MMT argues that a sovereign government that issues its own “nonconvertible” currency cannot become insolvent in terms of its own currency. It cannot be forced into involuntary default on its obligations denominated in its own currency.
In recent weeks the Job Guarantee proposal has gained supporters, and the arguments for an increased government role in ensuring full employment have become stronger. (See here, here, and here.)
The following is a proposition by Scott Sumner (professor of economics at Bentley University) that the QE programs by the U.S. Federal Reserve and other central bank actions have actually been “highly contractionary” and a rebuttal by L. Randall Wray (professor of economics at the University of Missouri Kansas City).
by L. Randall Wray, New Economic Perspectives Editor’s note: This is a continuation of the discussion posted earlier, The Great Debate©: Who Saw It Coming? A focal point of that discussion was Hyman Minsky who formulated theories about instability in economic systems. This essay adds to the debate and comes from one who studied for …
Michael Tanner is a Cato Institute Senior Fellow and L. Randall Wray is Professor of Economics, University of Missouri, Kansas City. The two discussed opposing views on how to deal with the U.S. federal deficit in a radio interview conducted by Ross Reynolds at KUOW, Seattle.