MMT, The Saviour Of The BIden Plan?

[JackLuis]

[SIZBiden admin is ignoring obsolete economic dogma -- and the policy impacts are profound E="3"][/SIZE]

Congress has authorized $6 trillion in deficit spending to defeat the coronavirus. That's more than the United States spent fighting World War II, when $4 trillion of government spending released the country from the clutches of the Great Depression.

Naturally, politicians and pundits debate whether the amount is excessive. But implicit in their seemingly routine deficit debate is a remarkable shift: Inflation has replaced debt — the old stalking horse for defeating progressive legislation — as the primary concern with deficit spending.

It's a subtle change, with profound consequences. And it augurs the rise of a revolutionary approach to political economy, Modern Monetary Theory (MMT), as the dominant paradigm in the politics of money.

The work of John Maynard Keynes entered amid the economic crisis of the Great Depression and met the political demands of Roosevelt's New Deal. Later, as Keynesianism faltered in the 1970s, the monetarism of Milton Friedman and the fiscal policy of Arthur Laffer met the crisis of runaway inflation and provided economic legitimacy to the political agenda of the Reagan era.

Theories evolve, will the new view work?