MMT Has Been Around for Decades. Here’s Why It Just Caught Fire

... economists have been losing confidence in ideas that 25 years ago seemed obvious. And with a generation having passed since inflation looked like a serious problem, the case for fighting it as public enemy number one has weakened too. That’s opened the door for frameworks geared more toward addressing 21st-century concerns such as rising inequality -- more extreme in the U.S. than in any other developed country -- or America’s lack of a universal health-care safety net.
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“I don’t think good growth policies have to obsess, necessarily, about the budget deficit,” Trump’s economic adviser Larry Kudlow said on Sunday. That’s pretty much what MMT would advise -- even if most of its adherents disagree with Trump’s economic goals and would spend the deficits very differently.
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Freshman Representative Alexandria Ocasio-Cortez of New York, who also worked on the Sanders campaign, ... said MMT should be “a larger part of our conversation” and urged Congress to use deploy its “power of the purse.” Ocasio-Cortez has millions of followers on social media, where economic and political ideas are spread.
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Japan isn’t growing quickly, but its image among Western economists as some kind of basket-case has been undergoing a rethink. Serial deficits haven’t triggered inflation or a flight from bond markets. And real incomes have kept pace with America’s (and exceeded Europe’s) since 2008.
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At the same time, it’s become more common to see ... high-profile liberal economists coming out in favor of deficit-spending, and dismissing concerns about the national debt as overblown. Summers, Krugman and Blanchard have all made that case in recent weeks -- even while arguing that MMT gets the mechanics wrong. [Source]