I have been meaning to ask what you think about MMT for some time now. So, have

—I have been meaning to ask what you think about MMT for some time now. So, have you heard of MMT before and what do you think?—

Curt Doolittle

What I’ve stated in the previous few posts is pure Keynesianism, however, I used it in the New Keynesian model, directed at growth rather than just employment.

The criticism we should levy is of Fiat Money that in issuing these stocks (fiat money) the interest is privatized rather than retained as one of the primary income sources of the state.

This was an intention, in the original design, as fear that the state would destroy the economy as it has in the past if legislation made possible the runaway issuance of currency.

MMT makes claims I disagree with, and creates hazards I disagree with. In particular, that no government can go bankrupt – which while LEGALLY true – doesn’t mean it’s PRACTICALLY true, as we have seen many sovereign nations with fiat money produce runaway inflation and in the case of venezuela at present, starvation.

The problem with fiat money is lack of rule of law. In other words, the constitution needs to forbid the state from arbitrary (discretionary) use of money.

In some sense, one of the principle problems of 21st century economics has been to attempt to discover some ‘target’ (measurement) that would allow us to reduce the issuance of money to rule of law (a formula) and place it into the constitution, thereby removing discretion over its use.

In some sense, this is an example of the the conversion by the (((socialists))) from rule of law (non-discretionary rule) to majority rule (discretionary rule): it is even harder to trust a government with fiat money than it was when first issued.

The solution isn’t very difficult. There are no provisions in the constitution against even suggesting certain acts as there were for treason. And it is this certainty of punishment alone that will prevent this kind of behavior in the market for information, legislation and regulation.