Tag Archives: MMT

In this article, I draw attention to the similarities between the current economic situation and that of 1929, and the threat to today's unbacked currencies.There is the coincidence of trade protectionism with the top of the credit cycle, and there are the inflationary events that preceded it. The principal difference today is in modern macroeconomic delusions, which hold that regulating inflation of money and credit is the solution to all ills. I conclude that economic salvation can only...

Dean Baker looks at offsets. He doesn't see "taxing the rich" as a good offset. I don't think MMT economists do either, and as far as I know, they have not pushed this proposal. "Taxing the rich" through progressive taxation has another reason. That is, limiting the political power of wealth and reducing inequality. There are good reasons for this – social, political and economic.Some MMT economists have recommend preemption of rent extraction first, with the residual to be addressed...

This article goes into the controversial Green New Deal package put out by U.S. freshman Congress member Alexandria Ocasio-Cortez (known on Twitter as AOC) and veteran lawmaker Senator Edward Markey. Majority Leader Mitch McConnell moved to bring the legislation to a vote in the U.S. Senate. However, the probability of such legislation passing would require a Democrat figure in the White House, but it outlines what key party members feel about capitalism, Modern Monetary Theory (MMT),...

"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,...

I confess I expected better. Paul Mason misses the fact that it is not ‘hit and hope’ it is actually the way money IS created – the neoliberal deceit is the ‘fact’ that we tax and spend. The Treasury has after all, admitted as much as, indeed, have the Bank of England in September 2017: “Regarding whether taxation is necessarily required to finance government spending the answer is no, it is not. Along with raising money by taxation, governments can borrow money and they can create money...

The increasing uprising against Modern Monetary Theory (MMT) in the media is salutory because it means our ideas are now considered to be a threat to the mainstream economics (for example, Paul Krugman now buying into the carping) and to the heterodox tradition (for example, the British economists who self-identify with that tradition). The high profile debate around the Green New Deal has been associated with MMT and this has brought all sort of crazy attacks on MMT from those who think...

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,...

Frequent contributor to MNE, Detroit Dan, just posted this piece, with links. I think you will like it.MindorenyoMMT Elevator Speech Detroit Dan

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...