By Dan Kervick
A common criticism of Modern Monetary Theory is that it is a naïve doctrine of free lunches. The critics grant that a country like the United States, which issues its own freely floating fiat currency, can always make the policy choice to issue whatever quantity of that currency it deems appropriate. The US government can spend as many dollars into the private sector economy as it chooses, without obtaining those dollars from some other source first, and it can always pay any debts that have been incurred by borrowing dollars. But the critics will go on to charge that MMT mistakenly concludes from these few institutional and operational facts that there are no economic limits to the wealth-generating capacities of the government. They caricature MMT as a doctrine of manna from heaven, in which the power of issuing a generally accepted medium of exchange confers the power of conjuring real wealth into existence by prestidigitation. In short, they see MMT as a disordered syndrome characterizing people who are experiencing massive money illusion.
By Stephanie Kelton
Our friend Lambert Strether is having a fundraiser and we at NEP want to support him the way he supported us more than three years ago. We hadn’t met before, but Lambert wrote to ask if we would come to Washington, DC as an antidote to the “fiscal sustainability teach-in” that Peter G. Peterson was hosting. We agreed, and Lambert set about raising money and interest in the event. Warren Mosler, Bill Mitchell, Randy Wray, Pavlina Tcherneva and I all participated.
Correntwire was also one of the very few places where the Proof Platinum Coin concept took root and sprouted. He’s a tireless advocate who deserves our thanks.
If you support MMT, then please consider helping out someone who has done so much to help us over the years. Click here to help.
By William K. Black
(Cross posted at Benzinga.com)
I began writing this article while returning from presenting at a conference on Modern Monetary Theory (MMT) in Reggio di Calabria, Italy arranged by Francesco Toscano and supported by the Regione Calabria and the Provincia di Reggio Calabria. MMT has sparked considerable interest in Italy because it puts the lie to the constant claim that there is no alternative (TINA) to austerity and deepening recessions in the Eurozone. Continue reading
By L. Randall Wray
Let us continue to develop an alternative frame for money. As you know, MMT says that “taxes drive money”. Let’s develop that further.
According to the orthodox meme, taxes are bad—the far right views them as outright theft—so the lower they are, the better. Most view taxes as necessary to “pay for” government spending, but again since in the conservative framing, government does next to nothing that is useful this represents a redistribution from productive, private, use to public waste. Hence, again, it is best to keep taxes as low as possible to “starve the beast” and to keep the private sector humming along. Continue reading