Modern Monetary Theory

What is MMT and how could it completely change your perception of life in a nation with a sovereign fiat currency?

MMT - What is it anyway??

"I've heard it called the Magic Money Tree"
"If we just keep printing money, we'll devalue the dollar!"
"Printing money will cause inflation!"
"OhEmGee the National Debt!!"

We've all heard loads of rumors...now it's time to get the truth!

Use the arrows or swipe through the slides to learn more.

Modern Monetary Theory or MMT

MMT is just a description of how sovereign fiat, floating exchange rate currencies like the US dollar actually work. MMT helps us move past the outdated gold-standard thinking that hasn't been right for decades.

It's not something to implement someday, it is exactly how our money works TODAY!!

Sovereign currency issuers...

Many governments issue their own currency. The sovereign issuer of a nation’s currency is nothing like the users of its currency - such as households, businesses, or state and local governments.

The currency issuer is not constrained to balanced budgeting in the same way as a currency user.

Government Solvency

Sovereign governments can never run out of the currency they issue.

No matter what politicians or talking heads on TV say, when a country issues its own sovereign currency, it can never run out.

That would be like the scorekeeper in baseball running out of points! Crazy, right?

Taxes and Federal Spending

Federal taxes are not collected in order for the government to spend later. They are actually deleted out of existence!

As a matter of fact, in order for us to pay taxes in the first place, the government, the CURRENCY ISSUER, has to create (or spend into existence) the money. Then, we CURRENCY USERS have to find a way to get some money to pay our taxes.

The National Debt

It is not possible for a currency issuer to go broke.

Most governments, most of the time, will run fiscal deficits. This is not a matter of concern, and is indeed a good thing, as it means most private sectors will be able to run the financial surpluses they wish to add to their net savings.

The government’s deficit is our surplus – we should be glad all that money hasn’t been taxed out of the economy!

Where Do I Learn More?

Look through our collection of articles below to learn more! They are conveniently categorized and there are plenty of resources from MMT Beginner to Macroeconomics Expert level.

Functional Fiscalism

J.D. ALT November 12, 2020 Economic Justice Environmental and Ecological Justice

What I am going to imagine here is an argument that a progressive politician (for example, someone associated with a new Biden administration) could make …

The Public Banking Act

Rohan Grey November 6, 2020 Economic Justice Equality with Justice

Banking is social infrastructure, and is intimately dependent upon public support and regulation. To that extent, public banking is not ‘extreme’ or an ‘aberration’. To the contrary, it restores banking to its proper role as a tool of public development.

Keeping Score

Stephanie Kelton October 27, 2020 Economic Justice Twitter Thread

I promise to stop when the battle is won. Until then, here’s another attempt to improve understanding and shift our broken thinking about government “deficits.”

MMT 101: Response to the Critics Part 3

L. Randall Wray October 19, 2020 Economic Justice Education

In this piece, we study the interaction between the government and nongovernment sectors while retaining the consolidation hypothesis.

MMT 101: Response to the Critics Part 2

L. Randall Wray October 19, 2020 Economic Justice Education

MMT is frequently criticized for consolidating the treasury and the central bank. In this post, we will address these issues by tackling problems surrounding the nature of money and the role of taxes, and by beginning to deal with the consolidation argument.

MMT 101: A Reply to Critics Part 1

L. Randall Wray October 19, 2020 Economic Justice Education

This is Part 1 of a six part series in which we deal with critics of MMT. As readers of this blog know, our critics continually raise the same old tired critiques of MMT.

The Millennials’ Money

J.D. ALT October 14, 2020 Economic Justice Reference Material

Modern fiat money, once it becomes a “visible reality” for more and more people, can’t help but become a force for positive change in our political discourse and collective future.

The Capital Commons, Part 2

Real Progressives October 7, 2020 Economic Justice Policy Advocacy

How to best manage public capital.

Why we need to debunk the 'deficit myth' - BBC REEL

Government spending is increasing at an unprecedented rate to deal with the effects of the coronavirus pandemic. Many people worry this could burden future generations.

However, economist Stephanie Kelton, author of The Deficit Myth, argues that we need to rethink our attitudes towards government spending.

Could Modern Monetary Theory help us navigate our way out of this crisis – and even help build a fairer economy?

Producer: Dan John
Animation: Jacqueline Nixon

(Republished with permission from the BBC)