ThirdTerm wrote:While most economists still dismiss MMT as a crank theory, modern monetary theory (MMT) is nothing new or modern. It was tried in Weimar Germany and Edo Japan, which resulted in uncontrollable hyperinflation. In both cases, they needed to start fresh by overthrowing old governments, with Nazy Germany and Meiji Japan, respectively. Under new systems, they could cancel out existing government debts and obligations. The proponents of MMT argue that the government can print money as much as it needs to fund government-related activities or projects without worrying about inflation or debts. The Mugabe government was also printing money to finance military involvement in the Democratic Republic of the Congo in 2000. With Mugabe's excessive money creation, the inflation rate in Zimbabwe reached 1.5 million percent.
I don't know about Edo Japan, but for the Wiemar Republic you are plain wrong. Germany lost WWI and the treaty functionally created a huge foreign debt that Ger. hhad to make payment on. MMT excludes nations with foreign debt from their list of nations that can deficit spend without worrying.
. . MMT also says that nations with a fiat currency, no foreign debt, and float the currency are CONSTRAINED by what resources & labor the nation can produce or buy. However, such fiat nations are NOT constrained by financial considerations. So, such nations can NOT 'print'
or issue currency up to what it "needs" to spend. They are constrained by real things and workers who can work.
. . Zimbabwe crashed its food production. So, it had to try to buy foreign food. The problem was much more the "too little stuff" and not so much the "too much money".
ThirdTerm quoted this: The central idea of MMT is that governments with a fiat currency system can and should print (or create with a few keystrokes in today's digital age) 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.
Traditional thinking says such spending would be fiscally irresponsible as the debt would balloon and inflation would skyrocket.
But according to MMT, a large government debt isn't the precursor to collapse we have been led to believe it is, countries like the U.S. can sustain much greater deficits without cause for concern, and in fact a small deficit or surplus can be extremely harmful and cause a recession since deficit spending is what builds people's savings.
https://www.investopedia.com/modern-mon ... mt-4588060
Like I said above. "Need"
is not what MMTers say.
So, this whole post is in error about what MMT actually says. And it doesn't matter what some secondary source says. What matters is what MMTers actually say. It isn't hard to find an MMTer to read. I have provided you-all with several links Dr. Bill Mitchell's blog which has hundreds of articles to read. I have earlier provided you-all with YouTube links to videos by MMTers if you choose not to read.
. . so, don't believe this post, it is wrong, and easy to prove wrong.