Tally Sticks

Modern economics is a circus, and proponents of MMT are the clowns. MMT proponents dress up inflationary financing in academic jargon, but you're witnessing the same monetary snake oil that governments have peddled for centuries. Every empire from Rome to Weimar told citizens they could print their way to prosperity. The Romans debased their denarius. John Law flooded France with paper livres in 1720. The Continentals became worthless by 1781. Modern Monetary Theory repackages this ancient temptation with PhD credentials and colorful charts. Stephanie Kelton and her disciples claim deficits don't matter because the government creates dollars. They argue inflation only appears when you hit "resource constraints." But this ignores how money creation distorts price signals from day one. When the Fed conjures $3 trillion in 2020, those dollars don't sit idle waiting for full employment. They bid up assets, reward speculation over production, and transfer wealth from savers to borrowers. The MMT crowd loves pointing to Japan's debt-to-GDP ratio above 250% without hyperinflation. Yet Japan suffered two lost decades of stagnation while the Bank of Japan propped up zombie corporations. Japanese households saw their purchasing power erode as real wages stagnated and asset bubbles inflated. You call that success? Money printing doesn't create wealth: it redistributes it. Every dollar the Treasury spends into existence represents resources diverted from private hands to political priorities. The Pentagon gets its $800 billion budget whether or not taxpayers can afford it. Zimbabwe's central bank also believed it could print without consequence until inflation hit 89.7 sextillion percent in 2008. The Fed just has better marketing.

MMT/post-keynesian types redefine well understood concepts to prop up their arbitrary perspective. But why is money best understood as a tax credit? What's the economic function they try to capture with this redefining - and why? What's the gain of this new definition?

Some people seem to think that if the government just paid people, this would solve poverty. But what would wealth look like in a world with abundant currency but without producing goods and services?

Unfortunately - MMT is a conspiracy theory, a half-baked idea of how money and fiscal policy operates which is so divorced from human behaviour, current affairs, and the minutiae of how our systems function, that it should be roundly laughed at (which in serious economic and academic circles, it is). For example - if you claim that "they" (whoever "they" are) want more privatisations, I'd ask why it is that this government have moved to nationalise (or move against the marketisation of) railways, steel, health-services, schools, energy, etc. Likewise, the idea that they are reducing public services is laughable. If Kelton, Murphy, et al, were to be correct, we would not have seen Liz Truss removed when she moved to massively increase the deficit -- just as they have no answer to inflation or the maleffects of taxation which is, almost unilaterally, demonstrated to curtail consumer power and investment. If MMT really was not a conspiracy theory, I would like to see it used in public policy somewhere on planet earth. I'm still waiting, as I'm sure, so are you.