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Assume someone with a biology PhD explained to you that the sky was actually purple because of a hidden extra cone your eye possesses that was perceiving light that your brain was canceling out. This somehow sounds plausible, and it's impossible for non biologist me to disprove but at the end of the day I can look up at the sky and say"no, I'm confident it's blue".

This is MMT. MMT says: "government debt isn't really debt and acquiring massive amounts of it that can never be payed off wont ever have consequences because of x, y, and z mental gymnastics".

You don't need a PhD in economics or to be able to disprove everyone one of the Arcane mental gymnastics performed to understand that "government debts are real and they can have consequences". You don't need any special economic training to understand that if you owe someone money, then next month you have a bit less money because you have a debt payment. There are a million caveats, and fifty people with 10$ words that you can't argue because you don't know what they mean because they don't mean anything will explain to you why you are the dumbest person on the planet for believing that "government debts are real and they can have consequences".

It's ok though because you can look up at the sky and know what color it is.

(don't take the sky example too literally, i know it doesn't really make sense).




The point is that the government doesn't need to borrow any money in the first place.

The government needs money only to buy the goods and services of the private sector in the service of the public interest. There is no other utility for money in the modern state.

The government no longer needs to keep stocks of gold, the government can create "digital gold" as needed.

Recall why the government needs to print money: because money is an abstraction, a fungible token that represents a constant fraction of the total real wealth in the the entire economic system. If we keep producing more goods and services, but don't produce more money, we enter deflation. To avoid deflation, the government needs only to ensure that the amount of money in circulation increases in line with any increase in economic output. As long as this is managed proficiently, the economic system will be stable.

The government increases the amount of money in circulation by purchasing goods and services from the public. To this end, the government can offer citizens money in exchange for labour that serves the public interest and fulfill both its economic and pro-social obligation.

What's the point of the government creating these abstract value tokens, giving them to us, and then demanding them back? And furthermore, why does the government need to borrow arbitrary amounts of similar tokens from other governments?

It doesn't. Our current system is a relic from the days of governments using a limited, fungible, physical resource (gold) which didn't linearly scale with economic growth.

The government no longer needs to borrow tokens, it needs only to create more of them, and should only occasionally need to remove tokens from circulation (taxation) as a way to account compel pro-social behaviour -- e.g. carbon emission taxes.


> You don't need any special economic training to understand that if you owe someone money, and you can't pay it back, it might not end that well

Not such a big deal if you own a money printing machine.


We don't need tresury securities. They are a relic. The can be replaced by interest bearing accounts at the fed which are essentially the same thing.




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