Jan 29, 2019

Tax-And-Spend Progressives Put Faith in Flawed Policy Theory

Scott Sumner Ralph G. Hawtrey Chair of Monetary Policy

A relatively new school of thought called “Modern Monetary Theory” (MMT), which holds that governments that issue their own currencies do not have to worry about financial constraints on spending, has gained adherents among American progressives.

Newly elected Rep. Alexandra Ocasio-Cortez (D-N.Y.) has cited MMT in support of her claim that the U.S. government can afford a single-payer health care system.

Many mainstream economists are sympathetic to a few of the claims made by MMT proponents, but only under very limited circumstances. Even that assessment may be too generous, as the entire theory is deeply flawed...

Continue reading: Tax-And-Spend Progressives Put Faith in Flawed Policy Theory

Photo credit: Rob Kim/Getty Images

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