Category Archives: MMP

MMP Blog #51: The Efficiency Fairy and Inflation Goblins

By L. Randall Wray

The main objection to MMT is the belief that adoption of a fiat money necessarily leads to high inflation if not to hyperinflation. Those who adopt this critique usually see MMT as a proposal, although some (like Paul Samuelson) recognize that MMT actually describes the system we already have. The latter group fears that if we tell the truth about the existing monetary system, then elected officials will “run the printing presses” to create high inflation. Hence, best to adopt what Samuelson described as the “old time religion” of lies about the fiscal options open to sovereign government to keep the inflation goblins at bay. Continue reading

Response to Blog 50: Conclusion – Minsky and the Job Guarantee

By L. Randall Wray

As I said I am not going to provide responses to comments on the final blogs of the primer. In any case, the commentary has degenerated into a chat room utilized largely by aging retirees who do not understand that we’ve got at least 25 million people in the US who want full-time jobs but cannot obtain them. The JG is a program designed to offer jobs to those who want to work. If our aged retirees are correct, we’ll offer the JG at and no one will show up to claim the job. I cannot see what all the fuss is about. Continue reading

MMP Blog 50: MMT Without the JG? Conclusion

By L. Randall Wray

Sorry for the interruption of the blog. Originally I had planned 52 blogs, one-year’s-worth, although along the way I added a few so that we would have run about 13 months. Here’s why: the blogs came from a book manuscript, the Modern Money Primer. The idea was that you would not only be a test audience, but that your questions and comments would allow me to revise the manuscript as we went along. And that worked. I think the manuscript was much improved because of this blog. You helped write the book.

Continue reading

MMP Blog 49: Should Growth Drive Jobs, or Jobs Drive Growth?

By L. Randall Wray

Sorry for the hiatus, but a family emergency is consuming all of my time. I hope to be able to post something next week—to move to finish up the MMP blog. Meanwhile I offer the following.

Continue reading

RESPONSES TO BLOG 48: MMT AND THE JOB GUARANTEE

By L. Randall Wray

Ok we had a huge number of responses. I can see we will need a Blog 49 on this topic and that there are way too many comments for me to deal with tonight. I will just hit seven themes—commentators should be able to see which of these themes their comments fall under. And I will be brief. I will deal in more detail next week with a few of these.

1. Attention Deficit Disorder: A couple of comments here, and from what I can tell a huge number of comments on other “Modern Money” blogs that are not called MMT, suffer from ADD. Some people cannot read past a single sentence. I think there are now drugs that help. Try them.

So apparently a lot of bloggers (especially those who accept MMT, but without the taxes or the JG—go figure!) latched onto a sentence, plus one word. I said: “So, can we have MMT without a JG? Certainly!” Now that followed a long discussion, including an analogy to a theory of disease and a policy to fight the disease (more in a minute), and followed by the statement by me: “I believe it is a policy mistake to operate a modern money system without a JG—but that is what almost all countries do. MMT allows us to analyze them, and to offer policy recommendations. But if we leave out the JG in our recommendations, we are seriously remiss in our advice.”

Continue reading

MMP Blog 48: IS THE JOB GUARANTEE NECESSARY?

By L. Randall Wray

Over the past 11 months, or so, we have examined Modern Money Theory. This is the proper paradigm for analyzing all modern countries that use their own currency.

Some have wondered whether we can separate MMT from the Job Guarantee (JG): can one accept MMT while rejecting the JG?

To be honest, I find this to be a rather strange question. We have a modern theory of Bubonic Plague. Until medical science developed a theory of disease that can be caused by microbes too small to be seen with the naked eye, all sorts of explanations of the cause of the Plague were offered. The most popular was “bad air”. The preventative measures offered (quarantine of affected individuals, evacuation of cities, burning of the property of the deceased), and improvement of public sanitation actually were quite effective—indeed, in the richer countries the plague was almost banished even before the “germ” theory of disease was ever developed. (To be sure, there were false starts—such as killing cats, that had helped keep rats in check!)

Continue reading

Responses to MMP Blog #47: The JG / ELR and Real World Experience

By L. Randall Wray

Before we get underway, I have two appeals.

Appeal #1: About twenty years ago Don Roper and Ric Holt created the PKT (Post Keynesian Theory) internet discussion group. It was the first such group I’d ever come across. All the “top” heterodox economists participated. The discussions were interesting and important. You might still be able to access some of them.

However, the list was destroyed by frackers.

I won’t go into all the details but here is the basic problem. Every couple of weeks some pseudo Austrian would come along with the free market /anti government ideology posts. That was not really the problem—which was two-fold. First these people had no understanding of heterodox economics—they never read previous posts and were congenitally lazy (and, it appears, dense).

Further, they had no interest in learning anything. They were selling, not buying. They were self-appointed evangelists for the Austrian cause. Now, in truth they had no understanding of Austrian economics, either—which is why they were pseudo. I gather they spent most of their time in their mothers’ basements alternating between (how shall we put this?—as delicately as possible!) fracking themselves and fracking progressive discussion groups.

Continue reading

MMP Blog #47: The JG / ELR and Real World Experience

By L. Randall Wray

There have been many job creation programs implemented around the world, some of which were narrowly targeted while others were broad-based. The American New Deal included several moderately inclusive programs such as the Civilian Conservation Corp and the Works Progress Administration. Sweden developed broad based employment programs that virtually guaranteed access to jobs.

Continue reading

Responses to MMP Blog #46: The Job Guarantee – Program Manageability

By L. Randall Wray

Responses to MMP Blog #46: The Job Guarantee – Program Manageability

Sorry, late yet again. One more week of teaching and then things should be less hectic. Note I had planned for 52 MMP blogs and we are nearing the end…… But it looks like we’ll need a few more. I’m going to be a bit lazy this week, cutting and pasting the comments and providing brief responses.

Continue reading

MMP Blog #46: The Job Guarantee – Program Manageability

By L. Randall Wray

As mentioned earlier, critics have argued that the program could become so large that it would be unmanageable. The central government would have difficulty keeping track of all the program participants, ensuring that they are kept busy working on useful projects. Worse, corruption could become a problem, with project managers embezzling funds. We will briefly look at some methods that can be used to enhance manageability.

Continue reading