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MMT Slays the Boogeyman Deficit

John T. Harvey’s argument writing in Forbes holds also for Ireland except we would need the support of the ECB as we gave away our monetary/fiscal sovereignty. He gives a simple and relatively complete description of how the money system really works. Hat Tip to Tom Hickey from Mike Norman Economics who says about it..

Like Bill Mitchell’s article at The Nation, it is concise, precise, and accessible. However, The Nation is a progressive venue, whereas Forbes occupies the other end of the spectrum. Quite a spread in only a matter of days. Word is getting out on many fronts as editors notice and pick up on the growing momentum.

Prof. Harvey’s column is a good one to pass on to MMT skeptics in that he anticipates the common objections voiced by neoliberals and conservatives, as well as progressives with neoliberal tendencies. The piece is well argued, and anyone who is open can readily absorb the policy message, regardless of their persuasion. The comments I saw there are positive, at least so far.

Here is John Harvey’s conclusion

… In conclusion, I am not saying that allowing the government to spend at will may not lead to abuses. As suggested above, the balanced-budget myth was perpetuated by the likes of Paul Samuelson for a reason: It was meant to act as an indirect constraint on federal power. That’s all well and good when the myth doesn’t cause more harm than good. In order to keep my children in bed every night, I could tell them that monsters congregate in their rooms after dark. But what would happen if there were a fire and my children refused to leave? The result would be horrifying. We have a fire right now, and, jokes about politicians aside, we aren’t dealing with children. If we need a means of corralling power, and we certainly do in both the private and public sectors, then let it be accomplished in a way that deals honestly and pragmatically with the real problem. The lives of almost 14 million people and their families depend on this. Perhaps the cruelest irony is that of all the problems we face today, this is the easiest one to solve–yet we are doing our very best to make it much, much worse.

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