Is There Such a Thing as a Liberal Market Monetarist?

      Sumner and friends have often intimated yes.

      http://diaryofarepublicanhater.blogspot.com/2014/01/yes-scott-ive-rejected-neoliberalism.html

      Sumner has gone further and intimated that Keynesians are political in their argument for fiscal stimulus-they just want bigger government-while intimating that the same is not true of Monetarists-who argue that we should only use monetary policy for AD.

       I see that Tom Brown seems to have bought the argument based on a comment he wrote in a recent post.

       "Also, I'm going to say that it's quite possible to be a liberal MMist: you could be all for more gov involvement in things and still think that monetary policy using NGDPLT trumps fiscal policy every time for the purpose of avoiding unnecessary recessions or depressions (caused by shocks)."

       http://diaryofarepublicanhater.blogspot.com/2014/01/cantillion-effects-anyone.html#comment-form

       I've got to say I disagree with this and that in fact it's at the crux of my whole problem with MMers. I think they package it this way.

     
     "If I was a socialist my views on monetary policy would be exactly the same, target NGDP. I guess you never heard about the liberals who favor NGDPLT."  

     "Garrett gets it, so why can’t you?"

      http://www.themoneyillusion.com/?p=25886&cpage=2#comment-313381

       Here's what the commentator Garret writes:

      "It seems to me that one could implement NGDPLT while still setting government spending at whatever % of NGDP is desired."

      "In fact, I’ll do it right now. I propose that the US government increase the tax burden to 48.2% of GDP and increase government spending to 56% of GDP. That would put us right where Denmark is, a country that Prof. Sumner has written highly of several times on this blog."

      "So supposedly those who call for fiscal stimulus want big government but those who call for monetary policy alone don't favor small government? I've got to say that Scott is a tremendous propagandist. I can't but admire how so many who read him repeat him word for word in parrot fashion. Here is the commentator J. Mann

      "Mike, if Scott’s right, then we could have gotten out of the recession years ago if Obama, Krugman, etc. had clearly followed the following strategy."

       "1) We need to try unconventional monetary stimulus to get the economy moving. If not offset by the fed, an employer side tax cut would also be a good idea."

        "2) As a related issue, while long term rates are low, this is a good time to finance the following positive value government projects: a, b, c. "

      "Then even if (2) was politically infeasible, at least you could exert pressure in the direction of (1). Now it’s true that Obama and Krugman want a bigger government than I do, but presumably we all wanted the recession to end." 

      "If Scott’s not right, then (1) would be a waste of time, but if he is, then Obama left money on the table by giving up on monetary policy early on, and the best case you can make for Krugman is that he failed to clearly articulate that unconventional monetary policy might work and was worth trying."

      He even agrees with him to do a payroll tax cut only for employers-employees get no tax cut. I've never said don't do 1 and 2. I'd be fine with the current Evans Rule but no sequester for instance-at least this year the level of fiscal consolidation is decreasing.

      It's Scott who insists as a religious conviction that we can't do 2. I see no reason why any liberal has to eschew fiscal policy. What would be the reason? There is none. If you want smaller government as Morgan Warstler admits forthrightly no explanation is necessary.