Talk:Modern monetary theory

Mischaracterization of government debt

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)

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)

MMT vs "mainstream economics"

Before an edit today, I noticed much of this page vacillates between saying MMT is very heterodox to saying it is only 1 argument away from "mainstream" theory. Then the article goes onto try to differentiate it from "mainstream theory" in at least 5 different ways. I think some consistency on this would be good or at least a notice of conflicting attitudes in the lede Civil9095 (talk) 14:17, 4 September 2024 (UTC)

Additionally, the recent presence of MMT economists in the Senate Budget committee and in major presidential campaigns in the Democratic Party makes me question if this is still qualifies as heterodox in politics, and if the "mainstream" people are watching and playing catch-up when they feel necessary. MMT is heterodox in academic circles, but that isn't all of economics. In short, this nuance does not lend itself to black and white thinking, especially conflicting black and white thinking throughout the page without a nuance qualifier in the lede. Civil9095 (talk) 14:28, 4 September 2024 (UTC)

Wikipedia follows the best available sources, this sometimes leads to minor inconsistencies between articles or even within articles. That also means that the "mainstream" is set by the relevant experts in a field, not by politicians or other sorts of popular media. Most newspapers print horoscopes, but astrology is still not mainstream science. MrOllie (talk) 14:37, 4 September 2024 (UTC)

The page has an entire section where it lists 5 areas of disagreement https://wiki.riteme.site/wiki/Modern_monetary_theory#Comparison_of_MMT_with_mainstream_Keynesian_economics. The sentence you were re-adding was saying there is only one area of disagreement. This is not minor. It just creates confusion. If re-added how can we qualify? Civil9095 (talk) 14:42, 4 September 2024 (UTC)

You're comparing apples and oranges. The 'Comparison of MMT with mainstream Keynesian economics' section is not limited the specific principles enumerated in the 'Principles' section. I don't see the conflict. MrOllie (talk) 14:45, 4 September 2024 (UTC)

The section lists 5 areas of disagreement that go beyond interest rates. The sentence you are re-adding without qualification for reasons you have still not articulated says there is only one and about interest rates. That has nothing to do with apples and oranges analogy Civil9095 (talk) 14:47, 4 September 2024 (UTC)

You are misreading the sentence you are attempting to remove, which is about disagreement with the specific list of principles in that section. It is not addressing the same topic as the other section you highlight. MrOllie (talk) 14:49, 4 September 2024 (UTC)

The idea of there being 6 first or main tenants which constitute that section is not sourced in that sentence. It is an assertion with sources that support each 6 being important but not the first or only 6 tenetsCivil9095 (talk) 14:51, 4 September 2024 (UTC)

I've opened a report about this at the edit warring noticeboard. MrOllie (talk) 14:53, 4 September 2024 (UTC)

Additionally, none of the sources say those are the only or even the main tenets so wtf?? Civil9095 (talk) 14:51, 4 September 2024 (UTC)

I logged out for a week and noticed I was blocked rather than responded to here. Please address the following if it is important to establish a "6 main tenets of MMT". Which source shows that there are 4 or 6 main tenets of MMT and that those are the specific ones? Additionally, which source shows that MMT's interest rate is the only theory that diverges from "mainstream theory" referencing those alleged *main tenets in particular*?. This is used to further claim that "x is the only main tenent out of 4 of the 6 main tenents "diverging from mainstream theory", thereby making a claim about how mainstream or not the theory is. I looked through all sources in that section and none establish 6 core tenets of MMT. This is at most WP:SYNTH essaying, but still not enough in the sources to establish a synth of there being "6 main tenets" from which to draw further conclusions. If a source claims that interest rates theory in MMT is one of the only or primary way to differentiate from mainstream theory, given we also have sentences and sources which conflict with this, there should be an addition that notes that. But we would also first need what source says any of this as I cannot find it in the sourced articles. Civil9095 (talk) 14:16, 10 September 2024 (UTC)

I found a source in the lede saying Paul Krugman differs from MMT on interest rates. He is undeniably mainstream so fleshed it out in the lede. Additionallly, prior to coming here, Gregory Mankiw was used as one of a few sources to claim MMT is not mainstream. I have no clue of Mankiw is mainstream but his primary objection was about solvency without consideration of interest rates. There is also the point about how "many mainstream economists" have explicitly stated they do not understand MMT as well as a separate secondary source in the lede already stating that. Civil9095 (talk) 16:07, 10 September 2024 (UTC)

Source verification, sentence in lede

This sentence in the Wikipedia lede asked for source verification. It was the 2nd or third sentence. I am verifying it for accuracy and notability.

MMT also argues that inflation can be controlled by increasing taxes on everyone, to reduce the spending capacity of the [[Sectoral balances|private sector]].<ref name="Wray2015">{{cite book | last= Wray | first=L. Randall | title=Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems | publisher= Palgrave Macmillan | location=Houndmills, Basingstoke, Hampshire New York, NY | year=2015 | isbn=978-1-137-53990-8 | pages=137–41, 199–206}}</ref><ref name="MMT_Beginners_Guide">{{cite news |url=https://www.bloomberg.com/news/features/2019-03-21/modern-monetary-theory-beginner-s-guide |work=Bloomberg Businessweek|last1= Coy|first1=Peter |last2=Dmitrieva|first2=Katia |last3=Boesler |first3= Matthew|title=Warren Buffett Hates It. AOC Is for It. A Beginner's Guide to Modern Monetary Theory|date=21 March 2019}}</ref>{{Verification needed|date=July 2024}} -- Wikipedia lede

Here is the relevant portion in the cited Bloomberg article

The reason the government doesn’t need to sell treasury securities, or levy taxes, to spend money is that the central bank, under the control of the treasury, can pay for everything by conjuring up electronic money. In MMT’s ideal world there would still be taxes, but their main purpose, aside from lessening inequality, would be as “offsets” to keep inflation under control. Taxes would drain just enough money from consumers and businesses so total spending in the economy won’t be excessive.

https://archive.is/NCUwn#selection-5796.0-5796.1

This does not establish "raising taxes on everyone" Civil9095 (talk) 13:41, 10 September 2024 (UTC)

Source verification on last citation in there

From Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems p 137

What, you mean government does not need tax revenue in order to

spend? Precisely, Sherlock. Is that an outrageous statement? For anyone who has lived in the USA since its inception, it should be obvious. Except for seven brief periods, our government has always spent more than it received in taxes. And that would mean what? That the revenues were not needed for the spending. Now, since we’ve established that government can spend without revenue, what is the danger of spending more than revenues? The first that comes to mind is the potential for inflation – if the economy is driven beyond full capacity. Indeed, inflation can be fueled even before full employment if government spending is directed toward sectors with little capacity to expand output. Hence, one response to such dangers could be to raise taxes. Another could be to cut spending. There are other responses that we won’t go into here – wage and price controls, rationing, importing, targeting spending to sectors with excess capacity, and encouraging more production would all help to attenuate inflation

pressures. In Chapters 7 and 8, we will deal with specific MMT proposals

This is the only part of those pages dealing with the sentence. It lists taxes, cutting spending, wage controls, price controls, ationing, importing, targeting spending to sectors with excess capacity, and encouraging more production to attenuate inflation. Singling out taxes as the primary method to control inflation is not stated. Therefore, the sentence warrants deletion or addition to another section in the page in an altered, more accurate way. I have already removed "increase taxes on everyone", the on everyone part, as neither source supports that. Civil9095 (talk) 13:56, 10 September 2024 (UTC)