Put (very) simply, MMT posits that a country that controls its own currency can continue to pay down its debt as long as it is denominated in that currency. So since the US prints dollars and issues debt in dollars, it can pay down its debts and does not need to rely on taxes to fund debt issuance.
Instead, the theory says, a country in the aforementioned situation is limited by the availability of real assets. So while we can’t just ignore the national debt, unlike a household budget, the debt number – such as theUS’s record $22 trillion debt load – doesn’t matter until inflation and economic effects show up.
Explained to Marketplace by the economist Stephanie Kelton, an MMT proponent, Congress would use fiscal policy to control how much money goes into the economy. To borrow Marketplace’s metaphor, Congress would be a sink faucet, money would be the water, and the stoppered sink bowl would be the economy. To deal with inflation (an overflow out of the bowl) you can lessen the flow of water into the bowl. Taxes would also act as the stopper letting money out of the economy sink bowl.
The idea has gained a following among progressive economists and some politicians. Rep. Alexandria Ocasio-Cortez told Business Insider in January that MMT should be “a larger part of our conversation.”
But the idea has also faced intense pushback from economists andpundits across the political spectrum, and a new survey showed that no mainstream economist is ready to sign on to the idea just yet.
The kicker is at 1:55
https://www.youtube.com/watch?v=j2AvU2cfXRk
:/
It sort of strikes me that once you finance projects simply by turning on the presses every government connected project out there will demand more government money and they’ll get it from Democrat Government. At that point there’s no real need for taxes at all. However you can expect every other trading partner to stop taking US dollars and demand gold, silver, manufactured goods instead of greenbacks. The barter system will take over, the dollar collapse and the corpse of AOC, Soros, Steyer and the rest of her criminal buddies would likely be found hanging from various streetlights, poles, trees or Wind Turbines.
Big problem with this, since the bowl is already full, you can’t add any more water unless you make the bowl bigger.
Any explanation I’ve seen doesn’t include the words, “confidence,” or “faith.”
Those 2 words are the only things that adds “wealth” to federal reserve notes.
MMT will destroy those two words as they relate to our currency, and as a result any theory they have now will not apply in the future, after those words have run course.
I’m not even an economist. Oh wait, keynesian and economist are used interchangeably these days.
Yeah, but what about the bottom ten economists?
I mean, it’s like, you know, some other stuff or maybe, like, y’know …
izlamo delenda est …
Next week, she’ll be telling us that perpetual motion machines, like, need to be part of the conversation on alternative energy.
“…a country that controls its own currency can continue to pay down its debt as long as it is denominated in that currency.”
How’s that going to work under Globalism, when nobody has their own country, much less a currency of their own to control? Globalists, please enlighten.
@LCD – If the Australian Bob & Ray can see through the BS, you know it’s a crackpot theory.
Thanks for the link. Funny stuff.
Five out of four statisticians voted for Obama.
(Nah, I just made that up.)
Tried and tested. PASSED BY THE VENEZUELAN BOARD OF ECONOMIC REVIEW.