Hacker News Reader

Comment by holymacaral | Hacker News Reader

A lot of MMT is just restating things Keynesians and Austrians already know and pretending it's some brilliant idea. For instance, they think it's a big breakthrough that the government can pay down debt by issuing more currency. We already know the government can do this, and we also know why it's a bad idea.

View on HN

> we also know why it's a bad idea

Do tell.

Countries can and have defaulted on debts issued in their own currencies. If you printed your way out of debt that would be a default in all but name. You would cause a collapse of credit and a collapse in confidence in the currency itself.

> Countries can and have defaulted on debts issued in their own currencies.

Really? How?

> If you printed your way out of debt that would be a default in all but name.

Oh, right, actually they don't. So in fact it is actually impossible to default on debt in your own currency and you're admitting as much.

> You would cause a collapse of credit and a collapse in confidence in the currency itself.

Right. And a reduction of value of a currency is also called inflation. Which is pretty well accounted for within the discussion.

https://scholar.harvard.edu/files/rogoff/files/forgotten_his...

Sorry, posted the wrong Reinhart paper, should be this one of course: https://www.nber.org/papers/w15815.pdf

I quickly read, digested, and mentally analyzed the 52 page whitepaper you posted, and am ready to resume the argument from the exact same point of view.

This paper was discredited. It could not be replicated using publicly available data and it was eventually found that there were large scale computational errors: https://www.bbc.com/news/magazine-22223190

MMT supporters would agree with that statement, AFAICT. Some claim that their theories are more clearly descended from Keynes than conventional economics do.

"why it's a bad idea"

aka, inflation. Which MMT spends a lot of effort modelling.

> Some claim that their theories are more clearly descended from Keynes than conventional economics do.

The conventionals recognize this too:

> With everything else going on, I really don’t want to spend time arguing with the Modern Monetary Theory people; after all, we agree on basic policy issues right now, and they are never likely to have as much destructive influence as the deficit scolds. But the MMT people think they have an argument with conventional Keynesians like me, and as long as they’re out there claiming that standard macroeconomics is all wrong, I guess we need to respond.

* https://www.nytimes.com/2019/02/25/opinion/running-on-mmt-wo...

Reply on news.ycombinator.com