A Beginner’s Guide to MMT

The government needs money only to buy the goods and services of the private sector in the service of the public interest. There is no other utility for money in the modern state.

The government no longer needs to keep stocks of gold, the government can create "digital gold" as needed.

Recall why the government needs to print money: because money is an abstraction, a fungible token that represents a constant fraction of the total real wealth in the the entire economic system. If we keep producing more goods and services, but don't produce more money, we enter deflation. To avoid deflation, the government needs only to ensure that the amount of money in circulation increases in line with any increase in economic output. As long as this is managed proficiently, the economic system will be stable.

The government increases the amount of money in circulation by purchasing goods and services from the public. To this end, the government can offer citizens money in exchange for labour that serves the public interest and fulfill both its economic and pro-social obligation.

What's the point of the government creating these abstract value tokens, giving them to us, and then demanding them back? And furthermore, why does the government need to borrow arbitrary amounts of similar tokens from other governments?

It doesn't. Our current system is a relic from the days of governments using a limited, fungible, physical resource (gold) which didn't linearly scale with economic growth.

The government no longer needs to borrow tokens, it needs only to create more of them, and should only occasionally need to remove tokens from circulation (taxation) as a way to account compel pro-social behaviour -- e.g. carbon emission taxes.

Today's inflation manifests itself, not in consumer price increases, but in asset bubbles. Asset bubbles always pop, usually uncontrollably.

The last major asset bubble nearly took out the US economy with it. The next one may finish the job.

Debt matters because the only politically palatable cure for the aftermath of a debt-fueled bubble is more debt. And more bubbles.

MMT is, AFAICT, pretty soldily grounded recitations of facts about fiat money that are widely recognized.

It's been embraced by advocates of monetizing fiscal affairs because, well, it says that there is virtually unlimited short-term capacity to do that in a fiat-money system. But it's exactly that temptation in a fiat money system that motivated the strong separation we currently have between fiscal and monetary policy, which includes the whole structure of government financing operation g as if it were more like a normal participant in the economy.

OTOH, the entity charged with fiscal policy in the US has either been actively hostile to real needs or asleep at the switch for most of the last couple decades, and monetary policy alone, as currently structured, directs money initially into what is often the wrong place, though fiscal policy can help move it to the right place. The problem with the MMT driven “solution” is it involves concentrating both fiscal and monetary policy in the hands of Congress, and if Congress wasn't being completely worthless we wouldn't have the problem people are turning to MMT to fix.

If Congress were doing good work with fiscal policy but the Fed was screwing it up with poorly chosen or simply negligent monetary policy, then there would be a problem that the way MMT is being invoked would present a solution to.