en English

Should Governments Just Print More Money?

Podcasts Sep 10, 2019 Stephanie Kelton and Elmira Bayrasli

Supporters of Modern Monetary Theory say that some governments can easily cover the cost of large social programs such as health care for all and free college tuition by jettisoning conventional thinking about the role of debt and taxes in our economies. But is it really that simple?

Listen and subscribe to all episodes from your favorite podcast app. Find Opinion Has It on Apple Podcasts, Google Podcasts, Acast, or via RSS Feed. Have a suggestion for an episode? Email us at podcasts@project-syndicate.org.

BLACK FRIDAY SALE: Subscribe for as little as $34.99

Subscribe now to gain access to insights and analyses from the world’s leading thinkers – starting at just $34.99 for your first year.

Subscribe Now

Featured

The Democrats Committed Suicide This Year

The Democrats Committed Suicide This Year

Nov 13, 2024 James K. Galbraith
The BRICS Currency Charade

The BRICS Currency Charade

Nov 14, 2024 Barry Eichengreen
What Donald Trump’s Return Means for the World

What Donald Trump’s Return Means for the World

Nov 12, 2024 Ian Bremmer
America Must Stand Up to Asia's Bully

America Must Stand Up to Asia's Bully

Nov 13, 2024 Brahma Chellaney
Once Again, It Was the Economy, Stupid

Once Again, It Was the Economy, Stupid

Nov 14, 2024 Mohamed A. El-Erian

Stephanie Kelton

Stephanie Kelton is a professor of economics and public policy at Stony Brook University. She is a leading expert on Modern Monetary Theory and a former Chief Economist on the US Senate Budget Committee (Democratic staff).

Elmira Bayrasli

Writing for PS since 2016
3 Commentaries

Elmira Bayrasli is the co-founder and CEO of Foreign Policy Interrupted and the author of From The Other Side of The World: Extraordinary Entrepreneurs, Unlikely Places.

new comment has been posted. new comments have been posted.

0 Comments on this paragraph, 2 Comments on this article

Paul Daley Sep 12, 2019

Modern monetary theory could be an improvement over what we have today, where central bank purchases of government bonds in secondary markets does little more than inflate asset prices. Under MMT, new issues of government bonds, even to their own central banks, would at least support the production of new goods and services so long as there was slack in the economy. But can governments be relied upon to act in a timely fashion in response to both economic slack and rising inflation in goods and service markets? Recent history isn't encouraging.

That is why it makes more sense to open channels through which central banks can use QE programs to directly support goods and service purchases during times of economic slack. Central banks are more nimble than democratic governments, but they have never been given the latitude or the means to provide incremental income support or product demand in the absence of expanding fiscal deficits. That is what needs to change. So long as central banks are obliged to wait on prior government action before providing support to goods and service markets, but are allowed to act in asset markets immediately, they are going to take the latter course, inflating asset prices and waiting on wealth effects to produce some meager increase in goods and services demand.

In short, we don't need a new theory to deal with current problems. We need new practices at our central banks. Those central banks have to act more like real banks, lending against income while trading in assets. Only at that point will central banks be in a position to support a balanced expansion that ties asset prices to income flows.
A new reply to this comment has been posted.

https://prosyn.org/vKPYtih

Handpicked to read next

Modern Monetary Realism

galbraith2_Mark WilsonGetty Images_dollar

Email required

Password required Remember me?

Should Governments Just Print More Money?

BLACK FRIDAY SALE: Subscribe for as little as $34.99

Featured

The Democrats Committed Suicide This Year

The BRICS Currency Charade

What Donald Trump’s Return Means for the World

America Must Stand Up to Asia's Bully

Once Again, It Was the Economy, Stupid

New Comment

Email this piece to a friend

Contact us

Handpicked to read next

Modern Monetary Realism

Log in/Register

Should Governments Just Print More Money?

BLACK FRIDAY SALE: Subscribe for as little as $34.99

Featured

Handpicked to read next

Edit Newsletter Preferences

Set up Notification