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.