![]() I cannot begin to do justice to MMT in this short column. ![]() ![]() But that constraint is inflationary pressures, not the deficit. Kelton states, “The majority of economists remain wedded to a fifty-year-old doctrine that relies on human suffering to fight inflation … If it takes eight or ten million unemployed people to stabilize prices, then that is how the Fed defines full employment.” And yes, there is a constraint on how much the government can spend. The real deficit of our nation is unemployment. “The Deficit Myth” suggests that government spending and taxation should be used to achieve full employment and that federal deficits are good for the economy. What is important is that our economy balances. ![]() And why might this be? MMT tells us our government can print as much money as needed. government, rather than a hard commodity) that unlike a household, it does not need to balance the budget. ![]() has a fiat currency, (in other words our currency is backed by the U.S. It is puzzling as to why (in the midst of all the controversy and dismay about raising the debt ceiling limit) no one has discussed Modern Monetary Theory (MMT) as an alternative. Economist Stephanie Kelton in her book “The Deficit Myth” explains this theory and how it gives us a new way of thinking about our ongoing budget deficit dilemma. Laurie Hyland: Debt: Modern Monetary Theory may be better way to think about budget deficit ![]()
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