The most difficult thing about understanding MMT is unlearning the many things we “think” we know about economics. Depending upon one’s assumptions of their own expertise this can be ego-shattering, and nothing is more self-protective than the human ego. This is why so many elites in economic circles fight it tooth and nail and relative econ neophytes have their “aha” moment from watching a couple of videos made by Dr. Stephanie Kelton.

It’s too easy to discount the opinion of the neophyte as uninformed, but is uninformed not preferable to misinformed when so much jargon and formula substantiating orthodox economics amounts to nothing more than adjusting results to comply with theory, ie: taxes “fund” spending and bonds are “borrowing” when neither is true? This is especially true when most prominent orthodox economists owe their living to the largest benefactors of orthodoxy that have the most to lose from MMT adoption, the banking industry, and politicians.

Printing money doesn’t mean free money, of course; it just dilutes the value of everybody else’s dollars.

This is a holdover assumption from the gold standard that has persistently remained, even among economists. Until every resource and worker is deployed in the economy the last dollar spent has the same value as the first. The quantity of money no longer relates to its value, as markets will always increase production to capture demand until maxed out before raising prices. This can be affected by patents, monopolies, resource shortages, supply chain hiccups, etc, but those are not factors in “monetary” inflation/currency devaluation. This is why MMTers will often state that we can always “afford” anything that is for sale in dollars without incurring inflation.

However, the MMT understanding of politics is flawed. While governments have the will to print more money to solve demand problems, they don’t have the will to print less money to solve the inflation problem.

The one policy prescription (officially) advocated by MMT is the federally funded job guarantee. By giving an option of a job that pays a livable wage with benefits to workers at their discretion the economy becomes almost completely self-correcting with no political intervention necessary. The injection of public money to maintain supply chains and protect private sector debt will always be countercyclical to the business cycle and remove the need for destabilizing monetary policy to control inflation.

In fact, many MMT economists call for a zero rate permanent policy for Treasury issues or simply eliminating them. Using monetary policy to brake the economy without sufficiently providing for the unemployed is institutionalized cruelty, especially for anyone who is a member of any demographic that is first fired and last hired. The job guarantee, administered locally, would also allow spending on quality of life issues and provide a better sense of community as people can see a real return for the money spent.

So the risk is even closer than it looks; under an MMT framework, if the supply of healthcare remains limited, we’d end up with high inflation for medical spending but low inflation everywhere else.

With a fiat currency, the logic supporting a single payer payment system is undeniable and would happen almost as a natural consequence of the job guarantee benefits. I would want the job guarantee to be the method of introducing/deploying single payer so that it would be available to employ or retrain the many insurance sector workers that would be unemployed. Sadly, the current Democratic political field is universally thinking in terms of tax increases to “pay for” single payer when the correct approach may require a tax “cut” to stimulate the needed employment.

Raising taxes while purposefully making a large number of workers unemployed is not a recipe for success, even considering the stimulus effect of workers gaining the buying power of present premiums and copays. Bernie understands this, as his longtime econ advisor is Dr. Kelton, one of the primary MMT advocates in academic circles. I’m pretty sure his tax proposals are aimed at the obvious need to reduce income inequality more than at paying for programs, but hardcore MMTers would prefer he be more honest about it.