I made a post about Modern Monetary Theory just then about how Reserve Banks can print money to finance Government spending.
The theory suggests government spending can grow the economy to its full capacity, enrich the private sector, eliminate unemployment, and finance major programs such as universal healthcare, free college tuition, and green energy.
If the spending generates a government deficit, this isn’t a problem either. The government’s deficit is by definition the private sector’s surplus.
Increased government spending will not generate inflation as long as there is unused economic capacity or unemployed labour, MMT proposes. It is only when an economy hits physical or natural constraints on its productivity – such as full employment – that inflation happens because that is when supply fails to meet demand, jacking up prices.
MMT proponents argue governments can control inflation by spending less or withdrawing money from the economy through taxes.
