MMT Explainers

A series of short explainers about the major aspects of modern monetary theory including where money comes from, what tax is really for, what the government deficit and debt is, and why the economy does not work how you think it does.

A balanced deficit

2 months ago
The word "deficit" sounds bad. At the individual level, it is - consistently spending more than you earn means spiraling debt, misery and likely a pretty shit outlook. But a government that issues its own currency isn't like a household, so does a deficit matter?

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Bank loans vs Government spending

2 months ago
In a previous post we saw that governments can create money without borrowing or taxing first. But they're not the only money creators - banks do it too, just in a fundamentally different way.

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The Borrowers

2 months ago
The Goverment doesn't need to borrow in order to spend. So what is that thing everyone calls borrowing then?

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So what the hell does tax do then?

2 months ago
What is tax for if not for funding spending on public services? If we don't need it to pay for things then why do we have taxes at all?

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The myth of taxpayers money

2 months ago
Where does it come from, where does it go? Where does it come from, taxpayers dough.

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Your country is not your home

2 months ago
There's one particularly popular and potent myth about the economy which gets repeated by journalists, politicians, even some economists, again and again. It's the idea that the government is basically like a big household. It has money coming in and money going out, and it needs to balance the books, not get into too much debt, and not overspend.

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The IQ economy

3 months ago
Paving the way for a potential series of MMT explainers I want to first describe why GDP is a terrible way to measure how well an economy is doing

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