 The continued solvency of most of our states? Most States in The United States balance their budgets most years. There can be a small deficit some years as long as there is a surplus next year. But the point is: for state governments, they can't just print money like The Federal Government can get The Federal Reserve to do for them. At best, they can get grants from The Federal Government, through their representatives.

​@@psychocybernetics1347The federal government balances the economy not the books. He's not wrong saying the equivalent of states balancing their budgets, known as currency users.

MMT is the only school of economic thought which directly identifies the source of the price level: the prices government is willing to pay when it spends. All other schools can do is discuss relative prices. The source of the price level does not fully define the full prices of 'things' but acts as a base case for analysis. Sam Levey has mathematically modelled this point successfully.

Did you not watch the video? She plainly discussed this and cited empirical analysis.

Huh? she clearly stated stimulus packages have had an impact. There's just many factors involved. Plenty countries without (major) stimulus packages still suffered inflation spikes, and much higher than the U.S.

@@ericdane7769 If they were stimulus packages - that clearly implies post pandemic or during the pandemic. However the Professor claims the inflation was in place prior to the pandemic. Which, in turn, clearly negates the supply side inflation cause - as if the inflation was there before the pandemic there were no supply side effects in operation at that time. Yet Prof Kelton clearly sheets the blame of the inflation to supply side - however before the pandemic these supply side effects were not in place. But clearly yourself (ericdane) cannot comprehend this basic concept.

@@jacksonwinter5110 Yes I did. But you failed English comprehension 101. Her explanation is the whole point of my reply. She emphatically claims that the inflation was in place prior to the pandemic - yet she sheets the blame to supply side inflation. Therefore if the inflation was there prior to the pandemic (before the stimulus packages) there was no supply effects at that time - so this a clear contradiction to her analysis. So at least try and understand before you make stupid comments.

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Narnia. Nobody was happy in Argentina with low unemployment and 200% annual inflation.

​@@LordSesshakuArgentina has a weak economy full of oligopolies in each sector. Companies basically set prices at will, while the people with money just exchange any pretty cash for a foreign currency (dollars), and that's a recipe for debacle.

Did you watch moments after that where she cited central bank analysis on how much the stimulus is likely to have contributed to inflation?

The government now issues a trillion in debt but only gets a increase in gdp of half that amount. I have a difficult time figuring how this works other than a huge increase in inflation.

She said she trusted the numbers Central banks released previously, which, fair lol

​@gregbrauch not all govt spending ends up circulating and contributing to inflation. Some of its saved, not spent.

She literally says she didn't do the research herself, the central bank did, and she trusts them. And they said it contributed very little, much less than what he was suggesting. She's sharp and experienced.

As a rare fiscal conservative democrat, I think that Obama left us with a path out of the debt trap by reducing the deficit to a reasonable amount. Unfortunately, the Trump tax cuts blew up the deficit and Biden didn't increase revenue much and increased spending substantially. I currently don't see a path or candidate that provides a viable future. Sigh!

Deflation only occurs when there is overproduction. Production would need to explode and that is not likely with geopolitical, climate and demography problems. Although there is deflation in china because europe can't buy enough of their stuff.

no

There is no competition in the American marketplace. Ronald Reagan stopped enforcing Federal antitrust law. Every industry has been monopolized to the point where there are only three or four large corporation dominating every industry. They don't even have to talk to each other to coordinate pricing.

We wish!

@@Madronaxyz Yup!

YES, yes, yes. You understand.

Just need to keep promoting the message

Thank you Sam

Thanks samkonto!

Exactly - Government creates debt and passes it on to the public because government is net borrower of the public's money - taxation and deficit spending and more of that tax to pay for the debt.

You are right that I would have loved to talk to her more about the effects of QE. Most research indicates it contributed only a little to inflation because it created money,(reserves) that could only be spent on financial assets, potentially contributing to asset price inflation.

Indeed...the reason why the US has over 800 overseas military bases is to enforce the World Reserve Currency status of the USD$ Without this, the MMT fails terribly...you can't just consume more than you produce. Fact of physics! The only way this is possible is through "Proof of Violence or War". Look what's happening as of 20240520 - China is rapidly dedollarizing (not buying any more US T-bills) and Russia was forced out by the US. More nations will follow and the US Military is now actively threatening numerous nations at the same time...really dumb...the solution: back off and let nations have self determination and sovereignty, and move to a Bitcoin standard ASAP.

Not sarcasm, it is actually impressive to me when people realize that bc i see so many people who seem have formed views on that based on fears aroubd money alone.

What kind of assumptions?

What was your view on covid inflation?

I thought pumping money into the system from the stimulus would just devalue the currency, but it's more complicated than that

@@therationalist234 it does, ideally, devalue the currency, which is one of the reasons for inflation. The problem is people only use their sides talking points, which is why things will never be solved. One side says money printing causes inflation, no more no less, the other side said corporate greed, just stop them and fix inflation, when in reality there’s a lot of nuance. Many different factors cause inflation, and it’s not necessarily an easy fix, especially with how us Americans are accustomed to a certain lifestyle, and our govt. is addicted to “printing money.” I also find it funny that people talk about corporate greed like it’s something new. I’m like, ok so they just barely started being greedy?

3. Price gouging doesn't lose market share in monopolies/oligopolies. Look at companies where corporate profits massively increased. Saw one food wholesale that increased 7 fold. 4b. Reagan/Volcker would disagree that rate hikes can break inflation.

Agreed! good comments.

@@tradeprosper5002 all companies maximize their profits through pricing. What is "gouging"? Apple is the worst "gouger" of them all. That simply means they have the highest margins. The point is "inflation" happens when prices go up. You can call it "gouging" or "inflation" or whatever, but its all the same.

​@@Bradm027 With apple there is a choice, people choose to buy from them for crazy prices. In an oligopoly, there are a couple companies who control the market. They all kind of realize that they can all collectively raise prices. If you have 4 people its easy to get all of them to do something, this becomes much harder the more people there are. One case of this is with airline junk fees. Another example is meat processing, like 4 companies control 80% of the market. If one of them raises prices, there literally isn't enough capacity that exists for all of their customers to change to their competitors (because their competitors do not have that much excess capacity). And building a factory takes years, and even longer with covid supply disruptions. Vs. if there were more players, then you wouldn't control 20% of the market in the first place, so your customers could all go somewhere else, which keeps prices low. So if you have relatively few competitors, you are much more comfortable raising prices because there is literally nowhere else for customers to go. Inflation is when prices go up, but why are they going up? Is it because you have no competition so you can charge more, anti-trust laws exist for this very reason. It is a market distortion and unhealthy.

@@Bradm027 Why would inflation and gouging be equivalent? By definition, gouging is when prices are raised beyond the inflation levels of a given industry. There is empirical evidence which suggests that plenty of star firms have taken advantage of COVID-related supply shocks in order to gouge prices.

It would make my day to have a federal reserve board lackey debat Peter Schiff On MMT, gold, and who will pay for ssi and 34t usa debt at intrest.

Unfortunately #1 is outside the ability of our political system, its too easy to spend more and too hard to go the other way.

Thank you so much. Very happy to hear that

@@MoneyMacroTalks How is it that you only reply to those who flatter you? It is so revealing of your thoughts.

@@Rob-fx2dw I am also happy to reply to constructive criticism. But, I indeed tend to ignore negative comments that don't contain any arguments or are rudely formulated. This comment policy has been inspired by the academic tradition in the Netherlands where criticism is encouraged, but only it it is constructive.

@@MoneyMacroTalks I asked simple straight question. You have not replied to it. You say ypu are happy to reply to constructive criticism but who decides what is constructive ? You or some independent body? Isn't that rather arrogant if it is you by pretending your motives are morally superior ?

@@Rob-fx2dw i should add. Sometimes I simply miss a question. I'm only human

Yes absolutely. Without the stimulus there would likely have been a contraction of goods and money. So, in that case you would expect more stable prices. But, a very deep recession.

@@MoneyMacroTalks but this is talking about two extremes right? Is there no stable middle ground? Would the system always run into one of those extremes or it is clear in hindsight that the stimulus was too large and it should have been smaller/slower delivered?

@@wilhelmvanbabbenburg8443 I mean you're implicitly assuming that these are both extremes - you need to ask if the stimulus is an 'extreme' before asking this question. At 16:10 "the $1.9 trillion package probably added 0.3% (ppt) to the inflation", which seems to indicate it was not a very extreme approach.

@@weirdblackcat true... My definition of extreme was a little lose... But 'strong' increase of inflation due to a 'small' impulse sounds still like the impulse was not small. By extreme I meant the state of recession (if nothing is done) or high inflation (if a stimulus is given)... I guess this shows the complex dynamics of an economy 😂

@@weirdblackcat she side stepped the question there with that answer, his question wasn't how much affect did Biden's spending package increase inflation, it was how much did the fiscal spending as a whole lead to inflation. either she consciously lied by omission or didn't understand his question. but there were many times that she didn't really answer his questions and answered a different question that was never asked. she came off negatively to me

Yeah, it's gone up every month since the interview.

@@surreal6643 During the pandemic, the US had a peak MoM inflation rate of over 9%. The current rate of inflation is nowhere near that and around ~3.3% which is above pre-pandemic levels but way below pandemic levels, and prices will never come back down, no matter what, because while you would ideally run your economy at exactly 0% inflation, you have to overshoot slightly because deflation is actually super destructive to your economy, so you have to avoid it as much as possible.

@@_yonas 2 years AFTER the pandemic it was 9%. It's now at 3.4% and the last time it was that high before the pandemic was in 2011.

@@_yonas And don't forget in the year 2021, Joe Biden said "it is going to pop up a little bit and then go back down. No one is talking about his great... great... great... big. y'know." Which means they were wrong this entire time.

@@surreal6643 The rate at which prices rise might have slowed down, but prices are still much higher than before the pandemic. All the mainstream "economists" said that inflation is transitory, that it's mostly a supply issue due to lockdowns and the Russian war. If it were a supply issue, prices would have come down to levels before the pandemic since most supply issues have been solved. What also happened since 2020? Governments printed a lot of money and continue to operate with budget deficits which means more money printing, more inflation..

maybe maybe not.. most economist give the impression they know what they are talking about but you could easily find 100 economist who would argue she is completely off base with your analysis.. so the question is what good are economist.. the answer.. no good

Or even 2.5% interest for a PCE of 2.5% extending indefinitely, maybe. As you mention, there is some expendable income to be had from the interest rate.

No one claimed we had deflation. If inflation hit zero prices wouldn't go back.

Do you even know what inflation is?

Did companies make record profits from price hiking ?!

That would require deflation which is generally considered to be bad

I am very happy to hear that!

shes a mental patient...

The Wealth of Nations by Adam Smith

Savers officially subsidized financial markets in the 1980’s with the accords that were negotiated by so called conservatives….. workers do best right before the Wall Street rugpulls

the entirety of the economy is run for the benefit of the rich. ironically to your beliefs, it is actually investment in non profitable ventures, like mass housing or free/affordable child care which benefit real human beings. the profit incentive and a profit based economic model bars this from happening

@@hajihajiwa agreed but these things are not free and must be paid for. They should at least be able to cover their investment cost and operating cost.

No need to worry about boondoggles because we all know the the US federal government is incredibly capable at making sure that the money that they allocate goes to only the most worthiest of causes that will ensure the well being and prosperity of the economy, the country and the ordinary citizen.

This is all very high level and well above any understanding I have of economics, after all I'm just a Plasterer but thank you for doing this work it let's the cogs in my brain turn and try to understand

Ok so this is kind of addressed towards the end but not about zombie companies and why if low interest rates are good we've had such an uncompetitive country vs the USA. I can't agree that Liz truss and the gilt crisis was down to a.lack of resolve I think it was clearly borrowing to allow for tax cuts, this doesn't in my eyes go against what she's saying but actually agrees with it in that earlier she was talking about the need for good management essentially and this was a bit of a banana Republic way of thinking. So if I'm following correctly how does this.line up with the idea that in say the uk the bank of England doesn't need to be independent, I mean it wasn't unto the 90s as far as I know.

I think you should keep in mind people like her don't seem to consider profits to be an important part of the equation in assessing the economy. Just "spending." Efficiency altogether gets kind of squeezed out of their discussions.

It does Not matter if a country has no foreign debts because it's money will continue to fall in purchasing power if too much is created to fund governrment spending. What will happen is the price of imports will continue to rise (like the price of local goods) due to the increasingly adverse exchange rate when the economy has more money nut no more goods to match.

@@Rob-fx2dw unfortunately prices of goods and services will rise regardless if the currency is in a state of inflation or deflation, inflation is just a easy scape goat for justifying price increases because under capitalism line must go up (personally if you think the government creating money increases in prices you must also believe there is a fucking Jewish cabal running everything) If you want evidence look at the Yen which has been under a state of deflation for 25 years and prices have only increased during that time, also your forgetting or ignorant of the role taxes which is to control inflation.

⁠​⁠@@Iandar1money “printing” will lead to inflation. It’s not the only component, but it is a big piece of the puzzle. The market wants deflation, the fed wants inflation. And inflation is a tax in itself.

Yes. But Capital accs can also cause bankrupcy, not only the public sector.

She’s referencing consumer confidence which has returned to normal rates.

@@joshuamendez9959 Confidence does not equal reality.

@@joshuamendez9959 No, it hasn't. It's almost back to the point it was when covid hit. And I mean at the end of the shutdown. When it dropped down below 90.

Exactly and makes sure that buying a house while being just an average citizen and family man becomes nearly impossible. The American dream dies with all of these shenanigans. It is interesting to me that even the founding fathers like Benjamin Franklin (who did literally print currency) knew exactly the relationship between creating too much currency and inflation. This stuff is not rocket science. Obfuscating the truth only helps those trying to get power and money temporarily that then the successful powermongers always go too far and we all suffer.

Very sharp observations. I really wanted to get into private bank money creation at the end. However, we were almost at the end of the agreed upon time and so I chose to give a nod to my hosts (being in the UK) and therefore opted to talk about the UK Gilt crisis instead. Didn't we mention Ukraine at all? I thought it was mentioned... otherwise I think it was implied as 'other shocks.'

Yes, overall I thought she made a lot of sense and I learned a lot, up until she started talking about how the Fed raising interest rates doesn't slow the economy (around the 45-minute mark). That part I disagree with. Also, the policy recommendations where the CBO and Congress would control inflation instead of the Fed doesn't make much sense to me. Congress moves too slowly, is too political, and the fiscal tools are a lot blunter and more imprecise. Monetary/credit policy may not always work, depending on the situation, but it's a lot quicker, more precise and more flexible than trying to pass legislation through Congress. Also, in some extreme situations, fiscal policy will work better than monetary/credit policy but sometimes, fiscal policy won't work and monetary/credit policy will. Different tools for different situations. Anyway, great interview and it was very nice of her to sit down with you for an hour, so thanks to her.

With all due respect, but it'd be questionable in terms of what you've read if you're making the argument that MMT leaves out bank money creation. Description of the monetary system, including banks, is up front and center of MMT's analysis. One of it's major proponents, Randall Wray, was a student of Minsky, co-authored the Macroeconomics text book and there's a whole chapter dedicated to the banking sector.

@@bradleywalsh8571 that could be for sure. But, it isn't talked about much in Kelton's book. So, I would have loved to talk about it with her.. Maybe next time

They can't go over everything you want lmao they touched on a lot here.

Yep, this immigration phenomenon is happening all over Europe and there are some people who still deny it.

i love this point because the answer is so simple in common sense but impossible under a profit based economic model. in a sane world, you simply build more houses and expand public transit in a smartly planned way which incorporates the new communities into existing local economies. this is however incongruent with profit, it is not profitable to build smartly planned cities which are economic drivers long term because they hurt short term profit and because migrants are poor, thus undeserving on anything in todays neoliberal global economy

​@hajihajiwa and thus we need social governmental investments in people, that still allow them to be free.

You are not moving the influence, you simple realise where the influence have been all the time. It is like saying that the theory on gravity stopped us from being able to jump and not fall back down, it simply explained why you fall back down. But I might have misunderstood what you meant, if so mb

I see the issue (which remains unsolved in all other economic schools) with taxation. MMT recognises that taxation reduces the money supply and cools down inflation. Via fiscal policies, the poor and the working class (should?) benefit more than the rich. But over a longer period, these benefits crawl up to the land/productive asset owners. Unless we have a working mechanism of taxing the rich effectively (be it land, wealth, or other taxes), in the long term the rich will always benefit from inflation and hurt the working and "middle" class. Fiscal policies and cash handouts, without a tax mechanism to give those at the top a periodic haircut, will always remain a temporary survival solution to barely keep the people from revolting. This is not a statement against government spending, but a statement FOR better taxation mechanisms.

I dont disagree with those things.... how about interest rates... as too cheap money (Some argue previous some administrations deliberate gave that knowing it would flow to richest group) allows buying more assets while banks as gatekeepers normally prevent that from poor(working class). It is also a subsidy to richer group. Also inflation or interest rates force undeemed zombie companies to fall down and risk to realize (unless bailouts are too easy to get, nullifying this again). In financial example, other bank can buy that fallen company pieces say 10cents a dollar, thus assets dont get destroyed. This makes sure also those with lot of assets need to work on them, not just sit on them causing stagflation risk(underinvestment in economy). Some sign of this cheap money for "rich" is how predatory lending as business model has exploded, while not adding anything more to economy, just ripping a cut from working class salaries(based on cheap lending to some companies, while taking a big cut delivering that money to retail). Another example is rentier class explosion with ungained value gain (which you sideline in that comment how to tackle). @@danangelakov7247

The Fed was created by the "fiscal authority" and it could be closed down by the "fiscal authority" just as easily. In fact there are members of Congress who would like to do just that.

@@DerekRoss1958 Shutting down the fed could be done as easily as passing the law that created it?

no problem with that. it could be argued to be too small. the real problem is the rediculous ineffeciency of the millitary industrial complex

There is a theory that says military spending is "an investment at stabilizing currency volatility" or "price you pay to maintain reserve status". Indeed, if you looked into history, Dutch & British used to hold reserve currencies. There are also highest military spenders during their tenure of reserve status.

And a big difference with Japan over the past decades is that inflation was low for Japan, while it was high under Truss (as was the base rate - at least for post-2008).

I've read Kocherlakota's opinion piece which she cites, and it blames the Bank of England partly for stopping its emergency bond-buying, but it mainly blames regulators for allowing pension funds to rely too much on stable bond prices while overleveraged, which forced a mass-selloff. Meanwhile, Kocherlakota makes a point of _not_ blaming markets for punishing the government for the risk, since this was only the initial trigger for the collapse, and it only caused a small drop in the value of the pound. So the idea that the government should have held its nerve and not given into the markets fails both because market scepticism was only a small part of the problem, and because the high-inflation environment under Truss is not comparable to the low-inflation environment of Japan over the last few decades.

liz wasnt mmt... tax cuts that arent immieidaltey payed for arent mmt

If we put a nuclear fusion reactor the size of the sun 150 million kilometres out into space, then it's radiation would warm the Earth. But if we put it in the Caribbean then we'd all evaporate.

The what exactly is 'stability of the currency' aside from the price of goods, services & foreign currency, none of which the fed can control?

The fed can Absolutely do something about the housing problem, because in that Very Statement the person is saying they DID do something about the housing problem: They actively made it worse. Taking the opposite action would have made it better in the same fasion. Now, whether that would be Wise or not given any other effects it might have is a different matter, but saying they can't affect it at all in the very next sentence after saying they DID affect it is just silly. That doesn't change the fact that the government should be doing other things to help deal with the issue (and it really does seem that 'bad zoning regulations' and 'terrible transport infrastructure policy' make up a significant percentage of the problem there).

@@metaflight9495 i have an idea how to stabillise the currency... how about not having an illegal printing press and creating endless monetary units? would that perhaps, not make the currency elss valueable?

The Fed can't do anything about housing? You mean buying $2.4 trillion in mortgage backed securities since the GFC it had purchased, which is entirely stimulative?

Sure, but if we finance the deficit by taxing, there is no deficit because the deficit is spending minus taxation. And if the Ukrainian wheat harvest fails for some reason, say Russia invaded for instance, then the global wheat price is going to rise no matter how perfectly domestic governments balance their budgets. And thus the prices of all products made from wheat will rise too. That too is the Law of Supply and Demand.

@@DerekRoss1958 Absolutely correct.

More the fact that the law of supply and demand has 2 sides. If we increase supply as we increase demand there's no problem. And basically, if people can afford things they used to not be able to afford (could be a car or food, or anything else) prices will go up with more people competing for the same thing. However, there is the question of whether sustained high demand would increase manufacturing capacity and thus there would be more supply and your problem would largely go away.

you have no clue how finance work, nonsense talking

Taxing and borrowing from individuals, etc has limits... You can only tax up to 100%, and then what? Increasing the money supply has theoretically no limit...only inflation and political destabilization can keep them from pushing too much either one of those strategies. MMT is nonsense in the end anyways.