(2019-01-17) Hunt Modern Monetary Theory Or How I Learned To Stop Worrying And Love The National Debt

Ben Hunt on Modern Monetary Theory or: How I Learned to Stop Worrying and Love the National Debt.

This is the power of theory in the service of political expediency, the power of post hoc rationalizations gussied up as “theory”.

For every politically expedient or power-expanding action that any government has ever done in the history of the world, there was a post hoc “theory” that supported it. Laffer Curves, anyone?

Modern Monetary Theory – which is neither modern nor a theory – is a post hoc rationalization of political expediency and power-expanding action. It makes us feel better about all the bad stuff we’ve done with money and debt for the political efficacy of Team Elite. And all the bad stuff we’re going to do.

MMT is the sovereign-friendly justification for deficit spending without end. (budget deficit)

MMT is the theoretical justification for QE (Quantitative Easing) without end.

MMT is the post hoc justification of both easy fiscal policy and easy monetary policy. As such, it is the new intellectual darling of every political and market Missionary of the Left AND the Right.

MMT is the theoretical justification for the economic policies of every potential Democratic presidential candidate in 2020. Because with MMT, you CAN have it all. You can pay for wars without end. You can pay for universal single-payer healthcare. You can pay for everyone to go to college. You can pay for a universal basic income. I mean … why not? A caring sovereign’s gotta do what a caring sovereign’s gotta do.

I’m not a gold standard wacko or a balanced budget loon. I fully understand that the debt of all of us is a completely different animal than the debt of any of us

So don’t tell me that the crowding-out effect of sovereign debt on the real economy isn’t a bad thing. Because it is. This is how entire economies are turned into zombies.

Don’t tell me that the monetization of sovereign debt, explicitly or implicitly, isn’t a bad thing. Because it is. This is how a middle class is destroyed.