Professor L. Randall Wray responds to this question and debunks the misunderstandings and fallacies surrounding it.
Let us close this blog and this Primer with an examination of three propositions on the nature of money. This has been a long and difficult blog. You might need to read it twice. Or three times.
The main objections to MMT are the belief that adoption of a fiat money necessarily leads to high inflation and perceived government inefficiency. Let’s expose these boogeymen.
Can you separate the MMT explanation of the cause of unemployment from the policy to cure it? Yes. Should you? Of course not.
It is much better to create the jobs and then let growth follow, rather than to try to pump up growth in the hope that some jobs might trickle down.
Once one understands that sovereign governments do not have to force millions to suffer involuntary unemployment, then the ethically defensible position of opposing a Job Guarantee is narrowed.
