By J.D. Alt
A principal dilemma of the theory of modern fiat currency (MMT) is the question of how the state spends the money it issues: who decides, and by what process? It may be frustrating to watch U.S. Congressmen and Senators bicker and behave as if their national government has run out of dollars, but it is sobering to consider what would happen should these legislative prodigies suddenly realize that, in fact, there are no currency constraints on their spending at all. It is hard to imagine who, or what, would step in to impose some kind of discipline and planning for the spending spree that would ensue. I suspect that many who actually understand fiat currency are hesitant to overtly embrace it for precisely this reason—because they are unsure what structure exists, or could be put in place, that would rationally manage the remarkable levels of sovereign spending MMT makes possible.