{"id":42969,"date":"2019-01-19T18:54:53","date_gmt":"2019-01-19T23:54:53","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42969"},"modified":"2019-01-19T19:00:22","modified_gmt":"2019-01-20T00:00:22","slug":"modern-monetary-theory-is-a-joke-thats-not-funny","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42969","title":{"rendered":"\u2018Modern Monetary Theory\u2019 Is a Joke That\u2019s Not Funny"},"content":{"rendered":"
\n
\n
\n

\u2018Modern Monetary Theory\u2019 Is a Joke That\u2019s Not Funny<\/a><\/h3>\n
\n

Yes, a government that issues its own currency can pay its bills. But piling up debt for no urgent reason\u00a0is lunacy.<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

\n
\n
\n
\n
<\/div>\n<\/div>
There\u2019s a theory behind it. \u00a0 \u00a0 Photographer: Eva Hambach\/AFP\/Getty Images<\/figcaption><\/figure>\n
\n
\n
\n

If you follow the debates over U.S. economic policy, you had probably heard of modern monetary theory well before freshman Democratic Representative Alexandria Ocasio-Cortez spoke<\/a> favorably about it earlier this month.<\/p>\n

If you thought from the start that the whole idea sounded like lunacy, you were right, even if it\u2019s possible to admit some sliver of sympathy for it. So why is MMT, as it is known for short,\u00a0generating such intense interest now?<\/p>\n

First, let\u2019s start with the confusion over what it is. The answer seems to depend on which advocate<\/a> of\u00a0MMT is being asked. It is sometimes a theory of money. MMT is also being discussed in the context of a political program to justify huge increases in social spending. Finally, there is its role as a prescription for macroeconomic policy.<\/div>\n

Even as just an economic theory, it is not settled or fully developed. This makes engaging with it challenging \u2014 even, at times, frustrating<\/a>.<\/p>\n

The bedrock observation of MMT is correct: Any government that issues its own currency can always pay its bills. This observation allows policy makers to show less concern about the budget deficit than is typically the case.<\/p>\n

In fact, MMT is growing in prominence precisely because of its relative lack<\/a>of concern about the size of the deficit. In the years immediately after the Great Recession, which started in December 2007, this aspect of MMT stood in favorable contrast to the position of fiscal-policy centrists and many Republican politicians who called for significant reductions in the deficit at a time of very high unemployment.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\u2018Modern Monetary Theory\u2019 Is a Joke That\u2019s Not Funny Yes, a government that issues its own currency can pay its bills. But piling up debt for no urgent reason\u00a0is lunacy. There\u2019s a theory behind it. \u00a0 \u00a0 Photographer: Eva Hambach\/AFP\/Getty Images If you follow the debates over U.S. economic policy, you had probably heard of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[83,195,309,379,24044,24043,17970,538],"class_list":["post-42969","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bloomberg","tag-debt","tag-fiat-currency","tag-government","tag-michael-r-strain","tag-mmt","tag-modern-monetary-theory","tag-money-printing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42969"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42969\/revisions"}],"predecessor-version":[{"id":42971,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42969\/revisions\/42971"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}