Dr. Krugman has once again tried to drive a stake into the MMT argument. Unfortunately, he is still entirely misinterpreting MMT. In a piece this morning he claimed that MMTers say deficits don’t matter:
“Regular readers of comments will notice a continual stream of criticism from MMT (modern monetary theory) types, who insist that deficits are never a problem as long as you have your own currency.
…But since the MMTers seem to have decided to harass those of us who want stronger action now but think there really is a long-run fiscal issue, I needed to put this out there.”
The reason Dr. Krugman is being “harassed” is because he does not understand federal finances and refuses to take the time to understand the MMT argument. After all, if he did understand MMT he would never say things as silly as “deficits don’t matter”. I am not going to repeat all of the arguments I made last time Dr. Krugman did this, but I will repeat one comment – Dr. Krugman is far too smart to be criticizing something that he hasn’t taken the time to fully understand.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.