Begun, the MMT Wars Have

Economists fight, often and viciously, like it’s not just their job but their true calling, and sometimes you can ignore them by simply muting Economics Twitter. But other times you have to pay attention, such as with that whole Mint the Coin thing. The latest fight is even more significant.

It’s over Modern Monetary Theory, the idea that as long as inflation is low and you can print your own currency, government budget deficits really don’t matter (I look forward to your angry emails!). Household names are getting involved; today, BlackRock CEO Larry Fink called MMT “garbage,” while former Pimco guru Paul McCulley called it intriguing. Bloomberg Opinion’s own Stephanie Kelton, an MMT proponent, has been fighting about it with Nobel Prize winner Paul Krugman (not an MMT fan), installments of which you can read here, here and here. Fresh off this battle, she today begins a series of columns using MMT to debunk widely held myths about federal budget deficits. In the first, she argues a deficit is not a sign of “overspending.”