Economic Update: Government Deficits; Why They Happen, Who Benefits From Them, and MMT
Richard Wolff mentions the printing of money occasionally, but he never squares that with the government supposedly needing to tax and/or borrow first before it can spend.
He spends the last two minutes talking about MMT, but not as a theory of fiat money; instead as a novel monetary policy proposed by “progressive-minded economists.”
Somewhere in there he also repeats the common fallacy that what banks lend is other people’s savings. They don’t. The money they lend is created out of thin air, and the “money multiplier” is a myth.
I’m just a technerd who’s never taken an economics course, and I grind my teeth every time this expert botches these fundamentals. Why Michael Hudson and Radhika Desai never push back on him when they do talks together is a mystery to me.
Are we talking about the MMT of Randall Wray and Bill Mitchell? What do they cover of significance that Marx does not? Does not a monetary theory lacking consideration for say international trade then deficient? Does a theory of money not reflecting class struggle leave wanting for a more comprehensive theory?
I’m only talking about the core of MMT, not the liberal nonsense liberals pile on top of it.
Yes, as I’ve been saying for the last year, it’s not a comprehensive framework. All it does is explain that the state creates fiat money out of thin air, and that state destroys money through taxes.