Is Modern Monetary Theory A Valid Policy?

The United States government is, yet again, facing a budget crisis. Government funding is set to expire on December 3, 2021 and Congress has a deadline of December 15 to raise the debt ceiling. Otherwise, the U.S. will default on its debts, and a worldwide financial collapse becomes a possibility.

Modern Monetary Theory (MMT) is an economic school of thought based on John Maynard Keynes’s writings which has provided theoretical legitimacy to policymaking based on deficit spending. The theory goes that because modern states control currency and have the power to levy taxes, they can print as much money as they want.

In this video, we enlist Professor Antony Davies to explain why real-world economics aren’t so simple — and why, under this theory supported by politicians like Alexandria Ocasio-Cortez (AOC) and Bernie Sanders, we would end up with more hand grenades and fewer avocadoes.

See more from Professor Davies: 10 Myths About Government Debt

Of course, MMTers, led by Professor Stephanie Kelton, a senior economic advisor to the Sanders presidential campaigns, make impassioned arguments, too. So what do you think? Watch our analysis, do some research of your own, and tell us in the comments: Is Modern Monetary Theory valid, or would it lead to financial ruin?

#ModernMonetaryTheory #MMT #budgetcrisis #debtceiling #inflation