$11 Trillion Debt Wave Shows MMT Doesn't Work

-edited

Proponents of MMT please note: Your proposal is failing in actual practice.

Please consider £11 Trillion Debt Wave as Governments Borrow More Than Ever Before.

Governments need to borrow £11 trillion on financial markets this year, breaking the £10.9 trillion record set in the recession-fighting spending spree at the height of the financial crisis.

Most of this is caused by governments refinancing existing debt mountains as the bonds issued to finance earlier debt-fueled spending mature.

But more than £2 trillion is new borrowing as nations continue to add to their national debts, according to data on rich-world economies from the Organisation for Economic Co-operation and Development (OECD). The US budget deficit hit more than 4% of GDP last year.

Austerity Nonsense

Amidst all this nonsensical talk of austerity, government debt keeps expanding, and expanding, and expanding.

The MMTers will simply come back with claims we need to double debt or triple it, or whatever multiple it takes, effectively embracing AOC's idiotic Green New Deal.

And where foolish thinking prevails, look no further than Chicago where we have yet Another Idiotic "Free Money" Proposal, This One From Chicago Mayor Rahm Emanuel.

In the real world I ask, Tax the Rich! Tax the Rich! How's it Working Out?

MMTers will respond that government debt doesn't matter at all. So, why tax anybody? After all, government always spends money wisely.

Mike "Mish" Shedlock

Comments
No. 1-23
stillCJ
stillCJ

Editor

No problem, just borrow more money to service the existing debt. What could possibly go wrong?

JohnH
JohnH

I have no idea if MMT is a valid or not, but it would be good to have a more complete understanding of what they are promoting. Here is a Stefanie Kelton video worth watching:

Chris P
Chris P

I think if we look at objectively socialism doesn't work for the same reasons capitalism doesn't work. Greed will win out in any system man can make.

Escierto
Escierto

At one time I would have agreed with you, Mish, but not any more. I would have thought that 21 trillion in debt would have broken the US government and the USD. But no, it doesn't matter. So why would 42 trillion matter or 542 trillion matter? We are already in the stratosphere of gigantic numbers and clearly it doesn't matter. Hard money people like myself must accept this reality. MMT does work.

hmk
hmk

The video proves Phd"s are really idiots when it comes to common sense. In theory there is no difference between practice and theory, but in practice there is. Her idiotic theory is that govt can use debt productiviely ie self liquidating like a business would use to make a product to sell. We all know that is a joke when it come to govt. Second she assumes that its okay until inflation occurs. Guess what inflation will never occur because the magicians in the monetary politburo will never publish true inflation stats. If measured by the same parameters prior to the 1998 cha;nge iin the way it was measured, it would show inflation running at over 6%. The reason they changed the way inflation was measured was to keep COLA raises low on entitilements. It also allows the Ivory tower Phd's in the fed to keep intersest rates artificially lower. This keeps govt debt financing costs lower and also enriches the financiers. No wonder no one can affort houses, insurance , college etc etc. This is why people turn to socialism and communism becasue they know something is fubb but cant figure out why. Capitalism works until you have a govt that is coruppted by the capitalist money.