So what do we really have here? In effect, this is The Economist saying MMT works, and the processes it describes should, it says, be used to prevent mass joblessness linked to deflation, which it sees as the new risk (with which I agree).
I don’t care about the Phillips Curve. I do care about real people. And I do care that there should be people-centred economic policy making, in which context it is good that The Economist is proposing this.
It’s just a shame that they could not say they were describing a job guarantee through a national investment bank and the processes are described by modern monetary theory. That would have really been useful to the educational goal of the article, but somehow it still seems to be the case that to utter the three letters ‘MMT’ with a positive connotation attached is to ask too much. But that will change.
Actually, what they’re saying is that monetisation of fiscal policy can work in avoiding deflation. Something which even Milton Friedman would agree with – he did indeed talk of helicopter money.
OK, cool. And the point of calling it monetisation of fiscal policy, not MMT, is that the first phrase also comes freighted with all the examples of where it has gone wrong – Weimar, Venezuela, Argentina several times, Zimbabwe – which is indeed rather useful when we’ve the loons declaring MMT to be the bees knees with no downsides at all.