Thrice mariner has come across the mention of something called ‘Modern Monetary Theory’ (MMT). He began to research MMT and found it to be in the philosophical realm of economics. The word ‘theory’ means it hasn’t really been tried in large economies. To be simplistic, it states the government owns all money. It uses the money to manage the economy. For example, if everyone doesn’t have a job, the government allocates funds to repair that situation; if inflation begins to rise, the government raises taxes to reduce money in the economy; if there is a market need, the government underwrites the establishment of a solution to satisfy that market.
As a real world example, as mariner writes this post the federal government is preparing to fund rapid development of 5G technology to remain competitive in a new world of scary data sharing. In communist China, this is occurring as well except that it is easier to launch because all industries are beholden to the government in the first place. In the US, a democracy, it is tougher for the federal government to manage private industry, to wit, the giant data tech corporations, especially Facebook which considers its corporation a separate nation.
Again simply, economic power and decision making are transferred from corporations to the government because all money belongs to the government. If a corporation is deviant from government policy, the government can invoke taxes and legal action. MMT is the opposite of corporatism.
MMT has crept into news resources because journalists have been trying to unravel Bernie’s logic behind his vision of the economic future. Turns out he knows Stephanie Kelton, an economics professor at Stony Brook University, who is a famous proponent of Modern Monetary Theory in the US.
Mike Bloomberg’s cable education program about MMT suggests that since Nixon took the US dollar off the gold standard, there is no good way to standardize a dollar’s value to the economy. MMT, in theory, says that if a government owns all money, then decisions can be made based on a universal market value determined by the government.
Being aware as everyone should be that the global economy is showing threadbare spots and wavering under any kind of issue, everyone should be asking “What will be the economic reality for my children?” Hah! Is everyone ready to go back to college? It should be free given the paucity of comprehension and leadership among our elected officials. One certainly needs more education to know how to run this democracy – television news isn’t the answer!