The Modern Money Theory Free Lunch Mirage Can Produce Perverse Outcomes

A big appeal of Modern Money Theory (MMT) to some progressive politicians and activists (and to wealthy financiers as well) is that it appears to say: “We don’t have to pay for government spending.” In response to claims from the austerity hawks that we cannot “afford” progressive proposals such as the Green New Deal, the MMT answer is: by definition, we can always afford them because all we have to do is get the Fed to print dollars to pay for them. How liberating and empowering this message is. However, this article by PERI researcher Gerald Epstein argues that this appearance of liberation and power is an illusion. Worse, it is a dangerous illusion.

Challenge

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PERI's Gerald Epstein provides a rebuttal to Modern Money Theory advocates and discusses what happens when the economy reaches full employment.

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