In my last blog, I introduced the basics of Modern Monetary Theory (MMT). While looking through my drafts folder tonight, I found this table I’d copied from this blog post by Bill Mitchell. It gives some commonly heard macroeconomic propositions, and gives an alternative MMT view on each proposition. It’s quite a succinct summary of how a lot of the things to do with the economy that are often stated as fact, are certainly arguable at best, and at worst, are total nonsense.
|Mainstream macroeconomics||Modern Monetary Theory|
|Budget deficits are bad||Budget deficits are neither good nor bad and are required where the spending intentions of the non-government sector are insufficient to ensure full utilisation of available productive resources.|
|Budget surpluses are good||Budget surpluses are neither good nor bad and may be harmful in some circumstances if they involve a drag on growth in situations where there are idle…|
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