“Anything that is technically feasible is financially affordable.”

Let’s kick this off with Ezra Klein and no, no names will be dropped:

“I would say the economics profession has just been devastatingly wrong about what effect different deficit levels would have over the past twenty years. I think you simply have to look at that, given the credentials of some of the people making these arguments, as—in aggregate—a record of a lot of failure…There were just a lot of warnings that just look completely ridiculous.”

Here is S Kelton who quoted him at the end of “Yes, We Can! But should we tell the masses?

Yesterday, I listened to an interesting podcast conversation between the New York Times’ Ezra Klein and Columbia University’s Adam Tooze. Tooze is an economic historian, whose new book challenges conventional economic thinking in ways that often closely parallel Modern Monetary Theory (MMT).

For the last quarter-century, MMT economists have emphasized that “finding the money” is never the challenge for governments that issue their own non-convertible—i.e. floating exchange rate—fiat currencies. It has long been our position that mainstream macro, which centers the limits of fiscal policy around the (erroneous) concept of a “government budget constraint,” has led us astray.

Instead of treating governments like revenue-constrained households, MMT economists have pushed for a macro framework that replaces the artificial government budget constraint with a real resource (inflation) constraint.

A central tenet of MMT is captured in the recognition that a currency-issuing government can afford to purchase whatever is available and for sale in its own currency. Before COVID, it was harder to persuade people that the government could easily afford to spend trillions without raising a slew of taxes to “pay for” it.

Full post here.