Tag Archives: MMT criticism

"Socialism."While Iain Murray presents an ideologically biased argument agains the GND and MMT, he brings up points that need to be addressed for popular consumption, since it is likely that many people think this way. The GND is not a proposal but an idea for a proposal. A lot of things need to be spelled out that aren't yet. In fact, it is probably not possible to do so at this point, at least comprehensively, since significant pieces are lacking and need to be modeled, developed,...

Paul Krugman has piled onto the "MMT explained by non-MMTers" bandwagon, with a critique of Functional Finance. Functional Finance is largely associated with the Old Keynesian Abba Lerner, and is one of the key intellectual roots of Modern Monetary Theory (MMT). In my view, the most interesting part of the article is that it contradicts the commonly made assertion that there is very little new in MMT (which Krugman hints at in the article as well). In presenting his summary of Functional...

The backers of Ocasio-Cortez’s bill released and then withdrew an FAQwhich seemed to suggest the investment would be paid for using the methods advocated by Modern Monetary Theory (MMT). MMT rightly argues, as against free-market economics, that a state with a sovereign currency cannot go bust. The state can create growth, and thus the means to pay back money borrowed; and it can create money, via the central bank, which can be used to lend to government.For many people on the radical left,...

I don't link to the NYT since it stopped being a newspaper. Alex Douglas explains Paul Krugman's criticism there of MMT based on r > g.This is not a new criticism. It is a neoclassically based argument. It was raised when Thomas Piketty's Capital in the 21st Century made r > g famous.The expression r > g itself was criticized at the time, and I won't repeat it. Suffice it to say that that is a monetarist view that suffers from the insufficiency of neoclassical assumptions about...

Nassim Taleb gets the smackdown. Bill Mitchell – billy blogThose Imbecilic Keynesianisticists are loose – lock up your … whatever!Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

It occurred to me recently that everything has gone wrong since Milton Friedman died in 2006. Enuff said. PowerLineThe Laffer Curve of the Left? Steve Hayward

Gates also took exception to “modern monetary theory,” which is an economic theory with growing prominence on the policy teams of Ocasio-Cortez, Bernie Sanders, and others. MMT, as it’s known, suggests that governments need not worry about deficits because they can simply print their own currency, and should instead manage inflation with interest rates. (You can read more about it in this Vox explainer.) What does Gates think of MMT?“That is some crazy talk,” he told me. “It will come back...

  "Radical socialists" now. This person has no idea of what a radical socialist is based on history and policy, or else he is using the term as a smear. Oh wait, Cato Institute. There's a third possibility. Ideological bias. Ocasio-Cortez and her cohorts are disciples of a new macroeconomic worldview called “Modern Monetary Theory” (MMT). This postulates that governments with sovereign currencies face no financing constraints, and can spend as much as they like through new printed money....

"Common sense" arguments against MMT. Zero operational understanding. Bonkers.The American ThinkerWhy the Radical Left (and No One Else) Touts Modern Monetary TheoryWilliam Sullivan

In short, Liu et al present an entirely different set of expected consequences for extremely low interest rates. Instead of faster growth, they lead to slower growth. Instead of higher productivity growth, the lead to lower productivity growth. While in theory enabling government to address income inequality, they actually exacerbate it by encouraging market concentration and monopolization. More time and research is needed, of course, to see how much impact the market concentration effect...