Modern Monetary Theory: Explained via Jon Stewart

Main tenets of Modern Monetary Theory​

• Government deficits aren't inherently bad. According to the MMT theory, deficits don't matter as much as we think they do and aren't necessarily a signal of a shaky economy. If the government can simply create more money, then the government deficits can be easily fixed. This concept is a hallmark of MMT and one of the most controversial aspects of the theory.
  
  
• Governments can create more money without threat of economic collapse. Given the fact that money is no longer backed by gold and is more theoretical in the sense it can be created at any time, many MMT supporters believe that money can be created without tanking the economy. In 2005, former Federal Reserve Chairman, Alan Greenspan, followed that line of thought: "There's nothing to prevent the federal government creating as much money as it wants."
  
  
• Because the government is the creator of the currency, it doesn't need to adhere to the same individual budgeting principles. As individuals we know that our expenses shouldn't exceed our income or it'll lead to debt. Proponents of MMT say that the government doesn't need to abide by such standards since it's also the creator of the money and theoretically can create more.
  
  
• A federal jobs guarantee program is possible. Again, given the core tenet that the government can create more money, MMT theorists support the idea of a federal job guarantee as a way to stabilize the economy and put money toward human capital.
  
  
• The Federal Interest rate should be at 0%. Many MMT supporters believe that the "natural rate of interest is zero" and there should be no bond sales. On top of that, MMT supporters want to do away with the increasing and lowering of interest rates as they're ultimately not that relevant when it comes to growth and long-term business decisions.

Dans La Lune said:

I'm hooked on this show. This is (again) a brilliant discussion on Modern Monetary Theory, sparked by a Twitter discussion.

"But how do you pay for it?" (the phrase Jake Tapper employs against every progressive policy agenda)


He's an article if you don't want to watch the clip: https://www.businessinsider.com/modern-monetary-theory

Main tenets of Modern Monetary Theory​

The main tenets of Modern Monetary Theory are:

• Government deficits aren't inherently bad. According to the MMT theory, deficits don't matter as much as we think they do and aren't necessarily a signal of a shaky economy. If the government can simply create more money, then the government deficits can be easily fixed. This concept is a hallmark of MMT and one of the most controversial aspects of the theory.
  
  
• Governments can create more money without threat of economic collapse. Given the fact that money is no longer backed by gold and is more theoretical in the sense it can be created at any time, many MMT supporters believe that money can be created without tanking the economy. In 2005, former Federal Reserve Chairman, Alan Greenspan, followed that line of thought: "There's nothing to prevent the federal government creating as much money as it wants."
  
  
• Because the government is the creator of the currency, it doesn't need to adhere to the same individual budgeting principles. As individuals we know that our expenses shouldn't exceed our income or it'll lead to debt. Proponents of MMT say that the government doesn't need to abide by such standards since it's also the creator of the money and theoretically can create more.
  
  
• A federal jobs guarantee program is possible. Again, given the core tenet that the government can create more money, MMT theorists support the idea of a federal job guarantee as a way to stabilize the economy and put money toward human capital.
  
  
• The Federal Interest rate should be at 0%. Many MMT supporters believe that the "natural rate of interest is zero" and there should be no bond sales. On top of that, MMT supporters want to do away with the increasing and lowering of interest rates as they're ultimately not that relevant when it comes to growth and long-term business decisions.

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Bullseye said:

A big spenders wet dream. Scarlet O'hara: "I won't worried about massive deficits today, I'll worry about them tomorrow". "Running low on cash? Don't worry we'll print more".

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Antiwar said:

Have you ever considered that government spending (on some things, not on others) is an investment?

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Antiwar said:

Have you ever considered that government spending (on some things, not on others) is an investment?

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Bullseye said:

I've heard that slogan for decades. Investments pay returns and yet debt just keeps piling up and very little gets better. And politician keep talking more "investments".

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Dans La Lune said:

• Because the government is the creator of the currency, it doesn't need to adhere to the same individual budgeting principles. As individuals we know that our expenses shouldn't exceed our income or it'll lead to debt. Proponents of MMT say that the government doesn't need to abide by such standards since it's also the creator of the money and theoretically can create more.

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Dans La Lune said:

• A federal jobs guarantee program is possible.

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aociswundumho said:

Not "theoretically". The state can create as many dollars as it wants, but every dollar created devalues every existing dollar. There are no free lunches.

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Dans La Lune said:

I'm hooked on this show. This is (again) a brilliant discussion on Modern Monetary Theory, sparked by a Twitter discussion.

"But how do you pay for it?" (the phrase Jake Tapper employs against every progressive policy agenda)


He's an article if you don't want to watch the clip: https://www.businessinsider.com/modern-monetary-theory

Main tenets of Modern Monetary Theory​

The main tenets of Modern Monetary Theory are:

• Government deficits aren't inherently bad. According to the MMT theory, deficits don't matter as much as we think they do and aren't necessarily a signal of a shaky economy. If the government can simply create more money, then the government deficits can be easily fixed. This concept is a hallmark of MMT and one of the most controversial aspects of the theory.
  
  
• Governments can create more money without threat of economic collapse. Given the fact that money is no longer backed by gold and is more theoretical in the sense it can be created at any time, many MMT supporters believe that money can be created without tanking the economy. In 2005, former Federal Reserve Chairman, Alan Greenspan, followed that line of thought: "There's nothing to prevent the federal government creating as much money as it wants."
  
  
• Because the government is the creator of the currency, it doesn't need to adhere to the same individual budgeting principles. As individuals we know that our expenses shouldn't exceed our income or it'll lead to debt. Proponents of MMT say that the government doesn't need to abide by such standards since it's also the creator of the money and theoretically can create more.
  
  
• A federal jobs guarantee program is possible. Again, given the core tenet that the government can create more money, MMT theorists support the idea of a federal job guarantee as a way to stabilize the economy and put money toward human capital.
  
  
• The Federal Interest rate should be at 0%. Many MMT supporters believe that the "natural rate of interest is zero" and there should be no bond sales. On top of that, MMT supporters want to do away with the increasing and lowering of interest rates as they're ultimately not that relevant when it comes to growth and long-term business decisions.

Click to expand...

Antiwar said:

Have you ever heard that capitalism needs to expand?

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Dans La Lune said:

I'm hooked on this show. This is (again) a brilliant discussion on Modern Monetary Theory, sparked by a Twitter discussion.

"But how do you pay for it?" (the phrase Jake Tapper employs against every progressive policy agenda)


He's an article if you don't want to watch the clip: https://www.businessinsider.com/modern-monetary-theory

Main tenets of Modern Monetary Theory​

The main tenets of Modern Monetary Theory are:

• Government deficits aren't inherently bad. According to the MMT theory, deficits don't matter as much as we think they do and aren't necessarily a signal of a shaky economy. If the government can simply create more money, then the government deficits can be easily fixed. This concept is a hallmark of MMT and one of the most controversial aspects of the theory.
  
  
• Governments can create more money without threat of economic collapse. Given the fact that money is no longer backed by gold and is more theoretical in the sense it can be created at any time, many MMT supporters believe that money can be created without tanking the economy. In 2005, former Federal Reserve Chairman, Alan Greenspan, followed that line of thought: "There's nothing to prevent the federal government creating as much money as it wants."
  
  
• Because the government is the creator of the currency, it doesn't need to adhere to the same individual budgeting principles. As individuals we know that our expenses shouldn't exceed our income or it'll lead to debt. Proponents of MMT say that the government doesn't need to abide by such standards since it's also the creator of the money and theoretically can create more.
  
  
• A federal jobs guarantee program is possible. Again, given the core tenet that the government can create more money, MMT theorists support the idea of a federal job guarantee as a way to stabilize the economy and put money toward human capital.
  
  
• The Federal Interest rate should be at 0%. Many MMT supporters believe that the "natural rate of interest is zero" and there should be no bond sales. On top of that, MMT supporters want to do away with the increasing and lowering of interest rates as they're ultimately not that relevant when it comes to growth and long-term business decisions.

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aociswundumho said:

I've heard people claim that capitalism needs to expand, but I don't see how it's true.

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aociswundumho said:

I've heard people claim that capitalism needs to expand, but I don't see how it's true.

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Antiwar said:

I'm pretty sure I've seen you give one reason why capitalism expanding is a good thing: Capitalism (supposedly) lifts people out of poverty.

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Antiwar said:

Have you ever considered that government spending (on some things, not on others) is an investment?

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PoS said:

Crypto absolutely destroys MMT as a viable alternative.

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Antiwar said:

Do you know how most money comes into existence?

Have you ever heard that capitalism needs to expand?

How does a fixed money supply expand?

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Dans La Lune said:

He's also forgetting that money itself is a function of the government. Without it capitalism consists of exchanging sheep skins and bundles of hemp.

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Dans La Lune said:

He is ideologically opposed to government, except as a means to facilitate a transfer of wealth to the super-rich.

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Vadinho said:

Money is actually a form of debt, its origins lie in issuing debts. Think about how money is created today. It is issued as a form of debt whether its a loan from a bank or a tbill, it's debt compounded by interest. MMT merely describes the reality of a FIAT currency for a nation that owes debts in its own currency. That is all it really is folks, it reveals what is actually happening rather than perpetuate artifacts from the gold era.

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Dans La Lune said:

He's also forgetting that money itself is a function of the government. Without it capitalism consists of exchanging sheep skins and bundles of hemp.

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Dans La Lune said:

Money itself is, at its core, an illusion -- sustained by the power of the government. Just as property is. Libertarians will insist that property and money have an intrinsic value beyond government, beyond time and space. To which I laugh in their face, and generally force them off the forum for a few weeks out of sheer humiliation. Capitalism is an exercise in government power, and the notion that a capitalist system can exist outside of government (and therefore replace government) is the mindset of a BABY.

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Antiwar said:

We know that the right-libertarian solution for everything is privatization.

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