[lbo-talk] MMT's conservatives
marvgand at gmail.com
Wed Dec 14 19:13:01 PST 2011
Although Modern Monetary Theory is often identified as a liberal school of economics - "Keynesianism on steroids" - I was interested to learn that it is also drawing fiscal conservatives who are dismayed by the failure of the Hayekians to understand modern financial crises. I've attached a link to an article by Cullen Roche, who blogs at Pragmatic Capitalism. Roche is a professed admirer of the Austrians, but rejects their theories as relics of the gold standard "based on on a monetary system that is no longer applicable to modern fiat monetary systems" and sets out to explain how "MMT debunks much of their work." In particular, he sees the bankruptcy of the Austrians - which, by extension, can be applied to mainstream economics in general - as evident in their misplaced alarums about the hyperinflationary effects of quantitative easing in Japan and the US, and their stubborn insistence on austerity as the means of resolving the European debt crisis.
Whether the program offered by the MMT'ists - massive deficit spending funded by printing money on a far greater scale than has yet been tried, and disdain of the bond markets - is realistic or realizable has been hotly contested by Keynesian and Marxist economists. Whether the purpose of MMT, as described by Roche, "is to show how a modern government can be utilized by the private sector to increase its own prosperity" would be hotly contested in turn by its mostly liberal adherents.
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