‘Modern Monetary Theory gives us the power to imagine a new politics and a new economy’
Balancing budgets, reducing deficits and eliminating debt: these priorities have preoccupied the minds of many Canadian politicians, economists and voters, but a different theory of macroeconomics is having a moment, as the world weathers a pandemic.
Modern Monetary Theory (MMT) proposes a shift in focus from a balanced budget to a balanced economy: one that offers full employment, a more equitable distribution of wealth and a social safety net for all who need one.
At the moment, there appears to be a rare consensus among economists, business leaders, and politicians of all stripes that governments have to spend whatever it takes to ease the pain for millions of Canadians suffering the aftershocks of the pandemic. That may be one of the reasons why MMT, which has been around for decades, is in the spotlight and challenging economic orthodoxy.
I've been thru Smith's article line by line. He does get one criticism of Stephanie Kelton's book half right. But otherwise his article is nonsense. See articel on my blog:
ReplyDeletehttps://ralphanomics.blogspot.com/2020/08/david-smiths-incompetent-criticisms-of.html
Except the MMT School apparently can't imagine:
ReplyDelete1) that the public should be able to use their Nation's fiat in account form.
2) that large users/hoarders of fiat should be charged for it.
3) an equal Citizen's Dividend to replace all fiat creation for private interests.
4) that all other privileges of banks, e.g. deposit guarantees, should be abolished too.
Shorter: The MMT School can't imagine equal protection under the law when it comes to fiat creation and banking.