Modern Monetary Theory (or MMT) is a macroeconomic model that has become popular among some heterodox economists and progressive policymakers, and is often cited by those who favor expanding the size of government. To understand the MMT model, it helps to start with some basic accounting relationships for government finance. For instance, government spending is paid for with either taxes, debt, or money creation. MMT proponents argue that a government that issues its own currency will not default on its bonds because it has the power to issue as much money as needed to pay off the public debt. In their view, this gives governments the ability to fund expensive public projects such as universal healthcare and a universal jobs guarantee without concern for the cost of these programs.
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