MMT

Politicians who are opposed to government spending often say that the government doesn't have any money except the money it gets from the people. Modern monetary theory (MMT) says just the opposite. The people don't have any money until the government creates it. The money comes from the government through the banking system and returns to the government by way of taxation. Imagine two buckets, one for government and the other for all else. The government creates $100 and puts it in the government bucket. Then they transfer it to the all else bucket. Then they collect $90 in taxes and the government now has a $10 deficit. However the all else bucket now has a $10 surplus. The people now have the surplus at their disposal. As they spend this it creates economic growth. The larger the deficit the larger the surplus and the larger the economic growth. According to MMT this process can continue until the country reaches full employment. At that point inflation becomes a problem and the government then increases taxes to remove money from the people and taking the surplus to pay down the deficit. This is not easy to refute and will be tried with the Biden administration. The government can increase the money supply to pay pay off college loans, the new green deal, infrastructure and any other projects approved by congress. The money supply has increased from $5 trillion in 2000 to $19 trillion today and inflation has stayed below 2%. Why not keep going.