Sure, but Argentina wasn't doing ING what an MMT theorist would advocate for (which is balancing government spending with available productive capacity). This is evident because they had an out of control inflation rate.

Argentina's economy has been a shit show for a while. And of course outright killing the economy and everybody's standard of living in the process means you're doing something, but it's not what I'd consider helping the economy.

Of course, the first order effect of less spending is not usually good, particulary for those receiving the money.

However, Argentina has runaway second order effects like inflation that must be dealt with, and we know that the only real way to deal with that is to depress the money supply. They will have to deal with the pain in order to repair the rest of the economy; it'll suck initially, but it'll improve outcomes everywhere else, and that should outweigh the effects of reduced government spending before too long.

> it'll suck initially, but it'll improve outcomes everywhere else, and that should outweigh the effects of reduced government spending before too long.

There's no rational beyond blind faith here. Inflation will eventually stop, most likely, but thinking that “because of the sacrifice, things will go better in the end” is just magical thinking.

The economy doesn't give a shit about morality, and Germans are paying the price of this belief at this very moment: they put their moral take about debt (“Schuld”, which also means “guilt”) in their Constitution in 2009 and now they are stuck in a recession with no end in sight because the government cannot support their economy, and they also bullied the whole Europe into reducing their debt during the 2010s, which lead to catatonic growth level in the EU for a decade.

When economics policies are decided on a moral basis with religious-inspired arguments it leads to disaster (and it's true no matter what moral values are driving it: Mao starved his population for the exact same reason, even though the moral values that inspired his policies weren't the same).

Isn't this kind of statement metaphorical?

The literal thing that happens is your country starts spending a greater and greater proportion of revenue servicing its debt (and eventually defaults), but this is less snappy to say.

That depends to a great extent on how the money is actually spent. The USA spent huge amounts of money to get out of the Great Depression, much, much more than it was spending before, and it ended up in a much better economic position, despite a gigantic war soon after.

So, do you know how that magic money should be spent ? And, if you know, do you know how to elect the right people that will spend it on the right things ? There's a high probability it will be spent on friends' big businesses / fraud and abuse

I thought the reason the US ended up with a good economy was because of the war, not despite of it[1]. The war massively ramped up the US's industrial output, and unlike many of the other allied powers there was no need to rebuild once the war ended.

[1] https://eh.net/encyclopedia/the-american-economy-during-worl...

A war doesn't directly improve the economy. It's spending on industry that was justified by the war (plus national fervor) that helped with this. But building ships and planes and tanks is not fundamentally useful for civilian industry. If the same level of investment had been directed to civilian industries instead of military, the economy would probably have been even higher.

I do agree that the relative value of the US economy shot up directly due to the destruction the war brought to European, Chinese, Japanese, and USSR industry and populations - so if you were discussing things in this sense, I can agree.

I really doubt the technology would've advanced as fast without such an adversarial setting. Economic warfare is child's play vs total war.

All that knowledge and redirected output ended up being extremely profitable once it could be used for civilians instead of the military when the war ended.

Not everyone believes in Modern Monetary Theory

Not everyone believes the earth isn't flat either unfortunately.

There's no need to adhere to a particular economic theory (I'm not particularly familiar with MMT) to realize that, at societies scale, money isn't some kind of scarce commodity.

The government spending more money makes money less scarce [0], at any scale (macro, micro etc). That's what we're talking about here.

[0] Unless you believe in MMT

You're moving the goalpost. Here's the original quote:

> stop spending money the government doesn't have

Which has nothing to do with your response.

I interpret "government should stop spending money they don't have" metaphorically as standing in for "don't spend so much money (especially in economically unproductive ways) that it devalues money and misallocates resources so much that it slows down economic growth".

I think simplistic statements "government should not spend money it doesn't have" or "government should stop spending so much money" are all just the normal average person's way of trying to phrase this fundamental economic truth that anyone with a working brain can intuit.

It's obvious that governments cannot just spend any arbitrary large amount of money without consequence.

It's also obvious to anyone, that just like eating too many calories, it's much easier to overspend than to underspend.

So constant calls for governments to go on monetary diets and "make better food choices" are clearly warranted.

> I think simplistic statements "government should not spend money it doesn't have" or "government should stop spending so much money" are all just the normal average person's way of trying to phrase this fundamental economic truth that anyone with a working brain can intuit.

There Is Always a Well-Known Solution to Every Human Problem—Neat, Plausible, and Wrong

> It's also obvious to anyone, that just like eating too many calories, it's much eadier to overspend than to underspend.

You accidentally came up with the best possible illustration for the topic, and it's a really good illustration that actually goes against your argument:

- If you eat too much, you'll get fat and unhealthy.

- If you eat too little, you'll die from starvation.

And you're right, it's exactly the same for government spending: if the government spends too much, it's not good, but if it's spends too little the economy's dead.

Wouldn't an economic indicator for the "right level" be nice? Maintained by some economic research institute (without some obvious agenda)?

Or does that already exist, I just don't know it?

Maybe it's not just one-dimensional though, i.e., it could matter where exactly spending occurs.

There's no such thing as an economic institute without an obvious agenda, and generally no way that we know to compute the optimal spending. And even if there was some way to decide how much to spend, there would still be the insurmountable problem of deciding what to spend this money on.

It's pretty obvious that some uses of money are more useful than others - if the state spent large amounts of money on buying snow and storing it in the sun, that's not going to have the same kind of effect as spending the exact same amount of money on building new roads. But beyond obviously silly examples, no one can really agree on even the basics of the effects of government spending in other areas.

For example, a question like "if the government pays very large pensions and social aids, does that increase the economy as much as spending the same amount of money on subsidizing private business?" is extremely divisive in economic circles - with opposing schools of economics claiming opposite results as the "obvious scientific answer".

Technically there are a few different ways you can potentially eat yourself to death.

Also I'd say the balanced budget "extreme" is more directly analogous to maintaining a balance of calories in versus out, not starvation.

That's too much of a balanced take though than touted by lots of populists.

Germany put it recently into their constitution that new debt is strictly limited, literally called the "debt brake". That overlooks all the nuances you just explained and in the worst case can cripple the German economy. German politics is full of folks demanding the "black zero", meaning essentially no (new) state debt. It's the literal sense, not the metaphorical sense that you are describing. And people buy it, since that's how their household economy works too. They even have a metaphor for that ("schwäbische hausfrau").

It's terrible. The debt brake is just as bad for their economy as the "rent lid" that's very popular among the German left which is crippling their housing sector.

The worst thing about Germany is how the conservatives have brainwashed their citizens into believing that Hitler came to power “because of high inflation” because they wanted people to forget that Hitler came because of their policies (especially Brüning's deflationary policies). And in the end, with the debt break they just constitutionalized the economic policy that put the Nazi to power, and now unsurprisingly the AfD is booming.

Appreciate your defense of me - that is the point I was trying to make :)

I would go into more depth, but I find there are a lot of people that just fundamentally have different views on economics XD

I was answering to “ That shows quite the misconception about what "money" actually is.”