Modern Monetary Theory

Discussion of modern monetary theory. Does it work? Can it be of any actual use in the real world? Could it help us plan a better economy, maybe not one based on perpetual growth? Starting with some essential MMT explainers and building from there.

The Full Funding Rule

1 month ago
Since 1981, UK governments have followed an obscure Treasury rule that converts democratic spending decisions into private profit. The Full Funding Rule isn't legally binding, but it's constrained every Chancellor since Thatcher. What is it, why does it exist, and could we simply... stop following it?

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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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The rest is motivated reasoning

2 months ago
In which Rory Stewart is revealed to be a bit of a tit in spite of his 'sensible centrist charade

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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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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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