Tag Archives: MMT criticism

"Socialism." Cato Institute, what to expect? At the same time, Ryan Bourne's objection that the GND goes way past what is needed to address climate change and that its true agenda is broadly imposing progressive policy needs to be addressed. Ryan Bourne also brings up a point I often make myself. Economics is fundamentally about choice involving tradeoffs and opportunity cost. Rational choice is ruled by effectiveness and efficiency in doing so. Effectiveness is about setting goals,...

Finally, some constructive criticism of MMT.  Civil engineer and manager Sig Silber suggests many points that he feels need to be addressed in debate. They are well taken. No doubt many encountering MMT will have similar questions. MMT economists have anticipated a number of them and addressed them already. Some just disappear on correct understanding of MMT. The remaining one are generally political issues as much as economic, which MMT also admits. Such issues have to be decided...

More bloviating. Every one of the scores of known cases of hyperinflation dating back over 700 years bears witness to a reckless, breakneck campaign of money creation preceding it. Post hoc, propter hoc fallacy.All hyperinflations can be traced to scarcity of real resources for different reasons preceding money creation. Weimar was the result of war reparations. Zimbabwe was the result of fall in production. Venezuela was the result of pegging its currency to the dollar, thereby abandoning...

At least the author tried to understand MMT, but he didn't quite make it. In addition, the "argument" is dismissive rather than substantive. Back to the drawing board. Manila Times The Dangerous Appeal Of MMT Ben Kritz, TMT

Which brings us to the common ground that Trump shares with Ocasio-Cortez: Neither one believes in budgets. Central to the Green New Deal is a formulation known as modern monetary theory, which holds that the spending power of a sovereign government is limited only by its productive resources. Trump's fiscal insanity - massive spending along with pleas for lower interest rates - is modern monetary theory in all but name, and his trillion-dollar deficits are inspirational for the authors of...

Physician Ted Noel first admits that AOC went though rigorous math training to obtain her undergrad degree in International Relations and Economics, and then accuses her of making trivial math mistakes.  He then shoots from the hip himself, cooking up an off the cuff model of why AOC is clearly wrong.  Dr. Nolan  thinks he can just extemporize a response off the top of his head based on his undergrad math degree as part of his pre-med training when we are talking about launching another...

This morning I responded to leading Modern Monetary Theory (MMT) proponent Stephanie Kelton's Huffington Post op-ed, "How We Can Pay for a Green New Deal," with a tweet observing that "MMT often boils down to nothing more than an especially naïve sort of Keynesianism: assume an unlimited excess supply of every resource save money balances, and, voila! monetary expansion can costlessly finance all the projects we like!" My comparison of basic MMT arguments with plain-vanilla Keynesianism is...

It seems now very opportune that I recently posted three times on my blog my views on Modern Monetary Theory (MMT), an increasingly attractive theory for the left to justify government spending to meet the ‘needs of the many’. For just this week, left Democrats in the US Congress, led by the rising star Alexandria Ocasio-Cortez (AOC), a member of Democratic Socialists of America, launched what they call the Green New Deal (GND), an alternative programme for a future US government to adopt...

I think that you don’t have to be an economist or have done a PhD involving econometrics (economic statistics) to see that the claim “doubling the monetary supply decreases the dollar’s exchange rate by 50%” does not hold at all. While monetary supply goes up almost all of the time, the exchange rate swung back and forth. There does not seem to be any causal relationship at all. This is not a surprise: almost all scholars of economics point out that the trade-weighted exchange rate is...

Essentially, Ocasio-Cortez is continuing to argue for Modern Monetary Theory — something she said "absolutely" needs to be "a larger part of our conversation" in a recent Business Insider interview. The theory says that because governments can literally print money, "they can spend as much as they like," Politico explains. "Inflation is the only obstacle" that should stop the presses, The Week details here. In short, it's a big, untested idea for a big, untested plan. Read more two...