Posted fifth edition, updated May 30, 2021; July 01, 2021; updated October 2021
There is a lot of confusion about how the government works: what the government is doing with taxes, borrowing money, increasing the national debt, inflation [which describes the gradual rise in prices and slow decline in purchasing power of your dollars over time] and continuously printing money without any collateral behind it. Much of the confusion and misunderstanding happens when monetary theorists get carried away with many detailed facets of the new money theory and lose the attention of the listener or reader. They fail to explain the theory in simplistic manner that the lay public can understand. This is what I am trying to do in this article.
Now there is a new challenger to the traditional monetary system of how government should work Casey reserch: Interview with David Stockman 2012 and how the government could use money to finance an economy, national debt, taxation, projects and high finance! It is Modern Monetary Theory [MMT]. Just what is MMT? And why is it important?
Modern Monetary Theory [MMT] says that a sovereign country [supreme power] does not need to borrow money as it can print its own money as it is needed. D’Souza summarizes the central idea of MMT as governments having a fiat currency system ["fiat" money is government-issued currency that isn't backed by any commodity, such as gold.] under their control and can print as much money as they need to spend because they cannot go broke or be insolvent unless a political decision to do so is taken." Coy: Guide to MMT 2019 D'Souza: MMT 2021 D'Souza further argues that MMT is perceived as a solution for progressive government legislation such as universal healthcare, ultrastructure and other public programs when governments like Canada and United Kingdom claim to not have enough money to fund essential projects. D'Souza: MMT 2021
To explain what MMT is, we need to start with what most of us are familiar with .... the traditional monetary system. Like most persons, this author was raised to live by balancing my family budget and trying to live within my means. He also believed that the federal government should also live within its means. balance the national budget and repay the money it borrows. This is traditional 'balancing the budget' economics that is taught at universities.
When a country government needed money in the past, it usually borrowed money from the International Monetary Fund [IMF] and deposited it in its central bank for distribution to smaller banks. Governments also collected taxes as revenue.
MMT is an evolving theory and there are still a lot of building blocks to be added to MMT to make it more functional and transparent. MMT applies only to national governments like USA, Canada, Australia, United Kingdom, and Japan because that is the level of government that has the power to print its own currency or money. States, provinces and cities do not have the power to print money.
To get an understanding of what MMT is and how it works, you can view an excellent video:
Stephanie Kelton, Modern monetary theory; Length = 9:10 mns.
Source: video by economist Stephanie Kelton
MMT says that a government doesn't need to sell bonds to borrow money, since it can create its own money. D'Souza: MMT 2021 D'Souza argues that MMT is a solution for progressive government legislation such as universal healthcare, infrastructures, unemployment and other public programs for which governments like Canada and United Kingdom claim to not have enough money to fund. D'Souza: MMT 2021
Historical background:
Modern Monetary Theory is not a new theory. It was pioneered by American economist and theorist Warren Mosler in 1992, along with Bill Mitchell, a university professor based in Australia and a key developer of the theory. MMT is rooted in the work of economists such as Hyman Minsky, Abba Lerner, and Wynne Godley during the 20th century. More recently, economists such as Bill Mitchell, Randall Wray, and Stephanie Kelton have contributed to its development. Edwards: Modern Monetery Theory 2020
Basically, the numerous theorists added their ideas as building blocks to evolve a new theory of money and how governments can use money. Klijn: MMT with Bill Mitchell 2019 But none have explained how all the components of MMT work together in a way that the general public can understand.
But the new economic theory raises a question. If creating new money out of thin air creates inflation, why was there no inflation when Ben Bernanke created $1 trillion in assets to save the banks during the financial crisis of 2008? [$1 trillion is actually the lower end of the bailout estimate.] To understand this dilemma, we need to review what happened economically in many countries over the past 100 years:
Germany 1918: After the German government was defeat after World War I, the allies insisted that the German government pay reparations far in excess of the ability of the shattered German economy to pay. So the German government printed money to pay its bills. Overlooked was that the war had destroyed Germany's productive capacity. German economy could not produce enough essential products to sell and pay for the war debt. Excess money contributed to hyperinflation and people in Germany needed wheelbarrows full of cash just to buy loaves of bread. Edwards: Modern Monetery Theory 2020 MMT argues that this was a classic example of the lack or scarcity of goods or labor, or capacity that triggered hyperinflation.
United States Depression of the 1930's: In 1933, President Franklin Roosevelt began rolling out his "New Deal," which provided a wage to unemployed people to build schools, hospitals, airports, roads, bridges and other infrastructure. He printed money. And during World War II most Western governments spent heavily with printed money on military and armaments to finance the war and restore the economy in Europe. The new deal put many people to work. Edwards: Modern Monetery Theory 2020 President Roosevelt never repaid the debt of 1933 or WW II.
Zimbabwe: Another example is the collapse of the Zimbabwe economy in the late 1990s and mid 2000s, when Robert Mugabe's regime printed ever-more Zimbabwean dollars. Mugabe forced white farmers off their land and gave their farms to the soldiers who had fought to gain Zimbabwe's independence from Britain. The problem was these soldiers were not very good at farming. Production declined suddenly. Estimates vary, but Zimbabwe went from being the food-exporting "bread-basket of Africa" to a nation that was unable to feed itself in a matter of months. Edwards: Modern Monetery Theory 2020 According to Bill Mitchell, a professor of economics at University of Newcastle, Australia, who supports MMT. "Of course if you keep spending and you can't produce goods to meet that spending you'll get inflation, and if you keep spending on top of that you'll get hyperinflation."
Latin America: Some versions of MMT have been tried in Argentina, Bolivia, Brazil, Chile, Ecuador, Nicaragua, Peru, and Venezuela with major central bank–financed fiscal expansions taking place under populist regimes, and all of them ended up badly, with runaway inflation, huge currency devaluations, and precipitous real wage declines. Information about two countries provide information about the shortcomings of their experimenting with MMT. Edwards: MMT & Latin America 2019
Argentina: is an example of government not understanding how to balance a country's economy:
Argentina has a long history of economic crises. It has defaulted on its external debt (debt held by foreigners) nine times since independence in 1816. It took 15 years to resolve Argentina’s default in 2001. Argentina has also entered into 21 International Monetary Fund [IMF] programs since joining in 1956. The current economic crisis facing Argentina stems from both longstanding issues and recent developments. A series of loans from the International Monetary Fund ended in disasters. At the end of December 2001, in a climate of severe political and social unrest, the country partially defaulted on its international obligations in January 2002.
In 2002, Argentina introduced the Jefes Programme, which offered a job to the head of every household and paid a basic wage, financed by borrowing money. Jefes participants worked on local community projects such as building and maintaining schools; hospitals; community centers; baking; sewing clothing; recycling; repairing sewers and sidewalks. Argentina could not pay its debt and went financially broke.
Argentina’s economy contracted by 2.2% in 2019, whereas the IMF program initially envisioned a return to growth in 2019. The peso’s devaluation made it hard to tame inflation (with consumer prices growing by 54% by end- 2019) and increased the real value of Argentina’s debt (mostly denominated in dollars), accounting for about 76% of GDP in 2019. Nelson: Argentina'seconomic crises 2020
The COVID-19 pandemic further increased economic pressure on the government. Argentina’s economy was forecast to contract by 5.7% in 2020, and the government was on track to run a budget deficit. The central bank printed money to finance the government, which risked further inflation. But lack of balance between printing money, using it to stimulate nearly full employment and producing goods people need, has caused hyperinflation. Argentina went into bankruptcy and its ninth default. Nelson: Argentina'seconomic crises 2020 Argentina is a classic example of not understanding how to balance it's budget with modern economics.
Venezuela 2000:Venezuela's economy had some aspects of MMT but was badly managed because the politicians did not understand MMT and went into debt. Since oil was discovered in the country in the 1920s, oil has taken Venezuela on an exhilarating but dangerous boom-and-bust ride that offers lessons for other resource-rich states. Decades of poor governance have driven what was once one of Latin America’s most prosperous countries to economic and political ruin since 2000. The country's politicians badly managed oil profits, as the politicians did not understand how to balance modern economics and went into debt. This resulted in hyperinflation and 95% of the population now live in poverty. Cheatham: Rise and fall of oi rich Venezuela 2021
Japan 2000: Japan's economy has had difficulty balancing its economy since 1990.
It is becoming more acute as its manufacturing of gas-powered cars are being replaced by electronic vehicles that require fewer parts. In addition to this, Japan's declining and aging population has impacted on it's declining economy. Japan relies on importing many manufacturing metals as well as oil and about 25 % of its food. This makes it difficult for Japan to balance out the needs of its people and the economy.
Japan relies on its central bank to prop up its economy. Government spending is around 16.4% of the country's GDP. But Japan can't finance this through taxes because that would slow growth even more. Therefore, in order to spur growth, the Bank of Japan strives to keep interest rates low. It does this by continuously buying government debt, a tactic similar to the U.S. quantitative easing program. Japan has fallen into a liquidity trap, which is an economic situation when the cost of food and housing is too high, and everyone hoards money instead of investing or spending it. It occurs when interest rates are zero or during a recession. Amadeo: Japan's ecomony 2021
Japan is currently running a government debt of close to 240% of GDP and has not experienced runaway inflation for over a decade. The deficit implies that the government has spent a sum vastly greater than the entire value of the Japanese economy, but has not been able to take in enough tax revenue to cover that expenditure, and is thus floating it with debt. The inflation rate in Japan is currently a negative -0.29%.
Japan’s decades of experience offer an example of how a society can live with low interest rates. Japan is now the best case study of what happens in an environment of persistent low inflation and interest rates; a situation much of the developed world is facing in the aftermath of the Covid-19 pandemic. Harding: Japan's low rates & inflation 2020
Europe 2008: In Europe, Sweden, Denmark, Switzerland, and the 19 countries in the euro currency area imposed negative interest rates to flush money out of bank accounts, in hopes of generating inflation. At the same time, the European Central Bank flooded the continent with $2.5 trillion in "quantitive easing" [new money, but with a fancy name] But inflation did not happen. This is an example of the governments listening to several MMT economists and balancing the economy. Edwards: Modern Monetery Theory 2020
United States 2008:The US federal government was forced to lower interest rates close to zero in order to counter deflation in the US while Bernanke was adding $1 trillion to US bank accounts. in 2008. Many economists predicted that the Fed's ballooning cash creation would require more dollars. But it didn't happen.
Numerous US Federal Economic chairpersons [ Alan Greenspan in 2005; Ben Bernanke in 2009 ] have used some form of MMT to finance presidential bailouts of banks, and auto production problems with success. In times of weak economies, these financial advisors to presidents admitted that printing money was preferred to borrowing money. Going into debt was acceptable. The government can print all the money it needs, and nothing bad happens. Edwards: Modern Monetery Theory 2020 These admissions — that creating money out of thin air is not by itself dangerous and may even be advantageous — are the key principles to understanding Modern Monetary Theory.
Recently, Treasury Secretary Janet Yellen has said that, so long as interest rates stay at historic lows, the government should spend what's necessary to power the economic recovery. That's a sharp reversal from the Obama administration's approach, which was hindered by fears of deficit spending and the growing national debt pile.
During the 2016-2020 presidential election, presidential candidate Bernie Sanders was advised by Stephanie Kelton, an economics professor at Stony Brook University, to consider Modern Monetary Theory as a way of fixing a broken US economy. Ofcourse the general public and most politicians did not understand this new theory then and even now in 2021.
Pulitzer prize winner in economics, Paul Krugman, cautiously supports the idea of MMT. Winck: Krugman supports MMT 2021
The brief review of the history of governments in the past points out that many countries used some form of MMT to temporarily revive their economies, but not understanding the full impact of what they were doing. Sebastian Edwards points out that Latin governments worked in adhering to certain constraining economic policies that hindered implementing some form of MMT. Edwards: MMT & Latin America 2019 Central banks in Venezuela, Zimbabwe, and Argentina all printed money to please politicians in recent years, resulting in hyperinflation and economic collapse. Edwards: Modern Monetery Theory 2020 President Roosevelt used some form of it to pay for armament during world war II and also funding infrastructure programs during the 1930’s economic depression.
Politicians and most of their economic advisors simply did not understand the complexity of financing, debt, printing money, production of essential goods, the need for near full employment, work economics and how all these are linked to inflation. When the government spends too little while collecting taxes, then unemployment is the result of government spending.
MMT is a significant departure from the traditional view of economics taught in most business schools. MMT argues that traditional government "balancing its budget" is causing a lack of investment, an underperforming economy, and all the unemployment and lost opportunities that go along with that. Instead, MMT says that the government ought to be able to create all the new money it needs as long as that does not generate inflation: Edwards: Modern Monetery Theory 2020
Countries can create and spend their own money, and that on its own is not a bad thing. Edwards: Modern Monetery Theory 2020 In traditional economics, the notion of printing money to solve a country's problems is almost universally regarded as a bad idea. Yet MMT proposes that money creation ought to be a useful economic tool, and that doing so does not automatically devalue the currency, lead to inflation, or economic chaos.
As Greenspan has stated: It's not the money that's the problem. It's whether the economy has enough people and goods to supply the demand that cash creates. Edwards: Modern Monetery Theory 2020
Taxation is deflationary and bad: Traditionally, economists see the role of government as setting taxes in order to generate more government revenue. Tax revenue is then used to pay for the things government needs to do: police, firefighters, roads and so on. If the government needs more money, then it has traditionally borrowed money, going into debt. This conception likens the government to a household budget: It cannot spend money until it has taken in money. No jobs and no revenue as taxes. But MMT perceives government economy as different from business or family economics.
MMT on the government is not like a family household:
MMT-ers argue that the "federal household budget" is exactly backwards to the family budget, because the government has to create the money first in order to spend it.
From this perspective, deficits aren't the problem. They're the solution. MMT has gained popularity throughout the years when a government has to step in to help relieve the economy in times of financial duress.
As a result of the USA government pumping a lot of money into the economy, there was more cash is in circulation – much of which was poured into the stock market [making the stock market look good]. Throughout 2020, a lot of that money went into stocks and exchange-traded funds, in particular. This investing activity propped up asset prices, raising value of stocks, and the stock market surged to all-time highs. Likos: What is MMT? 2021
This financial support from the government, which is seen as an expression of MMT, ultimately worked. "There's a belief that this money is going to be spent over the next several years, and that's why the stock market is doing so well in anticipation of all of this growth."
MMT has been embraced by progressives, like congresswoman Alexandria Ocasio-Cortez, who see MMT as a framework for increased government spending that could help finance initiatives such as the Green New Deal policy on climate change.
More recently, in March 2020, the government had an even deeper and larger-scale response compared to that of the Great Recession in response to the global health crisis. USA Federal authorities used fiscal policy to address the pandemic-induced recession through stimulus relief packages. The first was with the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, a $2.2 trillion economic stimulus bill signed into law in response to the economic fallout of the pandemic.
The new government economic system works differently from the family budget! The government has the ability to create new cash and wipe away its deficits anytime it wants, without raising taxes as long as it keeps inflation at a low rate.
Modern Monetary Theory [MMT] is an interesting and confusing one. No one in government circles is explaining it to the general public. Even when the federal government is talking about inflation, there is no mention of MMT and how the federal government is using money. They appear to be keeping it a secret while printing money, going into federal debt, using the money to sponsor funding vaccinations, paying people stimulus installments of $1200, jobs, fixing climate change, education, infrastructure, bailing out the frail health care system and so on. All this is supposed to work provided the printed money is used by the economy to produce essential goods and keep employment at near top level while keeping the inflation near about 0 to 1%. The federal government can continue to print money even if it goes into debt while all this is taking place. If inflation rises above 2%, then the entire MMT system begins to shake and crumble! Hyperinflation occurs when inflation soars above 5 plus % and ruins the MMT. The federal government has no intention of paying off the mounting debt.
Below is a diagram highlighting the components, as discussed by numerous theorists of Modern Monetary Theory:
Here are eight basic components of the MMT theory that a government needs to implement:
The eight components were derived from an extensive review of the literature. The components were seldom mentioned collectively or in a balanced fashion. There may be more MMT features, such as how society reacts to government controls and government spending printed money on projects not deemed essential for the public [like bolstering the stock market].
Government politicians need to implement all MMT components in a balanced format. Government politicians need to be knowledgeable and have a sense of moral leadership. The basic difference between individual or family budget and government budget is that individuals and families use money to make profit money while MMT governments use money to balance the economy.
MMT balance needs to be explained: Think of MMT as a disciplined formula or recipe that requires government printing money, as needed, to stimulate full employment that, in turn, the government uses the printed money to stimulate production of essential goods that the general public needs, along with manufacturing and trade; that are all controlled by the government with low inflation. Likos: What is MMT? 2021 Such a formula for using MMT requires valuing priorities for spending and controlling inflation. This balancing act is what was lacking in Latin American countries. Balance is delicate, very sensitive, requires value or morality structure and needs discipline and timing to work properly. Timing everything ... printing money only as needed, companies hiring workers on time, acquiring adequate supplies as needed, keeping cost of essential consumer goods low and available, keeping inflation low for everyone has to be timely balance, including congress passing bills to enact the entire process expeditiously.
Harvard professor, Gregory Mankiw, discusses many of the sensitive links between the components of Modern Monetary Theory that have a bearing on the outcomes of full employment versus partial unemployment or overproduction of essential goods that can cause inflationary changes. These are examples of the kind of links affecting balance of MMT that are difficult to predict and control. Mankiw: Skeptical of MMT 2019
Balance is delicate, very sensitive, requires value or morality structure [no political corruption] and needs timing and discipline to work properly.
Mitchell illustrates some of the balance needed in applying MMT to the United States government: “The Green New Deal would be a massive transformation of real resource usage in our economies and we are going to have to deprive existing users of resources, such as [users of] coal, internal combustion car manufacturers, farmers using land for crop uses other than food that is unsustainable and agricultural fossil fertilizers. There is going to have to be a massive redirection of resources. That is not an easy thing to do. Government funding is not the problem; instead it is a societal or people shift that is the challenge of the Green New Deal. It has to be very well managed and is a very politically delicate process.” Klijn: MMT with Bill Mitchell 2019
Mitchell's pointing out that society, the general public, is the hidden monkey wrench in the MMT machinery. This is not discussed in the public sector as corporations, wealthy businesses and corrupt politicians that can disrupt balance. This balancing act is what was lacking in Latin American and African countries.
The key to United States using MMT: Inflation control should work as long as the US dollar is the main media of world exchange and trade. The USA dollar has been getting strong competition as the world trading dollar for the past 10 years. But should the US dollar lose its value in a free trade economy, then it becomes devalued, and inflation will set in very quickly. MMT will sputter and most likely not work. This is when economic recession sets in and the country will have to declare bankruptcy. This is a secret kept from the general public by politicians and economic advisors.
My take on all of this is that if the public is kept in the dark about the use of MMT, as it has been for over 100 years while some form of MMT has been going on, then the public is uninformed and cannot make good election decisions. Majority of the public does not understand MMT and the federal government and mass media are not explaining it. When this happens, democracy will falter and not work.
But reality tells me that the 2020 world pandemic conditions have disrupted cooperation and trade among countries, causing chaos. There are also unforeseen disasters of paramount proportions, such as natural earthquakes, forest fires, floods, complex technology, ransom- ware or another pandemic, any one of which could paralyze a country or world economy and disrupt MMT and traditional economies. Humans have not been very intelligent or wise in preventing world disasters in the past. We have entered a new era in the world that is very uncertain.
Most of the 90+ third world countries can print their own currency but cannot balance out production of goods and high employment with printing usable money and keep inflation between 0 and 1%. Most political leaders are hindered by lack of understanding how MMT works. This will certainly affect implementing MMT and restoring world trade. Such disparity is the uncertain future of the world. So MMT may not last forever and we may have to face the reality of the federal government paying off the debt and thus facing an economic recession in the near future.
Summary: It should be obvious that MMT is not magic; it has limitations, such as the full employment/production of essential goods/inflation boundary balance. If it is to work, MMT has to work within its limits and these limits at this time are foggy, not clearly defined, it lacks the test of time in poor and rich countries and it lacks transparency.
Our government actions today resemble Modern Monetary Theory. Today, banks seldom use paper money; instead banks use digital computer currency, making it harder to understand how money is moved around in hidden fashion, making this process less transparent. Winck: Krugman supports MMT 2021 The pandemic of 2020 has moved MMT to dead center as the actual monetary policy of the United States. As already mentioned, the new economy, MMT, should work as long as the government is able to have farming, technology, industry, corporations and manufacturing coordinated to supply ample essential goods, products that people need and keep workers almost fully employed; with social unrest under control and keep inflation low. Government can use money that it prints as needed to stimulate the economy. The end result would be workers and families having adequate food, housing, education, health care, work and so on; and a reasonable standard of living. Prosperity lasts as long as inflation is low in a balanced economy that is controlled by the government.
This pandemic has moved MMT from the fringes to the dead center as the actual monetary policy of the United States.
After research and reading numerous articles about MMT this author became aware that President Biden, like previous presidents, has been using using a hybrid form [a mix of the new with the old] to finance his programs. But it is not called MMT. Shocking but true!
President Biden is using MMT for recovery in 2021: This pandemic has moved MMT as the actual monetary policy of the United States. President Joe Biden has proposed over $6 trillion [probably closer to $10 trillion] of printed dollars in spending on recovery from the pandemic, providing free COVID-19 vaccines, proposing to fix the causes of climate change, stimulus job packages, fixing infrastructures and health care programs; as well as several tax increases set to pay for most of the plans. The economy appears to be slowly reviving and the COVID-19 infection is being slowly brought under control, although Wall Street is in jitters. Biden's government is continuing to print more new money. Krugman believes that passing more spending packages while leaving taxes untouched could keep the US from entering a demand-starved recovery like that seen during the 1930 Great Recession. Winck: Krugman supports MMT 2021
Meanwhile, there is fear of run-away, uncontrolled inflation. MMT argues that it is the lack of goods, labor or jobs, or capacity — that triggers inflation. So far so good for Biden!
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Update: Inflation Unstable and Rising Inflation is back As of May 25, 2021, a booming economy has caused the price of essential goods: lumber, food, gasoline and shortage of workers, combining to cause a rising inflation. The federal government has difficulty controlling inflation. President Biden is proposing back to work and green jobs legislation but republican and democratic politicians are slow in passing it. When congress and senate finally do pass a proposed bill, it takes three to six months or longer to implement it. This makes government too slow in implementing back to work proposals, causing inflation to rise. A rising inflation upsets the MMT. This is what has been happening since March, 2021. The government has difficulty controlling inflation, essential employment, price controls and so on in a free money market. |
Caution: This article does not cover all the details of MMT. Many detailed issues, such as natural disasters, a drop in the purchasing power of the USA dollar have been left out and not integrated into the discipline. Another is morality .... what is most valuable spending for the good of the general population, is difficult to implement and control. The balance of timing all aspects of MMT is essential control and this has not been mastered as yet. The most difficult and unpredictable is the human factor .... how people and society will respond and act.
Although the big picture of MMT has been covered, it is in the domino-effect pieces of the economical theory, misunderstood by most, that adds to a lot of controversy about MMT. All aspects of MMT have not been packaged as a political and balanced economic solution to the hunger, food, health care and employment problems of rich and poor world countries. MMT is very complex. MMT needs to be tested over long periods of time with all countries. Very few countries are successful in printing their own currency to deal with financing food, health care, education, infrastructure and unemployment and at the same time control inflation.
Rebutal to MMT: MMT has some good ideas about how money should be used. In spite of supporters of MMT painting a rosy picture that MMT will use money to solve economic and social problems, many steeped in traditional monetary system disagree. Supporters of MMT are challenged by the old guards of the traditional money system. Here are a few notable scholars against MMT:
Investor Doug Casey and former Reagan Budget Director and Congressman David Stockman both reject MMT as a solution to the economic problems of United States and the world. Casey: MMT will destroy money 2021 Casey reserch: Interview with David Stockman 2012
"It’s not a question of whether MMT will work or not work. It won’t. It will work about as well as the economic policies of Venezuela and Zimbabwe, or Argentina. These schemes have never worked in all of history. They result in a vastly lower standard of living, along with social strife. MMT is about radically increased government control. The argument shouldn’t be over whether MMT will “work” or not. The argument should be about whether it’s moral and proper for people in the government – whether elected or appointed – to print money to change the economy into something that suits them better."
Jack Purdy comments that not only has MMT has not endured the tests of time, but it has demonstrated a propensity for mismanagement, as happened in Argentina and Venezuela. He points out that "a new form of private money, bitcoin, has emerged that challenges fiat or government printing of money." Purdy: bitcoin challenges MMT 2019
A published scholar on the US monetary system, Steve Brown, discusses how the United States traditional monetary system works, how the government uses money and rejects MMT. Brown: Rebuttal to MMT 2019
This article has pointed out to the difficulty of MMT to balance all the components in MMT in actual practice, as well as lack of transparency of the system. Today's MMT sovereign money is — in the grand scheme of monetary history — an experiment full of holes.
That is why this author calls for extensive research in using MMT applicable to all countries over extended periods of time.
The author apologizes for this lengthy article; but MMT is complicated.
References:
Amadeo Kimberly, "Japan's Economy, Abenomics, and Impact on U.S. Economy, 7 Reason's Japan's Economy Is Stuck," U.S. & World Economies, May 09, 2021. Amadeo: Japan's ecomony 2021
Armstrong Phil, "Heterodox Views of Money and Modern Monetary Theory (MMT)," Abstract York College, 2015. Armstrong: View on MMT 2015
Brown Steve, "The Wonderful Wizard Of Money: MMT, A Rebuttal To Modern Monetary Theory," The FRN Daily News Brief, November 10, 2019. Brown: Rebuttal to MMT 2019
Casey Research, "The New Economic Collapse Video: It makes uncomfortable but urgent viewing," Casey Research Technology Team,Interview with former Reagan Budget Director and Congressman David Stockman, July 24, 2012. Casey reserch: Interview with David Stockman 2012
Casey Doug, "Why Modern Monetary Theory Will Destroy Money," International Man, May 7, 2021. Casey: MMT will destroy money 2021
Cheatham Amelia and Rocio Cara Labrador, "Venezuela: The rise and fall of a petrostate," Council on Foreign Relations, January 22, 2021. Cheatham: Rise and fall of oi rich Venezuela 2021
Coy Peter, Katia Dmitrieva and Mathew Boesler, "Warren Buffet hates it. AOC is for it. A beginner's guide to Modern Monetary Theory," Bloomberg Businessweek, March 21, 2019. Coy: Guide to MMT 2019
Edwards Jim and Theron Mohamed, "MMT: Here's a plain-English guide to 'Modern Monetary Theory' and why it's interesting," Insider, Mar 2, 2020. Edwards: Modern Monetery Theory 2020
Edwards, Sebastian, "Modern Monetary Theory: Cautionary Tales from Latin America," CATO JOURNAL VOL. 39 NO. 3, FALL 2019. Edwards: MMT & Latin America 2019
D'Souza Debra and Michael Boyle, "Modern Monetary Theory (MMT)," Investopedia, Feb 23, 2021. D'Souza: MMT 2021
Harding Robin and Chris Giles, "Lessons from Japan: coping with low rates and inflation after the pandemic," Financial Times, November 22, 2020. Harding: Japan's low rates & inflation 2020
Hineman Brinley, "Fact check: Socialist policies alone did not destroy Venezuela's economy in last decade," USA TODAY, August 8, 2020 Hineman: Venezuelan economy 2020
Klijn Wouter, "Back to the Beginnings of MMT In Conversation with Bill Mitchell," Insights - Investment Innovation Institute, June 19, 2019. Klijn: MMT with Bill Mitchell 2019
Likos Paulina, "What Is Modern Monetary Theory (MMT)This theory challenges the way we think about traditional economics," USNews, Jan. 8, 2021. Likos: What is MMT? 2021
Mankiw Gregory, "A Skeptic’s Guide to Modern Monetary Theory," Harvard University, December 12, 2019. Mankiw: Skeptical of MMT 2019
Nelson Rebecca M., "Argentina's economic crisis and default," Congressional Research Service, June 15, 2020. Nelson: Argentina'seconomic crises 2020
Purdy Jack, "Satoshi’s Rebuttal of Modern Monetary Theory," A Monthly Bitcoin Journal, June 3, 2019.
Wikipedia, "Modern Monetary Theory." Wiki: MMT
Winck Ben, "Nobel prize-winning economist Paul Krugman explains why he's more left-wing than the Modern Monetary Theory crowd," Insider, May 16, 2021. Winck: Krugman supports MMT 2021
Wray Randolf, "Modern theory for beginners," YouTube, April 25, 2018. Winck: Modern theory for beginners 2018