Today’s Flash Back Friday comes from Episode 354, originally published in October 2017.
Jason Hartman welcomes Economist Mike Norman to the show to discuss Modern Monetary Theory or MMT. Mike shares examples of common misconceptions people have of the US monetary system and economy, such as the US debt clock, that inflation equals growth, and how the tax system works. He believes that the US has an unlimited supply of capital and balancing the budget or functioning as a fixed monetary system would accomplish the opposite of what is needed to create growth.
[1:40] Modern Monetary Theory (MMT) explains the value of money.
[4:39] A tax system is required to create demand for money.
[9:31] A fixed monetary system creates cycles of economic depressions and recessions.
[11:53] The US national debt is a summation of what is owned by the US and its constituents.
[19:25] A dollar must be created and pumped into the economy before it can be used to pay a tax debt.
[21:46] The US has an unlimited amount of new capital.
[27:13] There is a difference between inflation and growth.