History of MMT

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Introduction

Warren Mosler — The origin of MMT is 'Soft Currency Economics' at www.moslereconomics.com which I wrote after spending an hour in the steam room with Don Rumsfeld at the Racquet Club inChicago who sent me to Art Laffer who assigned Mark McNary to work with me to write it. The story is in 'The 7 Deadly Innocent Frauds of Economic Policy' at http://www.moslereconomics.com/?p=8662/ I had never read or even heard of Lerner, Knapp, Inness, Chartalism, and only knew Keynes by reading his quotes published by others. I 'created' what became know as 'MMT' entirely independently of prior economic thought. It came from my direct experience in actual monetary operations, much of which is also described in the book. The main takeaways are simply that with the $US and our current monetary arrangements, federal taxes function to regulate demand, and federal borrowing functions to support interest rates, with neither functioning to raise revenue per se. In other words, operationally, federal spending is not revenue constrained. All constraints are necessarily self imposed and political. And everyone in Fed operations knows it.

Warren Mosler, comment at Mises.org on The Upside-Down World of MMT ( May 14, 2011)

References

Warren Mosler, Soft Currency Economics (1994)

Pavlina R. Tcherneva, A Critical Review of Soft Currency Economics