10:18 AM Bankers Join Socialists in Supporting “Modern Monetary Theory” | |
The gaggle of socialist candidates vying to win the Democratic nomination for president all agree on one thing. They believe government should be doing a lot more.
Just how to pay for all of those dreams is the question. Modern Monetary Theory (MMT), we are told by the likes of Alexandria Ocasio Cortez, is the answer.
The New York Times describes MMT as a “package of eccentric ideas” including the notion “deficits are too small, and that the U.S. can essentially print money to pay off its debt.”
Yes, proponents of MMT, believe the U.S. should borrow more than it does currently, which is roughly $1 trillion per year. Why worry? The U.S. can simply create the trillions needed to pay off all of that debt.
Some may ask just who will be willing to lend to the U.S. when the primary means of repayment will be firing up a digital printing press.
Anyone who passed Economics 101 should be able to see the fatal flaw in Modern Monetary Theory. History is clear and there are some real-life catastrophes playing out right now in places like Venezuela.
Hyperinflation and currency collapse is the inevitable result when governments begin printing to escape all limitations.
The headline for the above-referenced article in the New York Times: “Modern Monetary Theory Finds an Embrace in an Unexpected Place: Wall Street.” There is no telling exactly why the Times considers Wall Street’s enthusiastic embrace of MMT as “unexpected.”
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