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MMT is actively being leveraged for fiscal/monetary policy in the US, and has been since 2008 (by both Democrat and Republican POTUS and Congress). > "Congress

MMT is actively being leveraged for fiscal/monetary policy in the US, and has been since 2008 (by both Democrat and Republican POTUS and Congress). > "Congress has been showing us — in practice if not in its rhetoric – exactly how M.M.T. works: It committed trillions of dollars this spring that in the conventional economic sense it did not ‘have.’ It didn’t raise taxes or borrow from China to come up with dollars to support our ailing economy. Instead, lawmakers simply voted to pass spending bills, which effectively ordered up trillions of dollars from the government’s bank, the Federal Reserve. In reality, that’s how all government spending is paid for." [0] > When President Trump signed the $2 trillion CARES Act into law, the federal government sold bonds to fund the new spending, expanding the government debt. However, the largest purchaser of those bonds was the Fed. ... As a currency issuer, the federal government can create more money to buy Treasuries and pay off its debts, making an involuntary default impossible. Under the Fed’s jurisdiction, it could purchase all U.S. Treasuries tomorrow and retire the entire U.S. federal debt, something Japan has already done with nearly half of its debt. ... Is the Fed’s financing of the debt created by the CARES Act fueling inflation? Not quite. The annual U.S. inflation rate currently stands at around one percent, half of the Fed’s two percent target. In fact, over the past decade, the Fed has struggled to increase the U.S. inflation rate. There actually is not enough spending (aggregate demand) in the U.S. economy to hit the Fed’s inflation goal. [2] > Modern Monetary Theory (MMT) is alive and well in the United States. While MMT is derided by mainstream economists, the federal government is practicing MMT. From running massive federal government deficits, to the operations of the Federal Open Market Committee (FOMC) by the Federal Reserve Bank, the United States is practicing a policy of MMT that is currently underpinning the economy of the United States. ... The U.S. Federal Reserve (Fed) began its own form of quantitative easing (QE1) on November 25, 2008 by purchasing $600 billion in agency mortgage-backed securities (MBS) and agency debt. [3] > While MMT may seem like a purely theoretical construct, it should be recognized that many governments, including the U.S. government, are effectively already putting MMT into practice. [4] If you're still not convinced that the US is actively applying MMT in practice thats ok, lets wait and find out more. Meanwhile, thanks for catalyzing my motivation to research all of this! :) [0] https://www.nytimes.com/2020/06/09/opinion/us-deficit-coronavirus.html https://www.nytimes.com/2020/06/09/opinion/us-deficit-corona... [1] https://www.cnbc.com/2020/04/29/op-ed-pandemic-moves-modern-monetary-theory-from-the-fringes-to-actual-us-policy.html https://www.cnbc.com/2020/04/29/op-ed-pandemic-moves-modern-... [2] https://policy-perspectives.org/2020/10/23/modern-monetary-theory-can-the-u-s-print-its-way-to-prosperity/ https://policy-perspectives.org/2020/10/23/modern-monetary-t... [3] https://intpolicydigest.org/the-u-s-has-embraced-modern-monetary-theory-in-fact-if-not-in-name/ https://intpolicydigest.org/the-u-s-has-embraced-modern-mone... [4] https://www.fa-mag.com/news/america-is-on-the-road-to-mmt-58075.html?print https://www.fa-mag.com/news/america-is-on-the-road-to-mmt-58...

lottin 6y ago
Okay... I still don't know what it means to "apply MMT". I already told you that monetary policy has been used by governments since the 1930s long before MMT was invented. But, anyway, what is your point? Do you think that QE was a mistake? What do you suggest would have been an appropriate monetary policy during the 2008 financial crisis?
- yazaddaruvala 6y ago
  Given inflation didn't run rampant, I don't know if there was a better strategy. However, the continued liberal application of QE 1. Could hit a hyper inflation ceiling (hurting the poorest). 2. Weakens USD compared to other currencies (as we have seen through 2020. Hurting every entity that holds cash i.e. typically the poorest). 3. Reduces the ability for the US to apply QE in the future. Hurting our ability to tackle the next crisis, which will predominantly hurt the poorest. All of this to say, a portion of the lost trust in the USD is being put into crypto to hedge for the medium term, and (for better or worse) to create a long term denationalized currency where no handful of politicians can choose to use QE rather than making good fiscal policy decisions quickly.
  - lottin 6y ago
    So when the next economic crisis comes you would rather have central banks not interfere with the crisis at all. Just let the crisis solve itself. Is that what you're saying? Also, you seem to think that taking monetary policy away from central banks will lead somehow to governments making good fiscal policy decisions, whatever that is. Where do you get that from? The gold standard never stopped governments from going bankrupt. Monetary policy in the hands of incompetent authorities can be disastrous, but this is no reason to get rid of it. Otherwise we should also get rid of many things, including laws and government.
    - yazaddaruvala 6y ago
      > and (for better or worse) I'm not making a judgement about its merits, it might end up horrible. All I'm saying is, there is a trend towards denationalized currency as a hedge against bad monetary policy. Based on this trend something like BTC will likely become the new gold standard used for slow transactions (i.e. reconciliation) between governments and large corporations. Will it be BTC? I don't know. Will it be a good thing? I don't know. I do know, the trend suggests a particular future, and trying to root out the motivations suggest the trend will continue.

lottin 6y ago

Okay... I still don't know what it means to "apply MMT". I already told you that monetary policy has been used by governments since the 1930s long before MMT was invented. But, anyway, what is your point? Do you think that QE was a mistake? What do you suggest would have been an appropriate monetary policy during the 2008 financial crisis?

yazaddaruvala 6y ago
Given inflation didn't run rampant, I don't know if there was a better strategy. However, the continued liberal application of QE 1. Could hit a hyper inflation ceiling (hurting the poorest). 2. Weakens USD compared to other currencies (as we have seen through 2020. Hurting every entity that holds cash i.e. typically the poorest). 3. Reduces the ability for the US to apply QE in the future. Hurting our ability to tackle the next crisis, which will predominantly hurt the poorest. All of this to say, a portion of the lost trust in the USD is being put into crypto to hedge for the medium term, and (for better or worse) to create a long term denationalized currency where no handful of politicians can choose to use QE rather than making good fiscal policy decisions quickly.
- lottin 6y ago
  So when the next economic crisis comes you would rather have central banks not interfere with the crisis at all. Just let the crisis solve itself. Is that what you're saying? Also, you seem to think that taking monetary policy away from central banks will lead somehow to governments making good fiscal policy decisions, whatever that is. Where do you get that from? The gold standard never stopped governments from going bankrupt. Monetary policy in the hands of incompetent authorities can be disastrous, but this is no reason to get rid of it. Otherwise we should also get rid of many things, including laws and government.
  - yazaddaruvala 6y ago
    > and (for better or worse) I'm not making a judgement about its merits, it might end up horrible. All I'm saying is, there is a trend towards denationalized currency as a hedge against bad monetary policy. Based on this trend something like BTC will likely become the new gold standard used for slow transactions (i.e. reconciliation) between governments and large corporations. Will it be BTC? I don't know. Will it be a good thing? I don't know. I do know, the trend suggests a particular future, and trying to root out the motivations suggest the trend will continue.