THERE’S NOTHING MODERN ABOUT MMT

MODERN MONETARY THEORY (MMT) tells us that governments should finance public spending by creating money. To prevent inflation, MMT advocates say, the government should use taxes to siphon off excess purchasing power, which supposedly would enable the public sector to greatly expand its activities, eliminating the scourge of underemployment.

At a time of skyrocketing national debt and mild inflation, what was once a fringe school of thought with few adherents has captured the public imagination. Rebutting MMT’s claims requires a little history, which shows there is nothing “modern” about its prescriptions.

MMT promoters, who are mostly