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It should be noted that the parent is basing his conclusions on Modern Monetary Theory[0], a heretodox economic theory in which fiscal policy is unconstrained,
by rory096 9y ago
It should be noted that the parent is basing his conclusions on Modern Monetary Theory[0], a heretodox economic theory in which fiscal policy is unconstrained, deficits aren't relevant, and a country is always able to spend.
[0] https://en.wikipedia.org/wiki/Modern_Monetary_Theory https://en.wikipedia.org/wiki/Modern_Monetary_Theory
- ubi_now 9y agoNo, this is way off. MMT doesn't model fiscal policy as unconstrained in real terms, only nominal terms. And given the legal authority, of course a sovereign issuer is always able to spend. In this case spending is merely typing digits into a computer. This fact doesn't imply deficits/debt "aren't relevant", but rather deficits/debt work very differently for the currency issuer as opposed to the currency user.