HARRY 3 on Nostr: #sound money #Bitcoin #MMT Why are MMT proponents not called out on this huge flaw in ...

#sound money #Bitcoin #MMT

Why are MMT proponents not called out on this huge flaw in their Theory.
By stating money creation is a tool to be used by intelligent Governments is an insult to human history.

“The link between Modern Monetary Theory (MMT) and “forever wars” lies in how MMT argues that a government with sovereign currency (like the U.S.) can finance wars indefinitely without worrying about budget deficits in the traditional sense. This has significant implications for prolonged military engagements.

1. MMT: Unlimited Government Spending?

MMT suggests that a country like the U.S., which prints its own currency, does not need to “find” money (via taxes or borrowing) to fund spending. Instead, it can create money as needed, constrained only by inflation.

2. How This Enables Forever Wars
• Wars Are Expensive: Traditional thinking says long wars are unsustainable due to debt. MMT dismisses this concern, arguing the government can always fund military spending.
• No Need for Tax Hikes or War Bonds: Historically, wars were financed through higher taxes or war bonds. With MMT, these are unnecessary, making war politically easier to sustain.
• Reduced Political Resistance: If the public doesn’t “feel” the cost through taxes or visible debt burdens, opposition to prolonged wars weakens.
• Defense Contractors & Military-Industrial Complex: A government that can “print” money indefinitely can keep funding defense companies and military projects without limits.

3. The Inflation Risk

MMT acknowledges that excessive spending can cause inflation, which is the real constraint. However, wartime spending historically fuels inflation (e.g., Vietnam War, Iraq War). If inflation rises, MMT suggests the government could counter it by:
• Raising taxes to pull money out of circulation (politically unpopular).
• Cutting other spending (unlikely due to lobbying and entitlements).
• Relying on the dollar’s global status to export inflation elsewhere.

4. Historical Examples
• Vietnam War: The U.S. printed money instead of raising taxes, contributing to 1970s stagflation.
• Post-9/11 Wars (Iraq, Afghanistan, Syria, etc.): Financed through deficit spending, with little immediate economic pain at home.
• Ukraine & Potential Future Conflicts: MMT thinking suggests the U.S. can keep funding military aid indefinitely as long as inflation is managed.

Conclusion

MMT makes it easier for governments to justify prolonged military interventions without traditional financial constraints. While it doesn’t advocate for war, its framework removes the economic pressure that historically forced nations to end wars when they became too costly.”