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This is rather MMTers poking some fun at other supposed macro experts who don't actually have a correct clear grasp on how money or government funding works. He kept tripping over his words because his intuition was leading him astray, so "government prints money and then lends it" kept coming out. The correct, clear, simple answer is that government prints money in the form of bonds every day, and swaps them with central bank reserves where appropriate (like swapping between $100 bills, $1 bills, and quarters where appropriate, perhaps when trying to ride the bus or go to the arcade). The only clash is that people have pre-existing non-sensical stricter definitions of the word "money", so MMT generally prefers to sidestep a language intuition issue and just refer more broadly to what matters, financial assets.
It's already been nearly a decade since mainstream economists stopped trying to say MMT is wrong, and switched to "we knew that already", so I guarantee you MMTers aren't saying something as obviously wrong as "we can print as much money as we want without worrying about inflation". And it's MMT who has pushed better & better verbal explanations to laypeople of all those interlocking balance sheets in IGI's linked NYFed diagram.
This might also be because talking with MMT'ers is often a constant exercise of dealing with motte-and-baileying with risible radical claims and commonsense stuff described in somewhat different words from usual.
It may be the case when dealing with random commenters on the internet, but that kind of goes for everything right? I'm talking about like Paul Krugman who kept being embarrassed when going a few rounds against MMT economists over the years, and he kept exposing that he couldn't shake some fundamental incorrect starting points like a loanable funds framework.
As for different words, that's definitely a communication hurdle where people feel like they're not speaking the same language. To me it seems to be warranted to actually cut to the heart of what matters with some different terminology, to avoid some pitfalls with peoples' everyday colloquial versions of money, lending, borrowing, etc., and talk about what is actually happening with each balance sheet operation.
But it has to be said that people in finance and central banking pretty much immediately understand MMT's descriptions in a matter of minutes. After MMT started gaining popularity, there were multiple central bank research papers put out saying the same types of things, to help educate the field and wider public, and to help correct classic misconceptions still being taught in economic textbooks. The only people who really struggled with it were mainstream academic economists, who had to try to translate real world explanations into their toy model terms. 'So you're saying that in your version of my model, my drawn curve here should be basically a vertical/horizontal line pushed out over here?'
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Bingo.
I looked deep into MMT many years ago to find out what descriptive claims they made that were different from mainstream economics. I found three:
(1) Confidence in fiscal policymakers to e.g. time fiscal policy to control demand.
(2) An approximately flat SRAS curve, though many of its advocates don't realise this and haven't read about SRAS curves, because they have never read an intro macro textbook. In plain English, it's like an on/off model of how increased demand affects prices: until full employment, stimulus is more or less non-inflationary. Mainstream Keynesians used to believed this.
(3) Various Old Keynesian claims about the monetary policy or interest rate changes, though this is not universal among MMT advocates.
That's it. Everything else is motte-and-bailey, rhetoric, distractions which have performed the useful function of hiding MMT from most rigorous scrutiny, or uninteresting errors that some advocates of MMT make when they mix up normative with descriptive claims about how e.g. the Treasury works.
I'm not an economist and I don't understand much about it, so I wish you and @LateMechanic would have a discussion to illuminate this a bit. He seems to be pro-MMT and you seem to be against. You two have any thoughts on the other's view?
Such a discussion would be hard. MMT advocates tend to see themselves as primarily stating a profound critique of standard theories of public finance that is true as a simple matter of institutional facts + accounting, whereas I see them as warming up a few ideas that almost all Keynesians abandoned long ago. So the very terms of the debate would likely be messed up. This has been my experience debating MMTists in the past, e.g. they say, "Do you admit X?", I show that X has been standard econ for 100+ years, and they say "Oh, so you admit X!", I say "Of course", and then they say, "Well, this politician says otherwise, and he did PPE at Oxford, so economists must teach otherwise!"
It seems like your deep dive was not into primary MMT sources, but rather critiques from the outside? Your post sounds like you were just following the attempted dismissal from like a Sumner/Rowe/Noah Smith, at least from when I was following along 10 years ago.
If you were reading anything from the main MMTers themselves, you would surely have seen them counter these dismissals a hundred times. You would surely have seen that the main thing they talk about is about how fiscal policy already manages the macro system with automatic stabilizers for the last 80+ years, not requiring congress to manually fiddle with tax rates all the time to respond to demand and inflation. And you would have heard Wray say in every book or every talk that we could certainly get some demand-pull inflation before true full employment if simply pumping fiscal stimulus via general spending, which is a demonstrated lesson from the 60s keynesians. If those were 2 of your own 3 conclusions from an actual deep dive, and you weren't just re-presenting a critique you heard, I don't really know what to say.
I do agree that a full discussion is a bit pointless and frustrating. In general I'm perfectly content with how economists, central bankers, policymakers, all the way on down to average internet commenters, have shifted a decent amount in the last 15 years toward the MMT explanations. From what I see there's a lot less of the really goofy misconceptions (we're borrowing from china, we're broke, central bankers are wizards, interest rates control the price level, banks are lending out reserves, QE is printing money, etc). So to the extent that the dismissal of MMT is "we already knew that" or "I don't agree with their progressive policy prescriptions", it works for me.
There's nuance between "fiscal policy to control demand" and "manually fiddle with tax rates all the time". I never attributed the latter to MMT advocates. Please read this comment again: https://www.themotte.org/post/995/culture-war-roundup-for-the-week/210377?context=8#context
"An approximately flat SRAS curve". Please read my comment again: https://www.themotte.org/post/995/culture-war-roundup-for-the-week/210377?context=8#context
As for your last paragraph, sorry: I am not going to go through the dynamic I mentioned in the comment you responded to, when I have literally explained how I have waded through the same incredibly tedious rhetorical strategies (strawmanning, motte-and-bailey etc.) from MMTists in the past. Unfortunantely, nothing you have said makes me expect discussing the issue with you to be any different. I am not going to go through dismantling a whole set of unattributed strawmannings again. Based on how you're trying to frame things, I could show chapter-and-verse that every economists believes X, but you could still say, "Ah, but here's a politician who said..." Can you try to empathise how tedious that would be for me?
But please read my comment again, especially before you make assertions about whether I have read things or read them carefully.
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MMT covers a wide range of actual policy positions, some reasonable and some not. But in general it’s a retarded third world conspiracy that leads to stuff like Turkish and Argentine hyperinflation directed by idiotic leaders who reject any link between inflation and borrowing, not merely in theory but in practice. The unique situation the US and to a lesser extent other Anglo countries are in with regards to the effect of public borrowing on inflation is unique because of their balance of trade, foreign investment, very large service sectors and so on, just like Japan’s weird dynamic, and doesn’t prove MMT in any genuine way.
The core bulk of MMT is descriptive, showing how money, banking, and government finance work, from a fundamental logic & accounting level of interlocking balance sheets. When armed with these correct fundamentals, it's a lot easier to see where actual tradeoffs and choices apply, and to avoid being upset by goofy incorrect gut notions and suffering from various types of cognitive dissonance. If anyone even talks about "public borrowing", they likely still don't grasp what is even actually happening in the accounting plumbing.
The policy prescriptions which some MMT proponents tack onto that descriptive project is probably a mistake in my view. But most of them think that once you understand the real constraints, then some choices (like implementing a Job Guarantee / Employer of Last Resort program) are so obvious and moral that they should always be pitched at the same time, and ended up with a largely progressive following who wanted more of that. You can take or leave those prescriptions though, it doesn't make the descriptive project incorrect.
There is not a single MMT economist who is confused that different countries & currencies have different challenges. By the 2010s when they were starting to get traction after a decade, they probably knew more about it than almost anyone, because this was such a common early dismissal attempt 'yeah maybe they know about the US, but circumstances are special there'. The core logic still works in any situation, and understanding real constraints vs. imaginary or self-imposed constraints is the key thing to get right. There are definitely real constraints and tradeoffs in all cases.
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