MMP Blog #41 Responses
Comments and responses on the Modern Money Primer Part 41.
A response to John Carney’s published works because I think they are the most cogent MMT critiques the Austrians have to offer.
The US Dollar probably will not remain the world’s reserve currency. From the US perspective, that might be a disappointment. In the long view of history, it is inconsequential.
Since government deficits create an equivalent amount of nongovernment savings, it is impossible for the government to face an insufficient supply of savings.
It is best to think of the net saving of the nongovernment sector as a consequence of the government’s deficit spending—which creates income and savings.
There are often two objections to the claim that government spending effectively takes place by simultaneously crediting the recipient’s bank account as well as the bank’s reserves.
Let us now begin to examine in more detail the government’s budget and impacts on the nongovernment sector.