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(Created for public consumption. Could it be useful to educate the public about MMT?)
THREE HARMFUL MYTHS OUR LEADERS WANT US TO BELIEVE
(This is just a small example of false stories about money, repeated frequently in the press, that most of us hold to be true.)
REALITY: Most governments create their national currencies. They can never run out of money precisely because they have the power and privilege to create money when it is needed.
COUNTERFACTUAL STORY: Governments need to borrow their own money if there is not enough in the kitty, even though they can create it (and do so every day).
REALITY: The governments do not need to save for a rainy day and build up a kitty (fiscal surplus), because they can always create the money they need. (A sovereign wealth fund is not needed.)
COUNTERFACTUAL STORY: The government needs to save to have money to spend when the economy slows and its tax collection (the amount in the kitty) may not be enough to cover what it needs.
REALITY: Each unit of currency (dollar, pound, yen, etc.) is a claim on resources available for sale in the economy. Provided there are enough of these resources such energy, materials, goods and services available for every unit money governments crates, NO INFLATION WILL ARISE.
COUNTERFACTUAL STORY: The ‘hyperinflation’ Zimbabwe experienced will promptly cripple the country if the government spends more than the tax collection it has in its kitty.
Basic logic indicates which of the stories are true. No additional explanation is needed. Unfortunately the consequences of these myths are harmful to society and the economy.
https://www.facebook.com/groups/DiscussModernMoney/permalink/762817347555958/
THREE HARMFUL MYTHS OUR LEADERS WANT US TO BELIEVE
(This is just a small example of false stories about money, repeated frequently in the press, that most of us hold to be true.)
REALITY: Most governments create their national currencies. They can never run out of money precisely because they have the power and privilege to create money when it is needed.
COUNTERFACTUAL STORY: Governments need to borrow their own money if there is not enough in the kitty, even though they can create it (and do so every day).
REALITY: The governments do not need to save for a rainy day and build up a kitty (fiscal surplus), because they can always create the money they need. (A sovereign wealth fund is not needed.)
COUNTERFACTUAL STORY: The government needs to save to have money to spend when the economy slows and its tax collection (the amount in the kitty) may not be enough to cover what it needs.
REALITY: Each unit of currency (dollar, pound, yen, etc.) is a claim on resources available for sale in the economy. Provided there are enough of these resources such energy, materials, goods and services available for every unit money governments crates, NO INFLATION WILL ARISE.
COUNTERFACTUAL STORY: The ‘hyperinflation’ Zimbabwe experienced will promptly cripple the country if the government spends more than the tax collection it has in its kitty.
Basic logic indicates which of the stories are true. No additional explanation is needed. Unfortunately the consequences of these myths are harmful to society and the economy.
https://www.facebook.com/groups/DiscussModernMoney/permalink/762817347555958/
