Modern Monetary Theory has officially arrived. That theory, embraced by ignoramuses like Alexandria Ocasio-Cortez but by no economists, to my knowledge, holds that a government can just print money and distribute it to
taxpayers Democratic Party constituencies, with no ill effects. And it will be real money, representing wealth, that will raise everyone’s standard of living.
It is hard to imagine anyone being dumb enough to fall for such nonsense (AOC and the Squad excepted), but the Chairman of the House Budget Committee has bought it hook, line and sinker:
House Democrats argue “we can’t go bankrupt because we have the power to create as much money as we need to spend…”
🤦And he’s serious. pic.twitter.com/LdFpCwGclT
— House Ed & Labor Republicans (@EdLaborGOP) September 9, 2021
One obvious question is, if the government can just print money and thereby create wealth, why do we have taxes at all? To be consistent, the Democrats should advocate abolishing the federal personal and corporate income taxes, as well as the federal estate tax.
Of course, Modern Monetary Theory is not modern at all. It has been tried by desperate governments for several centuries, and arguably back to ancient times. Just ask residents of the Weimar Republic, Argentina, Zimbabwe and Venezuela, to name only a few of the most famous instances, how Modern Monetary Theory worked out for them.
Although, to be fair, none of those countries had anything like our $28 trillion national debt. As we cruise in uncharted waters, we are passing the shipwrecked hulks of governments that embraced Modern Monetary Theory, but to a more modest degree than the Democratic Party now contemplates.