Bloomberg published an article by Michael Strain (director of economic policy studies at the American Enterprise Institute, a conservative think-tank) on January 17 entitled "Modern Monetary Theory is a Joke That's Not Funny." As a convert from the "tax-and-spend" theory to MMT (Modern Monetary Theory), I believe there are some major misunderstandings in this article that deserve correction and deeper examination.
For 40 plus years, the neoliberal era has reigned. During that time, people have had little by way of resistance from the lies, deceit and self imposed prisons of ineffectual domestic governance and austerity. The lies were baked into the school system, newspapers, sit coms, political debates even cartoons took the ideas of neoliberalism into the hearts and minds of our children...the people.
Dear non-MMT economists, I’m sorry that your feelings are getting hurt lately. I know you think all MMT advocates act and speak as one, so here, let me treat you all as one entity and tell you on behalf of all of us, why sometimes we might come across a bit testy. We study, we learn, the clock is ticking. We lose our jobs, our standard of living declines, our public services are deliberately underfunded to the point of collapse and those least able to fend for themselves in our communities suffer and die. Year on year, the vulnerable suffer and die because of some numbers on a spreadsheet at a central bank, and the way you talk about them. No-one is paying us to learn. No one is paying us a nice salary to unquestioningly repeat orthodoxies, or we’d all be calm like you. Some of us aren’t getting paid for anything anymore, no matter what we do. (And you know that’s a policy choice, right? There’s no unemployment in nature? Monetary systems create unemployment. Of course, you know that. You guys are smart. You know everything.) We study, we learn, we search for answers. While one group of politicians destroys our society, another group of politicians waits in opposition (armed with the same economic framework as our antagonists - the one you keep handing them) to do the same thing in a “kinder” way. Politicians are ripping out the backbone of our civilisation. Because of debt. Because insolvency. Because of inflation. Because of the Phillips curve. Because “the government is like a household +has to balance its books”. Politicians do destructive things because you gave them permission. Then we discover the work of Warren Mosler, Bill Mitchell, L. Randall Wray, Stephanie Kelton, Pavlina Tcherneva, Steven Hail, Ellis Winningham... Economists who are actually bothered about changing public consciousness around economics. Because it’s a matter of life and death. We learn MMT. We learn that monetarily sovereign governments can never “run out of money” - the very fallacy that policies of austerity were founded on, which persist to this day. We come to you and call you out on your complicity with orthodoxy. Your response to MMT: “Oh yeah, what you’re saying is nothing new, we knew this all along...” Oh did you? Our response to you is: Where. The. Fuck. Were. You? Because we looked, and we found bullshit, and then we found MMT. You guys must’ve been writing your MMT columns so they looked like bullshit. Sorry for not picking up on that. Our political systems are falling prey to right-wing demagogues who promise a new way forward, women and minorities suffer and die in this new political climate - in large part because all you have for the would-be progressive community is TINA. Anyway, if you’re insulted, get used to it. Welcome to the world of people noticing what you do and the effect it has, and holding you accountable. Thanks for everything, but if the accountability and emotion are getting to you, and you don’t feel like you can write another word ever again, never mind, I guarantee the world will do just fine. Yours, All Of MMT xx
Steve welcomes Steven Hail to discuss the results of the IPPC report. The report findings are very discouraging, showing significant changes in the climate with warming at 2 degrees Celsius above pre-Industrial carbon levels. We are currently 1 degree Celsius above pre-industrial carbon levels.
Steven Grumbine interviews Professor Bill Mitchell about the “Theory” in Modern Monetary Theory, once again demonstrating that the two of them can make even complicated economic concepts accessible to the layperson. In this video, they take on several of the predominant criticisms of MMT.
Accelerating disseminated economic inequality is a disease of the monetary system gripping the American economy. This paper examines the mechanism of that disease in terms familiar to the physician. First an examination of the normal physiology, how energy and information flow through the properly-functioning system, then the malfunctions in the system are studied, the pathophysiology illucidated and that directs treatment. The normal physiology of the US monetary system is thoroughly described in Modern Monetary Theory (MMT). When the problem is studied through the combined lenses of physiology and MMT, it becomes clear that the structure of the federal taxation system itself is most responsible for todays exploding growth in economic inequality. Following the discussion, four "prescriptions" are offered that would produce radical and fundamental changes in the way federal taxes are structured and imposed.
This MMT tutorial provides short answers to several questions, such as: What is money? Where does it come from? Can the government go broke? What is the national debt? What are taxes for? Why not have a balanced budget? What happened to Greece and Zimbabwe? And, why should I learn MMT?
"As far as what specifically would happen if the world stopped using the United States dollar for oil? The answer is, “Very little.””
America's current "national debt" is tallied to be $21.5 trillion. When politicians and economic pundits talk (worry, fret, wring their hands, gnash their teeth) about this "debt" they implicitly assume—along with their listeners, readers, and potential voters—that this fantastic sum will eventually have to be paid back. That's what happens with debts, right? Someone calls them due!
... my message was not getting through. Telling people point blank that taxes do not fund spending always leads to a change in subject. It always leads away from what is so very important about MMT. Which is that MMT describes how macroeconomics operates in the modern world.
When we talk about MMT, we almost invariably hear at least one person who argues that their tax money does in fact fund federal spending, and that we're crazy for peddling this nonsense. The conversation then turns to the 2018 national defense budget. That's a good place for it to go.
You must be diligent in order to get the message out about #MMT
My purpose here is to spur the development and refinement of the conversation already going on about how to better disseminate knowledge and acceptance of MMT.
While Flint’s problems surely run deeper than its lack of local tax revenue, it’s difficult to overstate what a substantial injection of capital could do for the city. The question: where does Flint “find” the money? Enter Modern Monetary Theory.
What we must learn from Pasteur's example is the bravery to wield truth as a weapon against well-established lies, and the fortitude to persevere, even when the odds are stacked against us. For no matter how high the odds are stacked, the stakes are even higher.
The mainstream voices—the economists and journalists and political leaders—thrive on this question of how to divvy up the pot of “money” that America, by some inexplicable process, has been allocated to have. Staking out positions in this allocation argument is their career and sustenance. To take their argument away (by suggesting the pot of “money” is, in fact, expandable—as needed—by the direct sovereign spending of fiat-currency) threatens to leave them marginalized and irrelevant; even worse: possibly unemployed?
It is clear we are in the middle of a communication breakdown in this country and our road forward must be led by creative people with innovative ideas, not career politicians with regressive austerity measures. Understanding Modern Monetary Theory is how we can achieve this, and communicating that understanding is key.
It's not about entitlement, it's about survival.
Modern Monetary Theory (MMT) represents a lens from which to view the various operational levers within the macroeconomy. It is simply the observable facts about how the monetary system works. Not "believing in" MMT is, in essence, denying reality.
The importance of this is not simply that the U.S. government no longer must keep enough gold in its vaults to back up its money supply. The importance lies in a profound conceptual shift about what money is—and how a modern, democratic society can use that new understanding to address public needs and pursue collective goals.