April 20, 2021

MMT has been conclusively refuted and MMTers can do NOTHING about it

Comment on James Galbraith on ‘Who’s Afraid of MMT?’*


James Galbraith summarizes: “What, then, is MMT? Contrary to the claims of King and Rajan, it is not a policy slogan. Rather, it is a body of theory in Keynes’s monetary tradition, which includes such eminent thinkers as the American economist Hyman Minsky and Wynne Godley of the UK Treasury and the University of Cambridge. MMT describes how ‘modern’ governments and central banks actually work, and how changes in their balance sheets are mirrored by changes in the balance sheets of the public ― an application of double-entry bookkeeping to economic thought. Thus, as Kelton writes in the plainest English, the deficit of the government is the surplus of the private sector, and vice versa.”

Yes, indeed that's MMT in a nutshell and the last sentence is provably false because MMTers are too stupid for the elementary algebra that underlies macroeconomic bookkeeping. Neither the followers of Stephanie Kelton et al. nor the critics of MMT ever spotted the blunder in the formal foundations that invalidates the whole approach.

So MMT is scientifically worthless and can be unceremoniously buried at the Flat-Earth-Cemetery. Politically, though, MMT has still some use-value for fooling WeThePeople. As a consequence, only stupid/corrupt agenda pushers defend or criticize MMT. No scientist wastes time with this proto-scientific garbage.

For those who want to check the refutation in greater detail here are the relevant references:


Egmont Kakarot-Handtke



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#PointOfProof
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