I can certainly see his point. This is why I have asked my MMT authorities if there is some set of rules that they can live with about how much of a deficit a nation can have. Their response is that is depends on so many factors that it is useless to tie the Government's hands with limits.
However, I still think that it would be useful to have some limits on deficit spending. This would make it easier to convince the “fiscal conservatives”** to let us try to use MMT to fine tune the economy.
As a stting point, my thought on this are:
1] When a nation has a trade deficit that means its currency is being taken out of the nation and not returned. This leakage will damage the economy sometime soon. Therefore, the Gov. can have a deficit equal to the current account deficit, which includes money coming into the nation as investments.
2] However, this is not enough, more should be added to the deficit.
This more is the amount that the people and comp. want to save. This leakage will also reduce the GDP sometime soon if it isn't replaced by deficit spending. How much is this? Well, now (for example) insurance comp., etc. are saving Gov. bonds and the people are saving cash. [BTW, banks mostly don't loan out the depositors' money, banks create new money when they make loans.] So, if there is a measure of how much saving is going on then the deficit can equal this amount plus the current account deficit. If we can't measure the saving then the rule might be to set the total Gov. deficit at between 4% & 6% of GDP plus the current account deficit.
3] There needs to be a rule that under no circumstances should the Gov. have a surplus to pay down or (worse) try to payoff the national debt. The national debt can never and should never be paid off, except maybe with magic money that the Gov. creates just for this purpose.
4] If there is inflation of more than 3% then the deficit will need to be (i.e., must be) reduced by cutting spending or increasing taxes. If there is inflation is above 5% in any year or is between 2% and 5% for 3 straight years then the deficit must be reduced. In these cases the deficit needs to be just the current account deficit. This must continue until inflation reaches (goes down to) 1%.
5] If the reduced deficit above does not make inflation be reduced any, then, there must be no deficit until inflation reaches 1%.
6] When inflation reaches 1% then the deficit rule goes back to the total of the current account balance and the saving by the comp. and people.
7] If war has been declared then these rules should always be set aside. They can also be set aside if the budget is approved with a 2/3 vote in both houses of Congress.
.** . It is my considered opinion that fiscal conservatives are usually that way because of some inborn character trait, so we do need to placate them to some extent. At least for some fairly long period of time after MMT starts to be used to allow additional deficit spending.