Modern monetary theory (MMT)

Modern monetary theory, or MMT, has become popular on the left, both in the UK and abroad. (Wags say that it stands for "magic money tree".) 

Modern Monetary theory, or MMT, has become popular on the left, both in the UK and abroad. (Wags say that it stands for "magic money tree".)

Central to MMT is the fact that it is governments that designate the one official currency for a country by accepting only that currency for the payment of taxes. And "monetarily sovereign" governments ie, those that issue their own currency, such as the US and Britain, as opposed to those that don't, such as Greece, which uses the euro can print as much of that money as they like. They do not need to tax or borrow they can just issue more money. Monetarily sovereign governments do not, it is obvious from this analysis, face constraints on their ability to create money and spend it.

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