MMT

We often hear the word counter-intuitive when we face something that our common sense says is crazy. One situation today that meet this craziness is Modern Monetary Theory (MMT). This says that in a government that prints its own currency there is no limit to how much it can spend. If we want free any thing we just have the government print up the money to pay for it. Say, for example, we want the government to send every working family $5,000 per month. What will that do to the economy. We tend to think in terms of our family budget but that is not the same since we can't print money to pay our bills but the government can. The standard objection is that inflation will raise its ugly head and the whole thing will backfire. Over the past 12 years with quantitative easing and stimulus we have increased the money supply from $8 trillion to $20 trillion and inflation rate has been under 2%. Inflation has been so low the past 30 years that most adults age 50 or younger have never experienced inflation as a negative. This represents 2/3rds of the population. Recently politicians have used this idea without realizing what they were doing. Several have said to increase unemployment as a way of stimulating growth. If unemployment benefits can do that why not just send money to everyone. MMT says that this is a transfer of money from the government to the people and the people use some of the money to pay their taxes. So whats wrong with that. Is there really something called the money tree. Can the government do the next 12 years what it has done the past 12 years and if not, why not.