Modern Monetary Theory - MMT

What is MMT and how could it completely change your perception of life in a nation with a sovereign fiat currency?

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MMT - What is it anyway??

"I've heard it called the Magic Money Tree"
"If we just keep printing money, we'll devalue the dollar!"
"Printing money will cause inflation!"
"OhEmGee the National Debt!!"

We've all heard loads of rumors...now it's time to get the truth!

Use the arrows or swipe through the slides to learn more.

Modern Monetary Theory or MMT

MMT is just a description of how sovereign fiat, floating exchange rate currencies like the US dollar actually work. MMT helps us move past the outdated gold-standard thinking that hasn't been right for decades.

It's not something to implement someday, it is exactly how our money works TODAY!!

Sovereign currency issuers...

Many governments issue their own currency. The sovereign issuer of a nation’s currency is nothing like the users of its currency - such as households, businesses, or state and local governments.

The currency issuer is not constrained to balanced budgeting in the same way as a currency user.

Government Solvency

Sovereign governments can never run out of the currency they issue.

No matter what politicians or talking heads on TV say, when a country issues its own sovereign currency, it can never run out.

That would be like the scorekeeper in baseball running out of points! Crazy, right?

Taxes and Federal Spending

Federal taxes are not collected in order for the government to spend later. They are actually deleted out of existence!

As a matter of fact, in order for us to pay taxes in the first place, the government, the CURRENCY ISSUER, has to create (or spend into existence) the money. Then, we CURRENCY USERS have to find a way to get some money to pay our taxes.

The National Debt

It is not possible for a currency issuer to go broke.

Most governments, most of the time, will run fiscal deficits. This is not a matter of concern, and is indeed a good thing, as it means most private sectors will be able to run the financial surpluses they wish to add to their net savings.

The government’s deficit is our surplus – we should be glad all that money hasn’t been taxed out of the economy!

Where Do I Learn More?

Look through our collection of articles below to learn more! They are conveniently categorized and there are plenty of resources from MMT Beginner to Macroeconomics Expert level.

Browse our MMT focused articles and filter them using the tabs at the top to find a specific topic.

Browse our MMT focused articles and filter them using the dropdown tab at the top to find a specific topic.

Money Growth Does Not Cause Inflation!

John T. Harvey November 15, 2021 Real Progressives

It is conventional wisdom that printing more money causes inflation. The only problem is, it’s not true. That’s not how inflation works.

A Framework for the Analysis of the Price Level and Inflation

Warren Mosler October 21, 2021 Economic Justice MMT Expert

Introduction The purpose of this chapter is to present a framework for the analysis of the price level and inflation. MMT (Modern Monetary Theory) is …

Money and Banking (Part 9 – Banking regulation)

Eric Tymoigne September 20, 2021 Economic Justice New Economic Perspectives

It may surprise you to know that the banking sector is one of the most regulated industries in the United States with a bank having to file regulatory documents with several agencies.

Money and Banking (Part 8 – The Private Banking Business)

Eric Tymoigne September 19, 2021 Economic Justice New Economic Perspectives

The US financial system is extremely complicated and this series shades light only on some corners of that system by focusing on the banking sector.

Money and Banking (Part 7 – Leverage)

Eric Tymoigne September 18, 2021 Economic Justice New Economic Perspectives

Given that the concept of leverage will be used often in the upcoming posts, this post spends some time explaining what leverage is and some of its impacts on the balance sheet of any economic unit.

Money and Banking (Part 6 – Treasury and Central Bank Interactions)

Eric Tymoigne September 17, 2021 Economic Justice New Economic Perspectives

The post studies how the Fed is involved in fiscal operations and how the U.S. Treasury is involved in monetary-policy operations. The extensive interaction between these two branches of the U.S. government is necessary for fiscal and monetary policies to work properly.

classroom frequently asked questions federal reserve

Money and Banking (Part 5 – FAQs about central banking)

Eric Tymoigne September 16, 2021 Economic Justice New Economic Perspectives

This post answers some FAQs about monetary policy and central banking. Each of them can be read independently.

Money and Banking (Part 4 – Monetary Policy Implementation)

Eric Tymoigne September 15, 2021 Economic Justice New Economic Perspectives

While details in operating procedures have changed through time, the federal funds rate has progressively gained in importance as a relevant operating tool since the 1920s.

Why we need to debunk the 'deficit myth' - BBC REEL

Government spending is increasing at an unprecedented rate to deal with the effects of the coronavirus pandemic. Many people worry this could burden future generations.

However, economist Stephanie Kelton, author of The Deficit Myth, argues that we need to rethink our attitudes towards government spending.

Could Modern Monetary Theory help us navigate our way out of this crisis – and even help build a fairer economy?