Tag Archives: Modern Monetary Theory

MMT: Not Modern, Not Monetary, Not a Theory, by Jeff Deist

Jeff Deist spares SLL the trouble of debunking the Modern Monetary Theory fantasy. From Deist at mises.org:

Modern monetary theory (MMT) has a new champion, and a new bible. Stephanie Kelton, economics professor at SUNY Stony Brook, is the author of The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. Professor Kelton was an advisor to the Bernie Sanders presidential campaigns, and her ideas increasingly find purchase with left progressives. It is certainly possible that she has a future either in a Biden administration or even on the Federal Reserve Board, which is a testament to how quickly our political and cultural landscape has shifted toward left progressivism. And left progressivism requires a “New Economics” to provide intellectual cover for what is essentially a political argument for painless free stuff from government.

Kelton’s essential argument, first advanced by MMT guru Warren Mosler in the 1990s, is quite simple: federal spending is unconstrained by revenue. Taxes function only to regulate demand and hence inflation; federal borrowing functions only to regulate interest rates. Sovereign government treasuries can create and spend as much money as they like to stimulate growth, especially when the economy is underperforming. If inflation spikes, taxes can be imposed to take money out of the economy.

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Modern Monetary Theory is an old Marxist Idea, by Claudio Grass

Print your way to prosperity, what could be simpler? Only those who profoundly hate humanity could embrace the idea. From Claudio Grass at lewrockwell.com:

There is nothing new under the sun

Modern Monetary Theory, or “MMT”, has been getting a lot of attention lately, often celebrated as a revolutionary breakthrough. However, there is absolutely nothing new about it. The very basis of the theory, the idea that governments can finance their expenditures themselves and therefore deficits don’t matter, actually goes back to the Polish Marxist economist, Michael Kalecki (1899 – 1970).

MMT as a centralisation tool 

MMT says that the national debt means that we owe the money to ourselves, so the central bank in combination with the approval and blessings of the political branch can now together spend as much as they want without facing any consequences. In other words, we can print our way to prosperity. The only real problem according to the theory is that there is not enough money and not that resources are scarce and therefore limited. To understand the basic idea behind this, let’s use the game “Monopoly” as an example. If players decide to double the amount of monopoly-money to play with, the logical outcome will be that people start to pay much higher prices e.g. for the same amount of locations. Whenever more money is chasing the same amount of goods, prices will rise. Another lesson is that the bank will always win, especially when it has the power to change the rules at any time during the game.

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Capitalism Is The Worst, Except For All The Rest, by Lance Roberts

This is the third of a series on capitalism, the first two parts are linked below. From Lance Roberts at realinvestmentadvice.com:

n Part 1, we discussed how “Capitalism” was distorted by Wall Street. In Part 2, we reviewed some of the “myths” of capitalism, which are used to garner “votes” by politicians but are not really true. Most importantly, we discussed the fallacy that “more Government” is the answer in creating equality as it impairs economic opportunity.

I want to conclude this series with a discussion on the fallacy of socialism and equality, and provide a some thoughts on how you can capitalize on capitalism.

Socialism Requires Money

The “entire premise” of the socialist agendas assumes money is unlimited. Since there is only a finite amount of money created through taxation of citizens each year the remainder must come from the issuance of debt.

Therefore, to promote an agenda which requires unlimited capital commitments to fulfill, the basic premise has to be “debt doesn’t matter.” 

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