Thread by @PatriciaNPino

I hear a few ppl say that #MMT applies only to the USA & not the U.K. I don’t know where this comes from, but they’ve made up so much stuff about MMT that I’m not surprised about this. so lets clarify some things:

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1) MMT applies to all nations that have a fiat currency & r monetarily sovereign.

2) the UK has a Fiat currency. So does the US, Australia, Japan, and many others. This means their currencies r not pegged to gold or any other currency or commodity.

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3) these countries are also monetarily sovereign. That means that their national govts are the monopoly issuer of the currency.

4) in all these nations, commercial banks also create money through credit. But this is not the same as “currency”, which is a net asset to us.

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5) in a nutshell, #MMT says that govt, as the sole issuer of the currency, can buy anything that is for sale in its own currency, and can always fulfil its liabilities denominated in that currency (Never goes bankrupt).

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6) Thus the limit of Govt spending is not dictated by the availability of currency (which is infinite) but by the availability goods and labour for sale in said currency (inflation).

7) this means there’s no need to “balance the budget” ever.

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8)in monetarily sovereign nations, central banks have often been given some independence w regards to some monetary policy, but they cannot say “NO” to parliament when it comes to fiscal policy. When govt buys something the BOE has to credit the accounts >

of those ppl it is buying it from, Be it labour/goods/services.

9) the Eurozone as a whole is monetarily sovereign. BUT each member state within it is not. However, member states are made responsible for fiscal policy within their nations. This doesn’t work well
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& is the source of many of the troubles of the EZ.

10) MMT is simply description of how these currencies work. MMTers tend to support certain policies, like a job guarantee, But these are part of a separate prescriptive aspect of MMT. >

11) Since I’ve been campaigning on raising awareness on MMT I’ve met MMT economists from The US, UK and Australia. And come across many counter arguments:

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Some are :
- that MMTers want to print money and turn countries into Zimbabwe.
- that MMT only works in closed economies.
- that central banks are private entities not under control of govt (not true).
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- that it’s better that people don’t know the reality of money, so that they don’t ask the govt to spend too much.
- that investors wouldn’t like it.

All these issues have been debunked over and over again in many papers.

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12) ultimately MMT makes orthodox economists nervous bc it trashes much of their work of the last 4 decades.

13) MMT makes right wingers nervous bc it gives hope to many who were until now told that “there is no alternative”

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to the current economic order & that “balancing the budget” comes before the needs of the nation.

14) Despite this, #MMT isn’t inherently LW or RW. But if ppl knew MMT, RW politicians would no longer be able to hide their ideology behind the lie that money is scarce. It’s not.