Modern Monetary Theory

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Physiocrat
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Modern Monetary Theory

Post by Physiocrat » Mon Nov 05, 2018 10:13 pm

My understanding of MMT is that money has historically been, and not necessarily logically, a creation of the state and the way you generate demand for it over and above industrial use is for paying taxes. Consequently, since paper money has effectively no industrial use the value would fall to zero in the absence of any taxation. Surely however it has a demand as a medium of exchange since that is a hugely important function of money. Further, so even if the demand for taxes fell to zero, since there were not any taxes anyway, current paper money would still have some value even though it would fall significantly and caused significant price inflation (again though, so what?). It would seem to me then the claims for modern monetary theory seem only to have weight if and only if money cannot arise on the market which is demonstrably false.

If anyone has any insight on this subject I'd value some input.
The atoms tell the atoms so, for I never was or will but atoms forevermore be.

Yours sincerely,

Physiocrat

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Merlin
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Re: Modern Monetary Theory

Post by Merlin » Mon Nov 12, 2018 10:29 am

MMT get quoted every now and then, but I’ve never found the snippets I’ve encountered interesting enough to pursue it further. It seems to be a collection of demonstrably false assertions and models, and can only retain whatever currency it has given the large monetary contraction of 2008 and 2011 which created the impression that there is no such thing as too much money, for the market will take whatever you throw at it.

But again, this is just from the snippets I’ve encountered and there may be far more nuance to their arguments than what I understand.

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Jon Irenicus
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Re: Modern Monetary Theory

Post by Jon Irenicus » Mon Nov 12, 2018 12:05 pm

I’ve not seen much in its arguments that isn’t either part of Austrian theory or a repetition of Keynesian fallacies, plus disagreements with Austrians that usually amount to nothing more than technical quibbling. The blog Spontaneous Finance has some good take downs of their theory.
Former overlord of the original Mises forum.

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