I’ve been following some of the literature (and also blogs ) on MMT off and on for about 3 years. I sort of agree with Brad Delong (economic historian at UC Berkeley) that its ‘warmed over keynesianism’ (as noted in OP it it could also be called ‘keynsianism on stilts’. (Unlike Keynes, MMT people say just keep printing money, all day, everyday since you can never run out. Although I mostly disagree with Niall Ferguson he pointed out this was tried in the past, and Ferguson argues in his first, and one reasonable book that it was this view that led to the collapse of the British Empire.)
MMT partly owes its creation to Arthur Laffer (of the ‘laffer curve’ under Reagen (‘supply side economics’) who argued that by cutting taxes (especially on the rich) the government raises more revenue due to economic growth—which in my view has been disproven by many mainstream economists (although Trump is following that policy).
MMT ‘s main founder is W Mosler --friend of Laffer—is a wealthy hedge fund owner/manager who keeps his money off shore in tax free accounts. He more or less funded the ‘economists’ (eg R Wray of U Mo and S Kelton now in NYC ) who are MMT’s main figure heads.
Neither has much of a background in quantitative economics—they are primarily economic historians. You won’t find a single mathematical formula in most of their papers. (Instead you will find many discussions of 1800′s economics—they remind me of many marxists and free market and libertarian economists who try to analyze the US or world economy of 2020 in terms of adam smith (‘division of labor’, ‘the invisible hand’, the person who makes a safety pin cooperating with someone who brings food from the farm in a horse and buggy) and marx (e.g. an example of someone exchanging 4 pounds or iron for 3 sacks of corn is supposed to explain silicon valley) .
My view is the main ideas or rationals behind MMT is to
1) stop taxing the rich (this is why they say taxes have no affect on the government budget—and there is a small element of truth in that—Mosler doesn’t want to pay taxes—he says rather than take his money, government should just print more.)
2) ‘help the poor’ , ′ people with no or low income’, and the ‘unemployed’, by giving them a ‘guaranteed job’ paid for not with money from progressive taxes, but just printed by the govt. These jobs could be something like FDR’s new deal , Sanders-AOC’s green new deal, or they could be like indentured servitude on some billionaire’s such as Mosler’s plantation. (My impression is the MMT’ers like the plantation idea the best.)
MMTers are adamantly against a Universal basic Income—they feel it makes people feel better to ‘work for a living’ even if its on a plantation picking cotton than to just get ‘free money’—hedge fund managers have to work for their money (eg collect interest).
‘Economists’ like Wray and Kelton also work—they regurgitate ancient economic literature, relabel it as MMT, make podcasts, do TED talks, write blog posts, write papers in non-mathematical economic history journals , and become media stars. I don’t view what they do as a very productive job.
Unfortunately mainstream economists’ critiques of MMT (eg Krugman) come from a perspective which is equally flawed.
(I support a Universal Basic Income (uBI—not exactly the same as Unconditional basic income, or UBI, promoted by Yang , though the 2 can be made equivalent if viewed as a negative income tax—Hayek and Friedman) but unfortunately proponents of BI in general also have almost no quantitative analyses. Most of them just make general—but valid—arguments that if people have a basic income they are less likely to go into a life of crime and can spend more time dealing with local issues—eg family, community improvement , etc. Studies have shown also that people with a BI actually work more than those without one—but they choose which jobs to take—and they keep them—if you are forced to work a job you don’t like, you likely will quit very soon.)
The discussions around MMT, UBI or BI, and mainstream neoclassical economic theory are all ideologically biased. They all preach to their respective choirs and echo chambers—and they all have big ‘megachurches’ with devout followers.
I’ve been following some of the literature (and also blogs ) on MMT off and on for about 3 years. I sort of agree with Brad Delong (economic historian at UC Berkeley) that its ‘warmed over keynesianism’ (as noted in OP it it could also be called ‘keynsianism on stilts’. (Unlike Keynes, MMT people say just keep printing money, all day, everyday since you can never run out. Although I mostly disagree with Niall Ferguson he pointed out this was tried in the past, and Ferguson argues in his first, and one reasonable book that it was this view that led to the collapse of the British Empire.)
MMT partly owes its creation to Arthur Laffer (of the ‘laffer curve’ under Reagen (‘supply side economics’) who argued that by cutting taxes (especially on the rich) the government raises more revenue due to economic growth—which in my view has been disproven by many mainstream economists (although Trump is following that policy).
MMT ‘s main founder is W Mosler --friend of Laffer—is a wealthy hedge fund owner/manager who keeps his money off shore in tax free accounts. He more or less funded the ‘economists’ (eg R Wray of U Mo and S Kelton now in NYC ) who are MMT’s main figure heads.
Neither has much of a background in quantitative economics—they are primarily economic historians. You won’t find a single mathematical formula in most of their papers. (Instead you will find many discussions of 1800′s economics—they remind me of many marxists and free market and libertarian economists who try to analyze the US or world economy of 2020 in terms of adam smith (‘division of labor’, ‘the invisible hand’, the person who makes a safety pin cooperating with someone who brings food from the farm in a horse and buggy) and marx (e.g. an example of someone exchanging 4 pounds or iron for 3 sacks of corn is supposed to explain silicon valley) .
My view is the main ideas or rationals behind MMT is to
1) stop taxing the rich (this is why they say taxes have no affect on the government budget—and there is a small element of truth in that—Mosler doesn’t want to pay taxes—he says rather than take his money, government should just print more.)
2) ‘help the poor’ , ′ people with no or low income’, and the ‘unemployed’, by giving them a ‘guaranteed job’ paid for not with money from progressive taxes, but just printed by the govt. These jobs could be something like FDR’s new deal , Sanders-AOC’s green new deal, or they could be like indentured servitude on some billionaire’s such as Mosler’s plantation. (My impression is the MMT’ers like the plantation idea the best.)
MMTers are adamantly against a Universal basic Income—they feel it makes people feel better to ‘work for a living’ even if its on a plantation picking cotton than to just get ‘free money’—hedge fund managers have to work for their money (eg collect interest).
‘Economists’ like Wray and Kelton also work—they regurgitate ancient economic literature, relabel it as MMT, make podcasts, do TED talks, write blog posts, write papers in non-mathematical economic history journals , and become media stars. I don’t view what they do as a very productive job.
Unfortunately mainstream economists’ critiques of MMT (eg Krugman) come from a perspective which is equally flawed.
(I support a Universal Basic Income (uBI—not exactly the same as Unconditional basic income, or UBI, promoted by Yang , though the 2 can be made equivalent if viewed as a negative income tax—Hayek and Friedman) but unfortunately proponents of BI in general also have almost no quantitative analyses. Most of them just make general—but valid—arguments that if people have a basic income they are less likely to go into a life of crime and can spend more time dealing with local issues—eg family, community improvement , etc. Studies have shown also that people with a BI actually work more than those without one—but they choose which jobs to take—and they keep them—if you are forced to work a job you don’t like, you likely will quit very soon.)
The discussions around MMT, UBI or BI, and mainstream neoclassical economic theory are all ideologically biased. They all preach to their respective choirs and echo chambers—and they all have big ‘megachurches’ with devout followers.