Funding Government spending[edit]

This needs work, as the editors note. I suggest it be changed as follows

:Mainstream Keynesian:

Sovereign governments fund spending by raising taxes and other imposts, by borrowing (issuing bonds), or by money creation (overt monetary financing, or 'monetising the debt') (cite Mankiw)

:MMT:

All sovereign government spending is funded by money creation; taxes are levied to free real resources and control inflation; bonds are issued to provide an interest-bearing alternative to cash. (cite Mitchell Wray and Watts page 335)Prosopon (talk) 11:17, 21 January 2023 (UTC)[reply]

Lacks a neutral viewpoint[edit]

The tone of this page, from the opening paragraph, presents MMT to non-academic audiences as a "theory" in opposition to a presumed "reality" which is referenced as "mainstream economics".

This is wrong. Economics is not a hard science and everything which passes for "mainstream" economics is as untested and assumed as MMT.

MMT should be presented as an alternative model, which it is, rather than a lesser idea which needs to displace convention in order to be taken seriously.

MMT will never, and can never, replace other models. Nor can older models be assumed to be more valid than newer ones. It should be treated like plate-tectonics before widespread acceptance, not as currently here, flat-earth theory. 176.253.22.20 (talk) 15:14, 28 May 2023 (UTC)[reply]

It's not an "alternative model" insofar as it adopts a principle in contradiction with prior theories. That makes it a distinct theory subject to testing and falsification. But perhaps one should not be surprised that an MMT advocate, finding acceptance of the theory lacking, demands to borrow it on the credit of geologists. 67.180.143.89 (talk) 00:27, 22 July 2023 (UTC)[reply]

"When a government spends money, its treasury debits its operating account at the central bank"[edit]

I believe this should be credits both in the quoted passage and a bit later: the treasury transfers value to a payee from its operating account, thereby reducing the normal balance of the account, which is a cash-like asset of the treasury. The treasury is not itself the central bank; it is the office of the government that deals with the bank. 67.180.143.89 (talk) 00:13, 22 July 2023 (UTC)[reply]

Mischaracterization of government debt[edit]

In the into, the article states “…governments do not need to worry about accumulating debt…”. This is not quite right as MMT has always posited that unchecked government debt leads to unchecked printing which leads to inflation. However, what MMT does state here is that governments that control their own currency can never become insolvent. This does not equate to no worry about accumulating debt except within non-inflationary bounds. 2600:8801:AF7E:4000:BC81:203C:73B1:3AAE (talk) 14:40, 2 January 2024 (UTC)[reply]

Indeed. In fact Warren Mosler has pointed out that increases in public debt can cause inflation via increased interest payments, particularly when accompanied by increased interest rates. So the MMT perspective is that public deficits could be "financed" by money creation, without matching bond sales, in order to reduce the risk of inflation. In the MMT view governments cannot become insolvent but they can cause inflation by "giving away" money. -- Derek Ross | Talk 02:02, 17 April 2024 (UTC)[reply]