/biz/ - Business & Finance

I do think there are things to be learned from MMT, and to the extent that it focuses on capital inefficiencies I think it's helpful. Healthcare for example. If the united states healthcare system operated the same as japan it would be much more capital efficient. In japan the government meets periodically with representatives of the healthcare industry to negotiate fixed prices for every possible healthcare service that can be bought. So you need 3 stitches? The price is fixed at $23. You need 7 stitches? The price is fixed at $38. Then when you leave the doctors office with your stitches they submit the procedure that was performed to a government office and that office submits the $38 for your stitches to them. This eliminates an entire industry of middlemen (the insurance industry) that we have in the united states. This is a much kore capital efficient system. It frees up wasted capital on an industry that adds nothing productive to the economy. Those insurance industry employees' labor is now freed up for more productive purposes like engineering, food production, whatever. However this system, while better than ours, still creates all sorts of other problems, like maybe now the government doesn't pay enough for stitches anymore for doctors to be incentivized to do stitches and they no doctor wants to do them because staples pay more, even though they are not always more desirable in every case. If all of this was left 100% to the private sector the efficiency would be even greater and there wouldn't be any problem with misallocations that are bound to occur when the government micromanages to that extent. MMT also doesn't solve the problem of what happens when all of the savings reflected by your deficit are owned by foreign entities instead of domestic. i.e. pic related. Now you domestic population has experienced a devaluation of their money with the value lost going overseas. Hence foreign populations increase their wealth at the expense of your dom. pop.