Stephen Yearwood
1 min readMar 17, 2024

--

First, thanks for a seriously considered Reply.

As to your question, MMT was gaining traction as a possible prescriptive concept, thanks largely to Dr. Kelton, when the Covid pandemic developed. To an extent it was the conceptual basis for the idea of (essentially) creating money to make the payments to people and businesses as compensation when people were pretty much required to stay at home.

The inflation that has ensued has demonstrated the paradigmatic weakness of MMT as it has existed up till now. Its only mechanism for withdrawing money from the economy to curb inflation has been taxes. Politically, in the U.S., where MMT fits best even as a descriptive paradigm, as long as that is the case it will always prevent MMT from being fully accepted as a prescriptive paradigm. At the same time, creating assets ('debt') to monetize the obligations of the central government has its own political implications--for both the left and the right. (Decrying 'the debt' is always a political winner on the 'right', and for the 'left' using assets to fund government means using taxes collected from working-class people to make payments to their economic oppressors.)

The paradigm I had developed (which merges with MMT in understanding 'what money is': a societal artefact that exists to facilitate economic activity) takes both taxes and 'debt' out of the process of using the creation of money to fund a humanely functioning society.

--

--

Stephen Yearwood
Stephen Yearwood

Written by Stephen Yearwood

M.A. in political economy (money/distributive justice) "Please don't confront me with my failures/ I'm aware of them" from "These Days," as sung by Gregg Allman

Responses (1)