The magic money tree

This report from the UK think tank Adam Smith Institute examines the case against Modern Monetary Theory.

Modern Monetary Theory (MMT) contends that government can spend without restraint and large deficits and debt don’t matter when the economy is not at full capacity. It asserts that the state, as the issuer of the nation’s currency, cannot go bankrupt because it can just keep creating and printing money; taxation exists not to obtain revenue but to oblige people to use a nation’s currency and control inflation; and that all public expenditure can be financed by debt or creating money. Professor Antony Mueller unpacks the logic behind MMT and argues that its proponents’ spending plans risk excessively expanding the money supply with inflationary and hyperinflationary impacts.

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