This Executive MMT syllabus succinctly conveys the elements of MMT
staged to be most salient for policy analysis. It is designed to quickly lay the most important logical
building blocks first, and to be free-standing and correct if
interrupted at any point. Scores of candidates for public office in
Virginia and nationally have modified their platforms after the
training this outline supports.
The stages are as follows: derive a monetized economy from
sovereign state power, note the print on a dollar bill confirms the US
currency is a permission to have liabilities canceled, then define
the federal deficit, its relation to current productive capacity and national debt and derive that unemployment
is the fault of the currency issuer and that the Job Guarantee employed buffer stock is a superior price stability mechanism. Optionally, derive the private
banking system as bankers underwriting the credible beliefs of
entrepreneurs that they can design schemes to get money from
customers' pockets, with the central bank accommodating money
creation to keep the payment system sound.
The following resources provide a reference for those who have been through this introduction:
- Christine Desan historically illuminating Axiom 1 of state money. State Theory of Money
- Warren Mosler whitepaper closely tracked by our presentation.
- Bill Mitchell and Warren Mosler following our executive outline
, with links.
- Federal Reserve on reserve accounts, security accounts, TT and L accounts
to buffer taking reserves out of the banking system, and Stephanie Kelton's landmark technical paper
showing the net balance sheet effects proving taxing and borrowing doesn't pay for anything. NY Fed on primary dealers
who bridge between the Treasury issuing securities and the Fed providing reserves. Wray providing an overview in these terms
with more references. For more detail in textbook form, Eric Tymoign Money and Banking
- Scott Fullwiler on financial ability to pay, legal authority to pay, & productive capacity
- Fadhel Kaboub on Venezuela and degrees of currency sovereignty (though Warren Mosler suggests it is less confusing to simply speak about what can and can't be done under various conditions rather than defining degrees of sovereignty).
- Technical links on inflation. Basically, watch out for it if running up bidding against capacity, but it isn't as simple as "printing too much money."
- Rebuttal of Carbon Fee and Dividend followed by how expanding capacity through GND fights inflation in energy, education, housing, health, and costs in health and community, and "how to pay for it."
- The trade deficit and the imperative to run a budget deficit if we want to enjoy foreign goods. Sectoral Balances
- The private banking system and endogenous money, a technical reference on private banking monetary creation by the Bank of England. Financial Fragility
from the FDIC
Federal Reserve interest on reserves
Federal Reserve sets reserve requirement to zero.
- Nuts and bolts on central bank monetary operations
- Lecture by Fadhel Kaboub covering most of these items starting from a debt and "how to pay for it" perspective. GND and Functional Finance
- If you have doubts, embedded in what we left out in order to focus MMT for US congressional candidates: Rohan Gray.
- L. Randall Wray
, picking up where we did and continuing with policy implications, ending with China.
Words to help you speak and think clearly:
- COVID-19 crisis: Basically what we need right now is a massive "SOLVENCY, pro-quarantine package."
Not a "stimulus" package.
Now, after this blows over, & all see "who can pay for it" and how. Then we start genuine UBS (universal basic services) JG, public projects etc. (thanks Clint Ballinger)
- Emergency Income Support, avoid UBI like a virus.
- Equivalent Replacement Income, not Basic Income. (thanks Richard Dien Winfield
- Public money, never tax payer money.
- Current productive capacity, not resources.
- Criminal legal system, not criminal justice system.
- Job Guarantee or on-the-job training, not job training.
- Climate crisis, not global warming.
- Tax the rich because they are too rich, not to pay for things.
- Spend for the public purpose, don't lend.
- Job Guarantee, not UBI.
- Public choices, not private/price incentives.
- Money comes from spending. It doesn't grow on rich people.
- Main Street businesses are built on sales, not cutting costs.
- Student debt is punishment for aspiring above one's station.
- Money doesn't have value, it measures value.
- Appropriations pay for things, not taxes.
- Tax so they don't take more than their fair share, not pay their fair share
- Spend on the millitary and criminal legal system. Invest in
infrastructure. Serve people. Care for the vulnerable.
- Financial balances, not budget.
- Predistribution, not redistribution.
- Rights we can demand, not charity expecting gratitude.
- Public provision of public purpose, not public/private
Addressing points of confusion and refuting foes
If you think you have found a refutation for "how to pay for it, and why that's the wrong question," please consult with the person who wrote this syllabus before falling in love with it, because you can be pretty sure it didn't work.
- L. Randall Wray's submitted testimony
before the House Budget Committee. Video of Hearing
Reexamining the Economic Costs of Debt.
- MMT key resources organized as a debate brief: MMT FAQs
- Narrative version of the above written by a non-academic financial sector professional.
- In the past 20 years, no element of MMT has been successfully refuted. Confusion has, however, been sown by people with platforms such as Matt Bruenig, Paul Krugman 2, 3, Doug Henwood, 2
Reliable Sources on MMT The following comprise the public
core of the Kansas City MMT perspective. They have all written
extensively and bear much of the weight of carrying forward MMT in the
rapidly changing political sphere. Thus, their writings should be
consulted rather than trying to reach them directly.
The following groups are eager to get MMT right and spread the word among activists. They are glad to engage and can benefit from the practice.
This site © 2019, 2020 Panayotis Giannakouros