{"id":42947,"date":"2019-01-18T19:11:38","date_gmt":"2019-01-19T00:11:38","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42947"},"modified":"2019-01-18T19:11:38","modified_gmt":"2019-01-19T00:11:38","slug":"dont-be-so-sure-hyperinflation-cant-hit-the-u-s","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42947","title":{"rendered":"Don\u2019t Be So Sure Hyperinflation Can\u2019t Hit the U.S."},"content":{"rendered":"
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Don\u2019t Be So Sure Hyperinflation Can\u2019t Hit the U.S.<\/a><\/h3>\n
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Some progressives back piling on even more debt to pay for social programs. That could be risky.<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Marking time. \u00a0Photographer: Ramin Talaie\/Getty Images North America<\/p>\n<\/figcaption><\/figure>\n<\/section>\n

Discussions of big government spending programs often revolve around the question of how to pay for them. For example, Representative Alexandria Ocasio-Cortez touted her proposal for a 70 percent tax rate on income above $10 million by saying<\/a> it would help pay for the Green New Deal, a broad package of environmental and economic initiatives.<\/p>\n

Implicit in this concern is the idea is that government debt shouldn\u2019t get too big. This is a common belief \u2014 polls regularly find<\/a> that Americans are worried about the national debt. The national debt clock<\/a> in Manhattan is a famous symbol of this anxiety. The idea is also formalized in mainstream economic models, which tend to assume that in the long run the government has to balance its books<\/a>. Writing at Brookings Institution, David Wessel expresses<\/a> this conventional wisdom when he declares that \u201cfederal debt cannot grow faster than the economy forever.\u201d<\/p>\n

But what if this is a fallacy? What if the government doesn\u2019t have to pay back what it borrows, now or ever? This is the provocative thesis of an unorthodox economic theory that is rapidly gaining credence on the political left called modern monetary theory<\/a>, or MMT. The concept isn’t new \u2014 economist Abba Lerner endorsed something similar<\/a> in the 1940s, under the name of \u201cfunctional finance.\u201d But the theory has enjoyed a popular resurgence since it was embraced<\/a> by some progressives, who want to enact a federal job guarantee and other ambitious economic plans paid for by government borrowing.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n

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