Tag Archives: MMT

The received wisdom on government debt is that it saddles future generations with the burden of repayment. The received wisdom is wrong. As long as a government’s debt is denominated in its own currency, repayment is never a problem. Why? Because the government can always create the necessary funds.  A sovereign government’s debt is one source of a country’s currency. National governments literally spend money into existence. Deficits can cause problems, but to properly understand those...

In this two-part series I will: 1. Consider the question as to whether fiscal policy is sufficiently flexible enough to provide an effective counter-stabilisation against the non-government spending cycle.If a nation is heading into recession, can governments act quickly enough with discretionary spending changes? If a nation is ‘overheating’ and inflation is threatening to accelerate, can spending and tax changes be implemented quickly enough to counter these tendencies? 2. Should...

Kill shot, or low ball?I say low ball. If that's all you got....Grasping Reality James Montier will soon have an answer to his question why people hate MMT. MMT is about to hate James Montier tooBrad DeLong | Professor of Economics, UCAL Berkeley

1000 CASTAWAYS: Fundamentals of Economics is now published! Here is the Amazon link: 1000 CASTAWAYS: Fundamentals of Economics by Clint Ballinger Enjoy! Any feedback welcome on the Amazon site. Cheers,Clint

It is Wednesday so very little blog writing today. One question I often get asked is what would happen if the bond market investors in a nation stopped bidding for the debt instruments being offered in the regular auctions. Interestingly, overnight I was sent some news from a Deutsche Bank information service written by their New York-based Chief International Economist, who signs himself off as “Torsten Sløk, Ph.D”. It related to these issues. The problem is that Dr Sløk seemed to want to...

The attacks on MMT continue full steam ahead. Janet Yellen (former Fed chair, but clueless on money and banking)—a centrist–has joined the fray. Jerry Epstein—on the official left–has ramped up his ridiculous claims, now associating MMT with “America First” and fascism (you knew that was coming—it has always been the refuge of critics who couldn’t come up with valid critiques). But there are some rays of light. Bloomberg published a more balanced assessment...

By L.Randall Wray The attacks on MMT continue full steam ahead. Janet Yellen (former Fed chair, but clueless on money and banking)—a centrist–has joined the fray. Jerry Epstein—on the official left–has ramped up his ridiculous claims, now associating MMT with “America First” and fascism (you knew that was coming—it has always been the refuge of critics who couldn’t come up with valid critiques). But there are some rays of light. Bloomberg published a more balanced assessment...

MMT is taking flak not only from the right over abandoning "sound finance," but also from the left for apparently advocating reduction in the welfare state through a job guarantee and opposing the attempt to reduce inequality through progressive taxation. What we are seeing now is the transition from MMT as a macroeconomic theory based on institutional analysis to MMT as a policy science advocating for a specific angle on policy formulation that appears to be centrist. First, is...

Warren Mosler's slide pack for his presentation at the New School on March 25th.Taxation

Modern Monetary Theory, or MMT, is almost never mentioned specifically by members of Congress who negotiate budget and appropriations measures, but it is working its way into the mainstream political debate. Now, it’s gotten some Democratic lawmakers’ attention as the party considers big-ticket policy priorities. That includes House Budget Chairman John Yarmuth (D-Ky.), who will decide over the next few weeks whether to produce a fiscal 2020 budget resolution that maps out the caucus’s...