Modern Monetary Theory

Modern Monetary Theory (MMT) starts from a simple claim: a country that borrows in a currency it issues itself, like the US with dollars, can never be forced to default the way a household can. It can always create the money to pay. The real limit, MMT says, is inflation: spend more than the economy can produce and prices take off.

Supporters say this frees governments to spend on jobs and public goods. Critics say it badly underestimates how hard inflation is to put back in the bottle once it escapes. It is a live political argument, so treat it as a lens on fiscal policy, not settled fact.