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> eventually the system will hit a tipping point that results in either hyperinflation or (more likely) a debt default. Neither of which are even close to occu

> eventually the system will hit a tipping point that results in either hyperinflation or (more likely) a debt default. Neither of which are even close to occurring in the United States. Politicians are going to politician. Just look at the “dynamic scoring” models republicans apply to tax cuts. It isn’t the job of economic theory to ideologically reign in politicians, it’s job is to model to world accurately. I haven’t read enough into MMT to actually assess that for myself, but it’s ridiculous to assert that it’s flat out wrong because politicians run deficits (which they have done for decades before MMT even came into existence)

nradov 5y ago
I didn't claim that MMT is wrong necessarily, just that trying to apply that theory will in practice accelerate the arrival of an eventual fiscal crisis. We aren't close to such a crisis, but we are getting closer every year. Based on what has happened in other countries I expect the crisis will probably hit in a couple decades once the national debt to GDP ratio reaches about 250%, but many factors could change that timeline.
- wbsss4412 5y ago
  Again though, the theory doesn’t say “always maintain a deficit of X amount”. By no means is it implied that deficits are required. In fact, as long as we are at full employment deficits should be stabilized or cut. In the end, it’s advocating utilizing the economic resources you ah e at your disposal, rather than letting them languish. Also, note that the us is hovering at around 120% debt/gdp, a number that has declined since Q2 of 2020.
jhauris 5y ago
TFA asserts that MMT lacks a model, and instead is a collection of ideological policies with a facade of science. If true, that puts it outside the above definition of economic theory as well.
- wbsss4412 5y ago
  > instead is a collection of ideological policies with a facade of science This is actually an accurate description of the whole of economics, irrespective of MMT.

nradov 5y ago

I didn't claim that MMT is wrong necessarily, just that trying to apply that theory will in practice accelerate the arrival of an eventual fiscal crisis. We aren't close to such a crisis, but we are getting closer every year. Based on what has happened in other countries I expect the crisis will probably hit in a couple decades once the national debt to GDP ratio reaches about 250%, but many factors could change that timeline.

wbsss4412 5y ago
Again though, the theory doesn’t say “always maintain a deficit of X amount”. By no means is it implied that deficits are required. In fact, as long as we are at full employment deficits should be stabilized or cut. In the end, it’s advocating utilizing the economic resources you ah e at your disposal, rather than letting them languish. Also, note that the us is hovering at around 120% debt/gdp, a number that has declined since Q2 of 2020.

jhauris 5y ago

TFA asserts that MMT lacks a model, and instead is a collection of ideological policies with a facade of science. If true, that puts it outside the above definition of economic theory as well.

wbsss4412 5y ago
> instead is a collection of ideological policies with a facade of science This is actually an accurate description of the whole of economics, irrespective of MMT.