In the first instance MMT says all money is created by either government central banks or other banks acting under state licence.
Second it says that money only has value because the government promises to back it.
Third, it suggests that this backing is evidenced: the requirement that tax be paid in government created money guarantees state created currency a value in exchange, most especially if there is no other currency in circulation in an economy.
And fourth, this necessarily means government spending must come before tax is raised in our macroeconomy or there would be no money created to settle the tax bill. This cannot be issued as semantics: it is fundamental to understanding the role and nature of deficits.
Central banks and or commercial banks create money.
Therefore government spending must come before taxation otherwise there would be no money to collect the taxes in.
Which fifthly means government deficits are a necessary and good thing because without them the means to make settlement would not exist in our economy.
But if it’s the banks, central and commercial, which create the money then it would be the absence of banks which would lead to the absence of money.
And sixth, and most important of all, knowing this liberates us to think entirely afresh about fiscal policy, which Portes rightly says is prioritised by MMT over monetary policy, which I would happen to argue is now largely redundant anyway because in a world of low interest rates monetary policy is wholly ineffective, and I believe low interest rates are here to stay.
Low interest rates are a monetary policy.