vand wrote:NeilW wrote:
How is it a concern?
....
What crap.
Ultimately no entity can afford to keep living beyond its means (ie issuing ever increasing amounts of debt) indefinitely. Just because you have a printing press doesn't change the laws of production and consumption.
Seriously, just stop with the magic money tree idea. It's total nonsense.
It's actually known as the "Modern Monetary Theory". However most do use your turn of phrase.
More on financial repression, rather than MMT from Reuters.
https://www.reuters.com/breakingviews/c ... 021-09-02/
This is no free lunch, however. Financial repression acts as a closet wealth tax. Government creditors are the biggest losers. In 1946, a bear market in U.S. Treasuries commenced that lasted for 35 years. In the post-war decade, UK gilts lost around 40% of their purchasing power. Furthermore, as Napier points out, when credit is no longer allocated according to its market price, then governments must assume a greater role. In post-war France, most bank lending came under the state’s purview. In Britain, firms seeking to raise money in the City of London required approval from a Capital Issues Committee.
To paraphrase John Maynard Keynes, when the capital development of a country becomes a by-product of the political process, the job is likely to be ill done. By encouraging inflation and retarding economic growth, financial repression ends in stagflation – a term coined by the Tory politician Iain Macleod in the 1960s.
And here (showing that I'm young enough at heart to look things up) is a bit about MMT and examples of the downsides.
https://www.businessinsider.com/persona ... ?r=US&IR=T