Wednesday, January 16, 2013

Bill Mitchell — IMF locked into circular (religious) logic again


Classic Bill. Cuts to the heart of the matter and debunks the myths.

Bill Mitchell – billy blog
IMF locked into circular (religious) logic again
Bill Mitchell
Conclusion 
The point is that the entire discussion of fiscal sustainability cannot be self-referential – that is, defined in terms of some irrelevant benchmark.
The only meaningful discussion about whether a nation is wasting its fiscal capacity or not has to be contextual and that context is the real economy. Invented terms such as a fiscal crisis or sovereign debt crisis have no place in the design of fiscal policy. A sovereign, currency-issuing government can never face a fiscal or sovereign debt crisis.
Please read the following introductory suite of blogs – Fiscal sustainability 101 – Part 1 – Fiscal sustainability 101 – Part 2 –Fiscal sustainability 101 – Part 3 – to learn how Modern Monetary Theory (MMT) constructs the concept of fiscal sustainability.



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