Modern Monetary Theory

You'll get inflation.

One of the arguments against MMT, you'll hear it all the time, is, oh, you know, MMT people think the government can spend beyond reason.

And it's like, no, we don't think that.

What we're saying is there's probably a lot more spending available than most people think.

And MMT is modern monetary theory.

Yes,

yes.

But maybe I could start us off by just kind of setting the stage of where all this came from.

Money on the Left, I think, like Real Progressives, is a MMT-oriented organization.

We're trying to think in complementary ways and sometimes beyond the lessons of MMT.

And as I think I've mentioned on several occasions on this very show, what Money on the Left has really been keen on doing is taking MMT's basic argument that money is essentially public and essentially endogenous, which is to say it is created out of thin air all the time as a function of political and legal institutions to take those truths and maximize them.

Of course they wouldn't.

I mean, they're focused, even the Republican Party is focused on this modern monetary theory.

I call it, you know, MMT.

I call it the magic money tree.

They want to completely have the financial system divorced from reality.

Hey everybody, welcome back to the Human Action Podcast.

Today I am going to do a deep dive on accounting in the MMT world.

But it's going to be fun because I'm going to be responding to and elaborating upon an argument I got to on X.

All right, so here, let me just take you through the play-by-play.

So what happened is...

Last week, as I'm recording this, Jonathan Newman tweeted this out.

He said, Bob Murphy Econ's chapter in Anti-MMT addresses this.

He has a great analogy.

This has become a very popular view.

It's called modern monetary theory or MMT.

And there are some quite well-known people operating in the market.

in popular media who argue for this, there are almost no economists who think that's true.

And the problem with inflation is it's very, very damaging to ordinary people, as people may have spotted over the last few years when inflation is – the reason we've got a cost of living crisis is because it's inflation.

And if you got inflation, then you would find that you couldn't just print as much money as you wanted because – inflation would be your constraint and so it this is i think that is over simplistic that view if you're willing to say there's an inflation constraint and therefore you might be able to print the money but it wouldn't be a a successful policy then we might be we might be closer in view but um you know if it were really that simple governments would have done it

There's sort of a middle ground position, isn't there? Because there's sort of the MMT position, which is there aren't really any constraints other than inflation.

And we should sort of, I suppose, just detach ourselves from the bond markets, I suppose.