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MMT is far from being a theory, it is a battle tested alternative to debt and austerity based economics
I thought that this post by Malcolm Reavell on the facebook page of Modern Money Scotland (which I support) was well worth sharing. This story is straightforward, and apposite:
An excellent story that explains a real example of state money creation and the banking world's reaction to it.
In the US Civil War Abraham Lincoln was running out of money to pay the troops. He went to the Rothschilds and other bankers who would happily lend him the money at an interest rate of 24% to 34% which was going to put the Union side in debt to the banks forever. Abe was smart and issued the Greenback instead, a dollar created by the government for the interest free use of the population.
In his own words: "The government should create issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power." (Senate document 23, Page 91. 1865)
How did the banks react?
The Rothschilds were outraged. From the Times of London in 1865:
"If that mischievous financial policy, which had its origin in the North American Republic, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedence in the history of the civilised governments of the world. The brains and the wealth of all countries will go to North America. That government must be destroyed, or it will destroy every monarchy on the globe."
So there we have it. MMT is the democratic solution to funding our civilisation, but it is hated by the banks, monarchs, authoritarians and all those who want to use debt as a tool to maintain their dominance at your expense.
MMT is far from being a theory, it is a battle tested (literally) alternative to debt and austerity based economies.
Courtesy of: https://twitter.com/picss3o/status/1383387933764308999?s=21
Source: https://www.ukcolumn.org/article/case-greenback-pound
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