Adherents of MMT present their ideas in the form of a hydra. Shoot down one idea and another pops up that is just as preposterous. This is no accident.
Popular economic wisdom says central banks can counter harmful effects of inflation by raising interest rates. Unfortunately, such moves carry their own forms of misallocation of resources and capital.
Most people—and especially most economists—not only are ignorant of what money actually is, but how and why it became part of our economy in the first place.
Fed chairman Jerome Powell recently claimed they were "targeting" the "neutral" interest rate. The Fed cannot set or even know that rate, for it doesn't come from government authorities.
Money velocity's role in forcing up prices is misunderstood because today's monetary "authorities" fail to consider how new money is injected into the economy.
The "experts" solemnly tell us that deflation is even worse than inflation, and that deflation always will lead an economy into recession. The truth turns such "wisdom" upside down.
Advocates of modern monetary theory promise a cornucopia of goods and jobs if only the government has the "courage" to print money at will. Sound economic analysis, however, exposes MMT as fraudulent.
