Welcome to the Age of Modern Monetary Theory: It’s Turning Conventional Economics Upside Down

Who cares about the deficit? Biden’s advisers embrace a hot new economic theory — whether they meant to or not

by Andrew Kordik

Congress has authorized $6 trillion in deficit spending to defeat the coronavirus. That’s more than the United States spent fighting World War II, when $4 trillion of government spending released the country from the clutches of the Great Depression.

Naturally, politicians and pundits debate whether the amount is excessive. But implicit in their seemingly routine deficit debate is a remarkable shift: Inflation has replaced debt — the old stalking horse for defeating progressive legislation — as the primary concern with deficit spending.

It’s a subtle change, with profound consequences. And it augurs the rise of a revolutionary approach to political economy, Modern Monetary Theory (MMT), as the dominant paradigm in the politics of money.

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