SUNDAY, MAY 20, 2012
J. D. Alt: Playing Monopolis Monopoly: An inquiry into why we are making ourselves so miserable
By J. D. Alt. The post is a a continuation of ideas first developed in Alt’s novel, The Architect Who Couldn’t Sing, available at Amazon.com or iBooks. Originally posted atNew Economic Perspectives.
Searching for an answer, I discovered a small (but growing) group of economists (see here, here, here, here, here, here) who represent an emerging school of thought known as “modern monetary theory” (MMT). These men and women are valiantly trying to make us all understand a paradigm shift that occurred some forty years ago, when the world abandoned the gold standard. Their key insight shocked me: A sovereign government is never revenue constrained when it is the Monopoly issuer of its own pure fiat currency; it has all the money that’s needed to put its citizens to work building anything—and providing any service—that is desired by the public (provided the real resources are available). Even more remarkable, sovereign “deficits” in the fiat currency are just the accounting record of the surpluses that have been injected into the private economy. Eliminating the sovereign currency deficit by imposing austerity will not make the economy healthier; it will, in effect, bankrupt the citizens!
Let’s begin.
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