China’s leaders seem to understand Modern Monetary Theory and are using it to their advantage.  Ellen Brown has her own take on it but we can see that the accounting reality of the Chinese money systems that MMT tells us are the actual realities are true also for any sovereign governments that cares to use the knowledge.

CHINA’S CREATIVE ACCOUNTING: USING DEBT AS A TOOL FOR ECONOMIC DEVELOPMENT

Ellen Brown, October 28th, 2010
http://www.webofdebt.com/articles/creative_accounting.php

China may be as heavily in debt as we are. It just has a different way of keeping its books — which makes a high-profile political ad sponsored by Citizens Against Government Waste, a fiscally conservative think tank, particularly ironic. Set in a lecture hall in China in 2030, the controversial ad shows a Chinese professor lecturing on the fall of empires: Greece, Rome, Great Britain, the United States . . . .

“They all make the same mistakes,” he says. “Turning their backs on the principles that made them great. America tried to spend and tax itself out of a great recession. Enormous so-called stimulus spending, massive changes to health care, government takeover of private industries, and crushing debt.”

Of course, he says, because the Chinese owned the debt, they are now masters of the Americans. The students laugh. The ad concludes, “You can change the future. You have to.”  (link to full article)