Modern Monetary Theory (MMT) has been around since the ’90s but hasn’t gotten the attention of any outside of academia until Dr. Stephanie Kelton served as a consultant to the Senate Budget Committee for the minority and got the attention of many on Wall St and Sen. Bernie Sanders. Since then she has become the public face of the theory, consulting for many financial sector businesses and governments around the world. She is the current economic advisor to the Senator in his campaign and holds a board position for his foundation.

The theory, however, is the work of a conservative bond trader in collaboration with such names as Rumsfeld and Laffer. His name is Warren Mosler and he has refined his original research and published a couple of books on the origins of money and the process of its creation by governments.(7 Deadly Innocent Frauds .pdf and Soft Currency Economics .pdf )

Dr. (Bell) Kelton was at the time an orthodox Keynesian economist and challenged Warren’s assumptions, specifically that taxes don’t fund federal spending, and spent the better part of a year attempting to disprove it with a deep dive into Treasury and Fed processes. Her efforts were unsuccessful but did provide the discipline with much-needed validation in a paper she presented, ( Can Taxes and Bonds Finance Spending .pdf ) In the course of her research she also found a paper written by Beardsley Ruml, a former chairman of the Federal Reserve Bank in St Louis back in ’45 that offered the same wisdom. ( Taxes for Revenue Are Obsolete )

One of the hindrances to learning is our natural tendency to interject what we “think” we know into the process. I know that was my issue, and several others I know have voiced the same. It is difficult to abandon a lifetime of experience as a “user” of the currency and not apply that to the monopoly “issuer” of the currency by default. Once one is able to start fresh and just absorb the information presented MMT seems to come to most people as an “aha” moment of clarity.