Inflation reduction gets wrecked by both sides of the isle.

Under an MMT regime, policymakers would need to respond to inflation by doing two of the most unpopular things ever: raising taxes and cutting spending.

With MMT, if inflation starts to get out of control, money needs to be pulled out of the economy either by taxing people more or spending less. Raising taxes is, of course, historically difficult in America. For example, the last time Congress passed a meaningful increase in the payroll tax was in 1993 when the earnings limit was repealed for the Medicare portion of FICA.3 The last Republican president to sign a tax increase into law was President George H.W. Bush in 1991.4 With one party adamantly opposed to increasing taxes, it seems like a fantasy to believe that politicians would approve a tax increase while people’s earning power is being eroded by inflation. On the spending side, do we see Democrats actually cutting spending and taking an ax to things like national parks, food inspection, and health care services? They shouldn’t have to—and they won’t.

Further, the current political system moves painfully slow. People rightfully blame gerrymandering, primary challenges, the filibuster, and a host of other political issues. But the end result is the same: depending on Congress to react as quickly as the Fed currently does takes a lot of faith. We can easily imagine divided government’s paralysis [incapacity] to fight inflation—Republicans refusing to raise taxes and Democrats refusing to cut spending.