November 12, 2018

MMT in a nutshell

Comment on Tim Worstall on ‘The Problem With Modern Monetary Theory’

Blog-Reference and Blog-Reference

Tim Worstall argues: “Much of Modern Monetary Theory is, as its proponents insist, simply true. Governments can create more of their own fiat currency at will.”

This is a shared and empirically corroborated insight of counterfeiters and governments since time immemorial. However, MMT claims to be a theory and the fact of the matter is that it does not satisfy the scientific criteria of material and formal consistency. In other words, MMT is provably false. MMTers are simply too stupid for the elementary mathematics that underlies macroeconomics.#1, #2

As a result, MMT policy has NO sound scientific foundations. It is only operationally true.

Technically speaking, MMT is based on this sectoral balances equation (X−M)+(G−T)+(I−S)=0, and this equation is mathematically false. The correct balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0 and from it follows that Public Deficit = Private Profit. In other words, the MMT policy of deficit-spending/money-creation boils down to money-making for the Oligarchy.#3

For the general public, the essential points are
• MMT has NO sound scientific foundations,
• MMT’s sectoral balances equations are mathematically false,
• MMTers violate scientific standards on a daily basis,
• MMT is political agenda pushing in a scientific bluff package,
• MMT policy is NOT for the benefit of WeThePeople but of the Oligarchy,
• MMT is just another political fraud.#4

Egmont Kakarot-Handtke


#1 MMT = Modern Monetary Trash
#2 Wikipedia and the promotion of economists’ idiotism
#3 Keynes, Lerner, MMT, Trump and exploding profit
#4 For the full-spectrum refutation of MMT see cross-references MMT

Related '#PublicDeficitIsPrivateProfit #MMT #JustAnotherFraud' and 'MMT: A free lunch for the Oligarchy' and 'The MMT defenders of interest on public debt: stupid or corrupt or both?' and 'Keynes, Kalecki, MMT and the invention of the perpetual profit machine' and 'MMT-Progressives: stupid or corrupt or both?' and 'How MMT makes everybody happy' and 'Stephanie Kelton on how to become fabulously wealthy'.

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