MMT stands for ‘Modern Monetary Theory’, and it may be the next must-know term to know and understand before it becomes mainstream.
OK, but what exactly is Modern Monetary Theory?
The Roosevelt Institute published an article about it eight years ago, and it simply describes a school of thought in macro-economic thinking that revolves around fiat currency and how sovereign governments issue them:
‘They insist that the notion of “fiscal sustainability” or “solvency” is not applicable to a sovereign government — which cannot be forced into involuntary default on debts denominated in its own currency. Such a government spends by crediting bank accounts or issuing paper currency. It can never run out of the “keystrokes” it uses to credit bank accounts, and so long as it can find paper and ink, it can issue paper currency. These, we believe, are simple statements that should be completely noncontroversial. And this …