The solution to the US government’s debt woes is to simply print money. From Tyler Durden at zerohedge.com:
If US debt is at $22 trillion and interest rates can barely rise above 2.60%, why can’t the US have $222 trillion in debt? Or 2 quadrillion.
That, in a nutshell, is the generic MMT argument which is gradually being spoon-fed to the general public as the financial basis behind such policy proposals as the “Green New Deal”, and which claims that the US government should dispense with a central bank altogether and resort to helicopter money to reflate the economy, a strategy that is especially popular among socialist politicians as it affords them a carte blanche to spend virtually unlimited funds obtained from the sale of debt.
Of course, this only works until it doesn’t – and it usually stops once faith in the reserve currency starts buckling. But while that has yet to happen, as the TBAC pointed out two months ago, it has not prevented a cohort of financial icons and pundits from opining on the intellectual inconsistencies of MMT. And the latest to do so, just hours after we presented the scathing criticism of Convoy Investments’ Howard Wang, was none other than Jeff Gundlach, who during his Tuesday webcast “Highway to Hell“, slammed MMT as a “crackpot” theory, and slammed the “people who have PhDs in economics” and are “actually buying the complete nonsense of MMT which is used to justify a massive socialist program.”
