Wednesday, June 12, 2019

MMT And "Printing Money" — Brian Romanchuk

Yet again, the question of "printing money" and Modern Monetary Theory (MMT) has come up on Twitter. In my view, these debates are confusing because critics of MMT tend to mash multiple concepts into a pile of textual sludge. Unfortunately, MMTers are forced to respond to those attacks, and the end result is that everyone is confused.
One of the advantages of mathematical training is that you are forced to take definitions seriously, and step cautiously from premise to premise. This enforces clarity in logic.
The whole "MMT is pr1Nting M0N3y$!!!" online debate is a classic example of the logical mish-mash we run into. By my count, there are at least three concepts being pushed together.
  1. The MMT description of monetary operations in the real world, which involve the government "writing cheques" (or using electronic transfers) to pay for expenditures. I.e., "everything is paid for by printing money."
  2. MMT proposals about abolishing the government bond market.
  3. MMT criticisms of how "mainstream" economists employ the "governmental financial constraint" logic.*
I will focus only on the second argument here, for very good reasons. ...
Bond Economics
MMT And "Printing Money"
Brian Romanchuk

No comments: