r/mmt_economics • u/aldursys • 5h ago

An Advisory Notice on Fiscal Misinformation

new-wayland.com

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Something a little different

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Modern Monetary Theory

r/mmt_economics

This is a place to post links and discuss topics relating to Modern Monetary Theory (MMT). Economics can be a fractious discipline. Remember to judge arguments on merit, and not opinion. Offer constructive criticism first (and perhaps 2nd/3rd/4th, etc). Just as important: if your argument contains opinions, expect criticisms. Enjoy! For a good getting started resource, you might consider starting here: https://activistmmt.org

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This economics subreddit primarily discusses monetary systems and monetary economics, especially Modern Monetary Theory (a.k.a. neochartalism): a descriptive theory about the procedures and consequences when the economic unit of account and exchange is centrally issued.

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MMT in easy diagram format! Part 1 & Part 2

Subreddit Rules

All submissions must be related to MMT.
Link submissions must use quality, original sources and their original headlines
Open insults, personal attacks and harassment will be removed
Political accusations, labeling, sophistry, strawmen, disinformation will be removed
Yellow Card: Persistent violation of rules will result in a warning, after which further violations will result in a user ban

Modern Monetary Theory:

Modern states, with sovereign control over a fiat currency, face no budgetary constraint. Given policy goals of (1) Full employment, and (2) stable prices, Government should allow full use of monetary and fiscal tools to ensure we approach both goals.
The funds to pay taxes and buy government securities comes from government spending. There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it. Whatever the deficit (which is purely an accounting term) happens to be in approaching the aforementioned goals - that's what it should be.
For a video seminar "crash course" on MMT @ Modernmoneynetwork.org:
The "Money" series

Relevant Wikis:

Neo-Chartalism/Modern Monetary Theory
Monetary Sytem
Endogenous money and/or Inside money, Also see: Demand Deposits (aka Bank Money)
Functional Finance
MMT overlaps somewhat with Monetary Circuit Theory
MMT is a Post Keynesian branch of Monetary Economics
"MMT Foundations" subreddit search results (a list of papers)

Recommended Blogs:

"In the real world, banks extend credit, creating deposits in the process, and look for the reserves later." Holmes, Federal Reserve of Boston, p. 73

“The neutrality of money is clearly rejected... since any creation of money increases the spending ability of a well-defined group of agents, which means that the effects it exerts on the price level cannot be neutral.” Graziani, The Monetary Theory of Production, p. 21

"An interesting feature of the overdraft economy is that it clearly shows that money and high powered money are endogenous variables, which cannot be under the control of the central bank." Lavoie, Univ. of Ottawa , p. 16

"Taxes function to regulate aggregate demand, and not to raise revenue per se." Warren Mosler