If the current monetary theory believes that the central banks can manage the economy, prevent depression, take care of employment, curb inflation or deflation, and outlaw the cycle of economics, the new theory takes it a step further. According to which the government can do all this, and also take care of the welfare of all residents, from providing extensive free services to comprehensive social justice. Therefore, the government must be given all the powers and powers not only with respect to the management of the economy and society, but also with regard to the management of the money, its production, its price and its movement.
Moreover, government activity should not be limited by marginal matters such as budget or money stock, since these, too, are merely a creation of the law. And since the government can enforce the exclusive use of the money it generates, its resources are not limited. As such, the government must print money, not accompany it, as much as is necessary to create full employment and prosperity in the economy.
Fed Chairman Jerome Powell, and current mainstream economists such as Professor Larry Summers and others, have dismissed the theory as a voodoo economy, but a closer examination shows that all those who reject it are ruled out. , A logical bastion of today’s neo-Keynesian central bank policy.
If the Fed generates $ 4.5 trillion from the air and supposedly accompanies the government to finance its deficits, even though the loan is without interest and without repaying, as we have seen from the Fed’s mid-March statement, what is the difference between this policy and MMT, except the technical details about who prints the money And who has the power to do so, Treasury officials or central bank officials?
Wall Street also joined the supporters