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Is Modern Monetary Theory Pathological Mendacity?


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Is Modern Monetary Theory Pathological Mendacity?

The anointed — from academic institutions to the corridors of power — have terrorized the public with experts who spin narratives and sell hopes and dreams to institute a leftist utopia. But while the militant progressives have fallen short of installing a regime comprising Antifa boy scouts and Senator Bernie Sanders (I-VT) bobbysoxers, they have incrementally imposed a diverse array of socialist schemes over the years that quickly metastasized into abject failures. The shortcomings of these pet projects have been exposed in the public arena and at the ballot box, forcing the left to raise the white flag. But avid readers of The Daily Worker do not think they have lost the war. Instead, they are turning to Frankenstein economic panaceas such as modern monetary theory (MMT) to realize their visions.

When All Else Fails

The basis of modern monetary theory, which is another level of the Keynesian prescription, is that you can never run out of money because you create the money you spend. This quasi-counterfeiting proposal was passed around as quackery a decade ago, but in the aftermath of the COVID-19 pandemic, the left is accelerating the MMT blitzkrieg in the mainstream media, particularly in economist Stephanie Kelton’s new book, The Deficit Myth. It is a hot take that tries to persuade the public that it can have something for nothing and attempts to dispel one of the greatest and simplest economic lessons: There ain’t no such thing as a free lunch.

You would think that the forever money-printers would be euphoric over the Federal Reserve’s unlimited quantitative easing campaign following the coronavirus-induced market meltdown. The U.S. central bank has created trillions of dollars out of thin air, slashed interest rates to nearly zero, and defied rudimentary economic wisdom. But they refused to give it top Marx because it did not go far enough, shrugging at record money production in such a short amount of time.

But the Powell Put gave the progressives an opening. If the Fed can crank out $7 trillion in a few weeks to bail out Wall Street, how come it cannot churn out $7 trillion — and more! — to check off leftism’s wish list: free tuition, the Green New Deal, a basic-income guarantee, and unlimited Starbucks lattes. They have discovered that Uncle Sam could never afford the grandiose schemes proposed by Sanders or Representative Alexandria Ocasio-Cortez (D-NY), no matter how much you penalize success. The left is relying on the magical powers of the printing press. The basement inside the Eccles Building would be remodeled into a congregation hall for Alice in Wonderland economic thinkers, deifying the printing machine.

The MMT whippersnappers share the same philosophy of former Vice President Dick Cheney: Deficits do not matter. They are handwringing about state solvency, which is fictitious and fearmongering because the government already controls the currency, so spending does not need to be constrained by the principles of Accounting 101 or basic economics. Of course, you are already kidding yourself if you think Republicans and Democrats believe they are constrained by anything.

It is true that MMT does adopt a slightly different approach to Keynesianism, but Mises Institute President Jeff Deist said it best: MMT is not modern, not monetary, and not a theory.

MMT’s Road to Socialism

Chico Marx famously quipped in the classic 1933 film Duck Soup, “Who ya going to believe, me or your own eyes?” Whether it is Social Security or the United Nations, the progressive doctrine of the last century has failed due to bankruptcy — both fiscal and principle. Rather than admit leftism does not work, the MMT crusaders are resorting to backroom shenanigans and transforming the U.S. Treasury into a clip joint to achieve their socialist endgame. MMT is already an expansion of the current money-printing model, but now it exhibits pathological mendacity: You can never run out of money.

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Read more from Andrew Moran.




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