Mises Institute Fellow Patrick Newman joins Bob to discuss a recent tweet from Stephanie Kelton, which argued that the government’s “red ink makes our black ink possible.” Patrick and Bob point out that these MMT tautologies are very misleading at best. Patrick also lays out the argument in his journal article, saying that MMT’s debt monetization won’t cause a boom-bust cycle, but will still reduce living standards.
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Chapters
00:00 Introduction
01:34 MMT Uses the Bad Parts of Keynsianism
07:50 Are Government Deficits Linked to Non-Governmental Surpluses?
15:33 Austrian Argument vs. MMT Argument
23:26 MMTers say Gov’t Deficits Don’t Matter
33:27 Differences in New-Keynesian and MMT Theory
42:13 Downsides of Monetizing Deficits