Tag Archives: MMT critics

More proof we are ruled by morons.  The battle line is drawn, with the ruling elite and neoclassical economists at the center and the flanks occupied by Austrians and Libertarians on the right and clueless progressives on the left, with corporate media in the background, facing off with the MMT economists at the center flanked by MMT advocates, backed by a public that agrees with genuine progressive goals. Now it is a battle for hearts and minds. Quartz Actually, deficits do matter,...

Another rant from Tim Worstall. If we can't get the rich to pay for all this democratic socialism the Left would give us these days, then how are we going to pay for it? Up pops that other current bright idea, modern monetary theory: We just print the money and go spend it. It is actually true that nobody has ever had socialism paid for by the rich, so it's good to have an alternative idea out there. It's even true that modern monetary theory works, in theory.The only problem is when we...

I was poring over the Federal Reserve minutes from Feb. 21, and as I was rolling my eyes and looking around my den for something to throw, I was reminded of the comments from then-Fed chairman Ben Bernanke years ago when he was asked if the Fed was "monetizing debt." The reply was "No."Yet here we are, years later, and the new mantra is now "Modern Monetary Theory," which says central banks and sovereign treasury departments can print any amount of money they so desire over any extended...

The echo chamber. One school of thought that’s been the focus of strenuous debate, known as Modern Monetary Theory (MMT), holds that worries about increases in public debt are misplaced, and that the federal government can easily take on much larger spending in some key areas without raising revenues through higher taxes. But at least one progressive policy wonk has his doubts about that increasingly popular approach. Matt Bruenig of the People's Policy Project accuses MMT supporters of...

If Modern Monetary Theory (MMT) were implemented, foreign exchange markets would have their say about it, that is if we still had floating exchange rates. FACT: No matter how much money the Fed prints, or what they do with their balance sheet, you cannot spend more money than you make. You can make up a shortfall with debt, but after a while, creditors will have had it with you. Governments have always found the temptation to borrow, overspend, and tamper with the value of their...

It is great that Paul Krugman is spending so much time trying to understand MMT, but I don't think he has escaped from his old ideas sufficiently yet to grapple with these new ones.  Professor Krugman assumes an inverse relationship between aggregate demand and interest rates which is stable enough to be useful. In other words, he assumes a reasonably stable and downward sloping IS curve.  No such relationship can be assumed.Fiscal policy is effective because it adds to or subtracts from...

In this article I will attempt (but probably fail) to critique MMT in good faith, but I will be targeting MMT as it is generally presented to the public — that is where I’ve digested most MMT content: mainly through MMT bloggers and on twitter. If this is at odds with some more academically pure version of MMT that exists in the literature, I can only suggest that modern monetary theorists could then work on their messaging somewhat.... Exactly how is that "good faith"?In addition, the...

This economic theory [MMT] could best be described as the equivalent of claiming that water runs uphill, the sun rises in the West and apples do not fall from trees. It is the Alfred E. Neuman platform of political posturing. It takes “What, Me Worry?” to a new level in promoting political ideas that are fiscally dysfunctional. Two weeks ago, the U.S. national debt passed $22 trillion. You get the idea. Another clueless "progressive" determined to lose. And if they won, they would be...

Kevin Drum is clearly an apologist rather than a serious commentator. Ignore him. So far, then, MMT has not seduced most lefty economists into becoming defenders of crank theories the way supply-side economics did on the right. Hooray for us! He is a reason that progressives that follow the line he touts will lose, or if they win, will fail. Clueless, and don't want to know. Mother JonesIs MMT the Liberal Version of Supply-Side Economics?Kevin Drum

Doug Henwood has posted up at Jacobin an MMT critique that amounts to little more than a character assassination. It is what I’d expect of him in his reincarnation as a Neoliberal critic of progressive thought. (https://www.jacobinmag.com/2019/02/modern-monetary-theory-isnt-helping). It adopts all the usual troll methodology: guilt by association, taking statements out of context, and paraphrasing (wrongly) without citation.... New Economic Perspectives Response to Doug Henwood’s Trolling...