MMT is the operational reality - Of US economy Posted: Mar 25th, 2019 - 12:46 pm In Reply to: Price inflation is caused by an INCREASE in the money - supply (money printing) and
Inflation...
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The U.S. government, which can produce dollars with a few keystrokes, doesn’t need tax revenues to pay for anything. When it taxes, it removes dollars from the economy rather than filling the coffers of the U.S. Treasury. Still, MMT people don’t say, as the author suggests, that there’s no limit on government spending, although this is the most common misunderstanding of the theory. The limit’s a function of available resources—an economy’s more than just money. An economy can only absorb so much government spending before it reaches its “speed limit,” which is inflation. Serious inflation becomes a threat when the economy approaches full capacity, meaning almost everyone has a job, factory production’s maxed out, etc., not because of the deficit. Under MMT, government deficits are seen as surpluses for the citizens. In fact, the amount of the deficit matches private savings to the penny. This doesn’t mean, however, that MMT people think deficits can’t be too high. They also believe they can be too low.
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