- Jul 20, 2011
- Reaction score
- Searching for answers.
- Political Leaning
But eventually a major currency will lose people's respect. And then it will start to snowball (IMO).
And here I'd like to point out what happens in a significant number of debates. In the absence of any real logic, the counterpoint starts to appeal to emotion with statements like the above.
DA doesn't really describe any actual mechanical failures in the theory, but instead relies on hopeless certainty.
Here's the thing, other than the general idea of maximizing productivity, MMT itself declares little fiscal policy guidance. Ideas such as those above might actually be true IF nothing else changes. Of course, the exact same could be said though for current policy.
Other variations on this is "the debt can't grow forever". The reality it can IF the economy grows at least as fast as the debt does. This is what has happened throughout the history of our debt. Our country isn't a person that has a fixed period of productivity. Our country could "live" forever, and so could its "debt". And no - those chain letters about the maximum lifespan of a democracy is 200 years are also meaningless.
So it appears that because MMT does not address all of our problems in a nice little package with minimal change to all other variables it cannot be correct.
The core message from MMTers I see here isn't "we'll fix all your problems", it is more "stop worrying about the debt as a big number so we can concentrate better on the real problems". The size of the debt by itself is meaningless. The size of the "debt" relative to the economy is a little more meaningful but only in the long term.
Does MMT fix all of our problems? Of course not. But it doesn't take much to understand that big policy changes are much easier under the monetary principles of MMT than they are under gold standard thinking and austerity.