By J.D. ALT
ironic that, at this moment, when the truthfulness and utility of modern money
theory (MMT) is being publicly realized—(and even potentially implemented!)—that its singular vulnerability
must emerge as a real concern: hyper-inflation.
most recent thing I’ve written—Paying Ourselves to Save the
Planet—addresses the issue of
hyper-inflation as follows:
The last two and a half months I’ve been at work on a new book. As it evolved, I found I was approaching MMT from a new direction—one which made an explanation of MMT much less counter-intuitive and, perhaps, less controversial. The approach is relatively simple and straight-forward: follow what I began calling “standard money theory” step by step until one reaches a perspective that has, almost seamlessly, become “modern money theory.”
In the first part of this series, we explained why MMT should be seen as a political problem rather than just an educational one. In this concluding part, we will discuss where MMT promotion is most likely to fail or have good chances of success. First, consider some poor prospects.
All readers of NEP know how Social Security works and it seems like a natural for MMT. But is it? Wall Street sees the program as a leak from what should be their profitable money flow. For years, the former investment banker and secretary of commerce under Ronald Reagan, Pete Peterson, kept forecasting its failure. George W. Bush tried to fix the leak by privatizing it. Arguing the virtues of MMT for Social Security is a sure way to stir up Wall Street bees that are quiet at the moment.
By Thornton Parker
The way a problem is seen can determine how or even if it gets solved. When the French engineer, Ferdinand de Lesseps, was picked to build the Panama Canal, he saw it as another excavation problem as his Suez Canal had been. But Egypt was flat and Panama had a mountain.
When the United States took over the job, John Stevens, who was put in charge, saw it as a railroad problem. The biggest task was to move ninety-six million cubic yards of rock and earth, as fast as the fifteen giant steam shovels cut them out of the mountain, from the Pacific side of Panama to the Atlantic side for building a dam and raising a lake that would be part of the canal.