NeoLiberal handwringing over debt is absolutely overblown, and the GOP only cares about it when they can use it politically, but let me be suuuuuuper clear here, MMT is a cult.
I mean, those who advocate for higher debt loads or say “debt doesn’t matter”, you’re not wrong, per se, but it’s adjacent to a spectacularly wrong idea, that needs to be nipped in the bud before we base any more policy ideas on it. So don’t take this as me coming for you, or anyone but MMT itself.
So, debt is sold as treasury bonds, right, that have a market and a value, yeah? While the market can hold a lot, as US debt is very popular because it is seen as stable, it’s not some infinite money printer.
And the picosecond the market decides to bail, the whole house of cards collapses. Even the perception of risk by spooked investors can change bedrock economi forces insanely quickly.
We exist in a larger economy with other currencies and countries. The closed loop demanded for the value control of debt forwarded by MMT doesn’t exist. The mechanisms the theory depend on for stability are as imaginary as the Invisible Hand.
We can hold as much debt as we can sell. That’s not “printing money”, and even QE – actual money printing – is used only in extraordinary circumstances, because it’s dangerous.
Given how precarious our political situation is around funding the government, and how precarious our economy is around securitized private debt and crypto bullshit, this is a pretty dangerous line of thinking.
We are an absolute bee’s dick away from a 2008-on-steroids-and-cocaine zeroing of the global economy.
Priorities in a sane world would revolve around regulating debt securities, crypto, and venture capital/private equity/hedge funds within an inch of their lives, and increasing both government revenue and social spending to create a real economy buffer when the imaginary value the billionaires play with evaporates.
Nothing else compares in utility to the “Keynesian multipliers” – the velocity of money, generating additional real economic activity as each successive transaction fuels production and facilitates demand – that exist within the economy of real goods and services .
Broad aggregate consumer spending is the fundamental engine of economic activity, not the government sending billions into tiny defense contractor pools, and not Quants and shamans moving imaginary money around to find the arbitrage in the top of the market without actually funding anything but their narcissistic egos with more money than they could spend in a hundred lifetimes.
For debt to be economically viable, it has to be tied to real growth and development, real investment in positive social outcomes, and real consumer spending to drive demand. Just funneling billions into third party vendors where is gets sequestered into more Wall Street value hoovering or locked in overpriced assets that sit unused outside of the real market is unsustainable.
And using unlimited debt or “printing money” to sustain this death loop of corporate welfare and sweetheart outsourcing is just fucking insane.
Outstanding, maturing T bills HAVE to be a concern in any environment that is trying to offset inflation and shift revenue from debt service to real social spending, fiscal policy as a thing is always at odds with MMT’s stated fundamental tenets. If debt and money supply don’t matter, then there are no tools in the fiscal policy toolbox, and that’s just obviously not the case.
Debt can work as a dynamic shock absorber to smooth out the boom-and-bust cycle, to allow for development and growth of industry or infrastructure, etc. The Idea of a “balanced budget” amendment is laughably insane as well. But debt can’t be the whole fucking basis for infinite spending, and it has inherent mechanics and costs that MMT just ignore.
MMT is absolute dogshit, and any examination of struggling economies that have tried to debt/spend their way out of it proves it.
It’s “Third Way” nonsense cooked up by Capitalism apologists to avoid accusations of Socialism. Tech bros reinventing the bus but worse. MMT is the Uber of economic theories – it’s just a shitty, unsustainable version of the thing we actually need. they propagandize the jargon to seem like serious thinkers, but anyone who spends half an hour googling can find decent counter-examples that fully body their wishful thinking.
It’s this awful mirage of “we can just increase debt so we don’t have to raise taxes on the rich and corporations” that appeals to Capitalists and Technocrats who want to preserve the fantasy of insane wealth as driving moral compass while still virtue signaling that they care about the poors. “Hey, you don’t need *my* money to do the things, you can just print some!” is such an obviously garbage take, and they built a whole ass theoretical framework to sell it.
Again, absolute dogshit.
Ideas like specific industry nationalization and getting key products out of the third party vendor model (especially defense and healthcare), increasing social spending as an investment in human capital-driven growth, and enforcing stability in markets to dismantle the Wild West manipulation by greedy dipshits are fundamental to an equitable, stable, safe and prosperous economy.
Pet theories like MMT are a distraction from the real work of developing these far more viable systemic changes.
Kelsoland.Institute 