
A 600-Page Textbook About Modern Monetary Theory Has Sold Out - howard941
https://www.bloomberg.com/news/articles/2019-05-31/a-600-page-textbook-about-modern-monetary-theory-has-sold-out
======
googlemike
I found the article to be poorly written and confusing, at least in that it
failed to answer the most simple question I had: "What is MMT?"

The Wikipedia article seems far more useful:

[https://en.wikipedia.org/wiki/Modern_Monetary_Theory](https://en.wikipedia.org/wiki/Modern_Monetary_Theory)

To quote the intro:

"MMT advocates argue that the government should use fiscal policy to achieve
full employment, creating new money to fund government purchases. The primary
risk once the economy reaches full employment is inflation, which can be
addressed by raising taxes and issuing bonds, to remove excess money from the
system.[3] MMT is controversial, with active debate[4] about its policy
effectiveness and risks."

~~~
mamon
This sounds exactly like how communist economy used to work in Poland before
1989: Governing communist party claimed to represent the common people, so we
had government-mandated full employment - state-owned companies (the only kind
there was) were employing people, whether they actually needed them or not. To
finance that, government would print money, causing hyperinflation.

Net result was: everyone had a job, everyone had a high (in nominal value)
salary, but the money we had was worthles - you couldn't actually buy anything
with it, because the store shelves were empty. Government had to ration all
consumer goods, by introducing stamps (similar to foods stamps in the US).

It is funny to see communism making its great comeback :)

~~~
fellellor
This will be extremely interesting and fascinating to see, and as a student of
economics I hope we get to see these policies in action.

Mainly because, I feel there are very few data points to draw conclusions on
how this will turn out.

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40acres
MMT going mainstream is valuable because it's charging the conversation about
what we really should be worried about in terms of fiscal policy. And the
answer is inflation, if you want to know why we are still adding 200,000 jobs
a year 10 years into our economic recovery it's because the Fed was too scared
of inflation to signal that long term interest rates would remain low. The Fed
should probably raise their target interest rate, especially if we are going
to invest in green technology to mitigate climate change.

~~~
notme77
Inflation moves money from the rich (who have assets) to the poor (who have
debt). Can't have that...

~~~
htk
Inflation moves money from citizens (who have X amount of money) to the
government (who can print money).

~~~
sytelus
I'm surprised at view of inflation here. Inflation moves money from the future
generation to the current generation. When you are printing money, you are in
effect borrowing from future yourself (or your descendants).

This is one of the most magical modern things you can do with debt. Previously
in human history, you can borrow money to _others_ to create wealth which was
then translated into more money. This was an extra-ordinarily powerful concept
we called "debt". Now we can borrow from _future_ ourselves! No one knows how
this will pan out.

~~~
gowld
See "Debt, The First 5000 Years". The concept of IOUs (inflation) isn't new at
all.

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YjSe2GMQ
It is a kind of crazy cult - believing that more money simply solves problems,
and that we should have full employment. There's extensive historical record
on governments going drastically for full employment:

[https://news.ycombinator.com/item?id=20065380](https://news.ycombinator.com/item?id=20065380)

That being said, MMT is also similar to what Japan has done, and it caused
neither recession nor growth there. I mean the Japanese central bank owns even
equity ETFs, it's kind of insane. And still no results, which is even more
insane:

[https://www.economist.com/special-report/2018/10/11/what-
to-...](https://www.economist.com/special-report/2018/10/11/what-to-do-if-the-
usual-weapons-fail)

------
habosa
Reminds me of when Piketty's "Capital" was sold out everywhere. I was one of
many people who bought it due to the hype. Apparently I was also one of many
people who never read it: [https://www.huffpost.com/entry/piketty-book-no-one-
read_n_55...](https://www.huffpost.com/entry/piketty-book-no-one-
read_n_5563629)

MMT is very "in" right now but most people won't finish a 600pg novel, let
alone a texbook.

~~~
xyzzyz
You should actually read Capital, if only for the interesting data series he
collected there.

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baddox
> MMT argues that governments in control of their own currencies, like the
> U.S. and Japan, aren’t constrained in the ways standard economics says they
> are. They may risk stoking inflation or running out of resources if they
> spend too much -- but they can’t go broke.

I'm a bit confused. My impression is that this is overwhelmingly the dominant
view in mainstream political discourse. My impression is that, at least in the
United States, it's considered fairly radical to talk seriously about
significant spending cuts, balancing the budget, or even having the slightest
concern at all about budget deficits or national debt.

~~~
britch
I think talking about spending cuts and balancing the budget were pretty
common not too long ago. It was a big part of Paul Ryan's speaker-ship.[0]

Republicans (and some democrats) have used "balancing the budget" rhetoric, to
justify cutting or refusing to expand wellware and social safety net programs.
This has died down once they got into power because no one actually want to
balance the budget (cutting military spending is not exactly a hit in
republican strongholds).[1]

So in a way you are right, no one is _seriously_ talking about balancing the
budget, but people certainly were talking about it.

[0]
[https://en.wikipedia.org/wiki/The_Path_to_Prosperity](https://en.wikipedia.org/wiki/The_Path_to_Prosperity)
[1] [https://www.vox.com/policy-and-
politics/2018/12/10/17929460/...](https://www.vox.com/policy-and-
politics/2018/12/10/17929460/paul-ryan-speaker-retiring-debt-deficits-trump)

------
austenallred
They should print more

~~~
BenoitEssiambre
Books or money?

~~~
c0nducktr
Yes.

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neonate
[https://outline.com/6ZH6md](https://outline.com/6ZH6md)

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awakeasleep
I'm torn between whether this is 'good' because people are learning about
seignorage and taxation through fresh eyes because everything is called
something different, or if it's bad because it's an insane cult

~~~
dang
I'm sure there's a good point underlying this but could you please follow the
site guidelines and not be snarky on HN?

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

~~~
shitgoose
believing in "something out of nothing" \- yes, this is a cult.

~~~
dang
Ok, but we're looking for substantive comments here, not just labeling.

