Some ideas seem too good to be true. Like this one. It comes from a 13-year-old listener named Amy. She says she knows the government has trouble finding enough money to pay for stuff like schools and hospitals. And she wondered if it has considered just printing more money. She asked us: Can the government do that? Just make more money to pay for stuff?
Fiscal hawks say, 'no way!' We'd have crazy inflation! But there's a group of economists that says, 'yes, we can create way more money, without disaster. And pay for lots of stuff we want.' They are the proponents of what's called Modern Monetary Theory, or MMT. Their ideas are getting out there, they have the memes to prove it.
Today, we try to understand a school of thought that is flipping economic theory on its head. If you buy it, the whole idea of government spending, taxes, the nature of money changes, and, according to the theory, all we have to do is just open our eyes. It's a bit like staring at those optical illusions: First you see the faces, then, suddenly it's the goblet.
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