MMR - An Evolution of MMT

[moda0306]

Recently there has been a breakoff from MMT that I think many readers here would appreciate.  MMT asserts a few things that were troublesome to some of our members (notably, the more Austrian-leaning ones) in discussion of modern money:

1) Gov't has a money monopoly

2) Gov't drives demand for currency through taxation

3) A job-guarantee is central to public purpose.

4) We can't save without government deficits.

5) "Vertical money" (base gov't currency and treasury bonds (NOT bank loans)) are what drive the real economy.

I'm simplifying some of these assertions.  But they've been addressed by MMR in ways that I think many members here with more hard-money, libertarian leanings would greatly appreciate.  The really dive into how the private sector and privately-loaned money DRIVES the economy through driving investment, and that deficit spending creates an accomidating cushion in the form of base currency to service these loans.  They also have reformed the accouint-balance equation in such a way that indicates that the private sector investment drives savings (even if the private sector can't "net-save" without a deficit from gov't or foreign sectors), and the government plays in integral but more accomodating than driving role than MMT would assert.

I recommend anybody interested in this stuff to follow it, in general, at monetaryrealism.com.  The conversations there get a little heated at times, but for the most part they stay similar to the way they are here.

More specifically, for those who have left MMT with a slightly bitter taste in their mouth regarding some of their more aggressive assertions, I definitely recommend this incredibly well-thought out (but incredibly long and a bit Wonkish) post at the site by one of the most articulate economic voices I've read in a long time:

http://monetaryrealism.com/jkh-on-the-r ... debates-2/