I know some visitors here will be happy to see this piece on “modern monetary theory” in today’s WaPo today, as was I. It’s particularly gratifying to see my friend Jamie Galbraith featured, a rare economist who’s ability to see outside the box has enabled him to be consistently right about a lot of things that others have missed.
For me, I’m down with MMTs up to a point. I very much agree that deficit reduction has been deeply miscast as pure virtue, with little regard for its economic impact. As I’ve written many times here, the first question re fiscal policy, at least until we’re reliably headed toward full employment is not “how quickly does your deficit come down?” It’s: “is your deficit large enough to replace lost private sector demand?”Read it at Jared Bernstein | On the Economy
MMT in the Headlines
by Jared Bernstein
(h/t Clonal in the comments)
Bernstein: "For me, I’m down with MMTs up to a point." Translation: I'll adopt the save parts until enough other names come aboard to make it respectable.
This illustrates the huge risk that Jamie Galbraith took and how the entire country is indebted to him for doing so. MMT is only getting mainstream traction because of his bold adoption of it. He is going to be one of the heroes in this, along with the economists that developed MMT and staked their careers and reputations on it.
John Carney's giving MMT exposure is extremely significant, too, even though he is guarded about it. But just bringing it up on CNBC, populated by people like Rick Santelli, is telling. If John were not the guy in charge over there, it would not happen. So props to John, too.
This article also shows that a lot more people know about MMT than are letting on. It's happening. So don't be concerned that people are not jumping in with both feet yet. They are just testing the water.