📑 How come Australia suddenly has billions of dollars to pay for welfare?

Bookmarked How come Australia suddenly has billions of dollars to pay for welfare? (triple j)

“We’ve been told there’s no magic money tree,” one expert says. “Well there is and they’ve just used it.”

James Purtill discusses Modern Monetary Theory and how it provides the means to fund the current crisis:

Here’s that idea in more detail: MMT says inflation will only happen when aggregate demand (all the purchasing being done in the economy) outstrips the goods and services available for purchase (the supply). If there are a lot of dollars trying to purchase stuff, and not enough stuff to purchase, that stuff becomes more expensive.

So long as the economy keeps producing enough goods and services, the theory goes, it won’t have too much inflation.

For this reason, MMT advocates say, governments shouldn’t spend freely during periods of high employment, as the economy can’t increase production to meet the extra demand and would therefore be at risk of inflation.

This may spell the end of the neo-liberal ideal.

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