Taxes create real resource space in which the government can fulfil its socio-economic mandate. Senator Bernie Sanders in his 2016 run for the Democratic presidential nomination, is a staunch advocate of MMT, which promotes the idea that government spending, and deficits as needed, should be used to meet the full employment and inflation mandates currently tasked to the U.S. Federal Reserve. MMT didn’t bail out Wall St and let millions lose their homes. “This isn’t a fight I intend to lose,” she said on Twitter on Tuesday, shortly before Summers appeared on CNBC to say, in reference to Kelton’s theories, that “one thing that every American ought to support are the laws of arithmetic.” The war of words could be dismissed as social media fun and games, except it represents a fundamental debate, gaining intensity ahead of the Democratic presidential nominating contests, over how to finance a “Medicare for All” healthcare restructuring, a “Green New Deal” environmental program, and other initiatives. (Twitter: @StephanieKelton) Professor Kelton, who has written a best-seller on MMT called The Deficit Myth, sees it working this way: The premise of our discussion was this recent explanation of “Modern Monetary Theory” by Stephanie Kelton. The premise of our discussion was this recent explanation of “Modern Monetary Theory” by Stephanie Kelton. Today, “I have a lot of people pushing me, why? “‘Bond markets and foreign exchange markets won’t let us’ is a pretty terrible way to build a case against a political and economic program to save the planet,” she tweeted. What the government actually buys with it has nothing to do with money – or the Fed, for that matter.
In Part-2, we complete our analysis of the theory and the potential ramifications. It's paper or digital money that has no intrinsic value. Mitchell, Wray and Watts Macroeconomics p 323, give a the correct version of the #MMT position on budget aggregates .... John Quiggin's Blog MWW on MMT (from Twitter via Spooler) John Quiggin | Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government In fact, deficits are often necessary and beneficial. That's how it works. Others won't have wrapped their heads around the MMT logic yet. Let's take a closer look.It is challenging the neoliberal economic orthodoxy that has dominated policymaking in Australia, the United States, the United Kingdom and many other countries since the mid-1970s.Firstly, it assumes every country has a "natural rate" of unemployment and it's unwise to try to force the jobless rate below the natural level because inflation (and wages) will rise too quickly. Should borders be open?