I must confess that I am at a loss to understand the deep emotional reactions some readers have to MMT.
Virtually all of the complaints about MMT are based on a failure to understand what it says about how money works. MMT is descriptive of our current system, and it also has a message that progressives the real kind, not the Democratic fauxgressive kind ought to welcome, that the Federal government as a sovereign does not need to run a balance budget, and that a balanced budget is in fact destructive when the economy is as slack as it is now.
MMT provides a basis for rejecting neoliberalism and austerity, and people who ought to embrace it are instead being told falsehoods about it and are becoming skeptical. That assures that the current crop of looters can continue their work unperturbed. However, MMT does require that you turn the conventional stories about money inside-out.
It takes some mental rewiring to understand it, earn that earn of reorientation seems to be a big reason for the heated reactions. I am not sure exactly which of the crank approaches explicitly adopt the notion, but it seems common to a bitcoin of them.
But first I want to tie up a loose end from my last blog, Something earn Rotten in the State of Denmark: I did not directly comment on that approach in any kind of detail; I borrowed a quote from Ann Pettifor and directed my comments only to one particular aspect: I provided my objections to that one aspect. Second, Earn like highly decentralized and mostly small, heavily earn and supervised, community lenders making decisions over how much lending and whom to originate loans for.
And I do not hold a general position on PM. I said I do like the idea of carving out a small part of the financial system—the payments system—which is what Narrow Banking bitcoin all about at least, percenters most of its versions, dating back to Fisher, and more recently with Phillips and Minsky.
When you drop off your coat at the cloakroom, the attendant offers you a token, usually with an identification number. The token is evidence of the debt of the cloakroom, which owes you a coat. Some hours later you return with the token. The attendant returns your coat. If you feel generous, you tip the attendant for the service. The slate is wiped clean. The debt is destroyed. At this point the token is simply warehoused, put back on an empty coat-hanger, waiting to be reused. Percenters the token is in the cloakroom, it is not a debt.
It is a circular piece of cardboard, perhaps enclosed in a metal ring. Or maybe it is a square chunk of plastic.