I have, for a long time, been looking for a short, to the point, and intelligible explanation of a term that has been floating around a lot in progressive circles: “MMT,” which stands for Modern Monetary Theory, a name created by someone who commented on this academic interpretation of the government’s role in the economy. I think I have finally found it. (see the video interview below)
Perhaps MMT can be summed up with this statement: Deficit spending by the government is normal, common, modern practice, and not a problem. Austerity politics is deceitful idiocy. The size of the national deficit and debt doesn’t matter. What matters is what the government spends on. It can be a wasteful gift to the rich or a valuable investment (into infrastructure, employment, healthcare, education, and so on) that spurs on the economy and brings about all sorts of paid-for benefits (like better infrastructure, employment, healthcare, education, and so on). Unlike productivity and natural resources which do impose limits, money is not a limited resource for any government issuing its own currency, but a mere accounting and exchange tool to keep track of things. The things we spend it on is what matters as that reflects what we use our natural resources and productivity for and how evenly or unevenly we distribute our national prosperity.
Here is the succinct video of a prominent MMT economist explaining it in understandable terms:
(Note: if the video linked above gets deleted, you may search the Internet for the title: “Have You Heard of Modern Monetary Theory?”)
I’d like to note: Basically, the proof is right there under our noses.
Whenever Congress decides to give countless billions or trillions to the war industry, to bail out irresponsible banks, or to make huge tax gifts to the rich, the question of where the money shall come from is never asked. NEVER! Only when it comes to sharing our nation’s prosperity with the poor and needy or the working “common” American, do our politicians bray and howl like bleeding lycanthropes over there allegedly being no money for it. So, it’s totally clear that our political big fish don’t need to look for money for things they wish to fund. They can just go ahead and do it. To prevent hyperinflation, you simply tax unused money back from where it accumulates uselessly. Case closed. (properly invested government money actually gets taxed back automatically through payroll, income, and sales taxes when the economy is spurred on)
When the political thugs yammer and whine about the deficit or national debt, they only use this specter as an excuse not to share prosperity with the “undeserving” non-rich folks who aren’t among their big, fat, money-bag campaign donors and lobbying-job employers, the ones whose bribes they work for. As corrupt goons, their job is to channel government spending into the hands of those who give them a cut. That’s all there is to their deficit and debt whining.
I fully agree with all of this, by the way. It makes total sense if you ask me.
|Side note: I am aware that – at least among the most outspoken MMTers – ancillary aspects also rank high, like a strong favoring of a federal job guarantee and dislike of a universal basic income when it comes to socially responsible government spending. This is where I have a different position since this stance seems to me to focus too exclusively on macro-economic considerations while skipping over the human nitty-gritty of actual life which, I believe, requires a more variegated rather than a one-size-fits-all approach. I’d like to see both measures (and then some) included in the way forward. But I feel those discussions belong somewhere else. The main message of MMT is that the money for those things is there. We can afford nice things!|
I hope I have finally succeeded with my long-standing wish to provide a succinct, easy to understand, meaningful, and hopefully accurate presentation of MMT. (If not, please comment below or contact me. No registration necessary.)
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