by THE PAST FEW YEARS have been good ones for Modern Monetary Theory (MMT). A decade ago, you would have been hard-pressed to find a mainstream economist who had even heard of this fringe school of left-Keynesian economics. But ever since Bernie Sanders made MMT proponent Stephanie Kelton a senior economic advisor for his 2016 presidential campaign, it has gradually trickled into the mainstream. In June, Kelton’s new book, The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy, landed on the New York Times Best Sellers list, no small feat for a tome about monetary issues.The meteoric rise of MMT may be surprising to its many detractors (Clintonite liberals hate MMT as much as Senate Republicans do), but it shouldn’t be. Its basic message — that the spending of
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THE PAST FEW YEARS have been good ones for Modern Monetary Theory (MMT). A decade ago, you would have been hard-pressed to find a mainstream economist who had even heard of this fringe school of left-Keynesian economics. But ever since Bernie Sanders made MMT proponent Stephanie Kelton a senior economic advisor for his 2016 presidential campaign, it has gradually trickled into the mainstream. In June, Kelton’s new book, The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy, landed on the New York Times Best Sellers list, no small feat for a tome about monetary issues.The meteoric rise of MMT may be surprising to its many detractors (Clintonite liberals hate MMT as much as Senate Republicans do), but it shouldn’t be. Its basic message — that the spending of currency-issuing governments is not constrained by tax income — is uniquely resonant in a moment when trillion-dollar stimulus packages and zero-percent interest rates are becoming the new normal. Most of us need money in our bank accounts right now. MMT tells us that the only thing keeping the federal government from providing the kind of fiscal support we need to weather this pandemic is that they don’t want to. There is no objective economic constraint, only a lack of political will....
Should-read. Interesting comparison and contrast of MMT with the contemporary Marxian and socialist left in the US.
Los Angeles Review of BooksMainstreaming MMT
Aaron Wistar. PhD candidate in History of Consciousness at UC Santa Cruz, who focuses on the history of central banking