
Modern monetary theory: Deficits don't matter? - tkgally
https://www.nytimes.com/2020/06/09/opinion/us-deficit-coronavirus.html
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peter_d_sherman
>"This, broadly speaking, is how our monetary system works. It is true that
the dollars in your pocket are, in a physical sense, just pieces of paper.
It’s the state’s ability to make and enforce its tax laws that sustains a
demand for them, which in turn makes those dollars valuable. It’s also how the
British Empire and others before it were able to effectively rule: conquer,
erase the legitimacy of a given people’s original currency, impose British
currency on the colonized, then watch how the entire local economy begins to
revolve around British currency, interests and power. Taxes exist for many
reasons, but they exist mainly to give value to a state’s otherwise worthless
tokens.

Coming to terms with this was jarring — a Copernican moment. By the time I
developed this subject into my first published, peer-reviewed academic paper,
I realized that my prior understanding of government finance had been wrong."

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nicosaul
"Mr. Mosler had essentially imposed a tax that could be paid only with his own
monogrammed paper. And he was prepared to enforce it. Now the cards were worth
something. Before long, the kids were scurrying around, tidying up their
bedrooms, the kitchen and the yard — working to maintain the lifestyle they
wanted."

Looks like a step towards a dictatorship.

It's also funny that the author starts by laughing at how people think of the
economy as if it was a household, and then puts this exact example.

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tkgally
I posted this link because, as an noneconomist, I find modern monetary theory
intriguing but I don't know how well it would work in practice. If it is
indeed viable, why have the issues of deficits and government debt—which the
theory seems to claim don't matter—been allowed to dominate the political
conversation?

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ctchocula
The essay "Political Aspects of of Full Employment" [1] outlines the vested
interests of industry leaders in playing up the danger of deficits and
increased public investment. As a noneconomist, I too would be interested in
hearing some reasons why the idea was abandoned until MMT brought it into the
mainstream once again.

1) dislike of government interference in the problem of employment as such

2) dislike of the direction of government spending (public investment and
subsidizing consumption)

3) dislike of the social and political changes resulting from the maintenance
of full employment.

[1] [https://mronline.org/2010/05/22/political-aspects-of-full-
em...](https://mronline.org/2010/05/22/political-aspects-of-full-employment/)

