RE: MODERN MONETARY THEORY - can anyone explain major differences between MMT and current monetary system?
Regards @crypto.piotr.
The MMT suggests that the fiscal deficit must be as high as necessary to maintain full employment.
The state will always be able to increase the internal debt as many times as necessary through the issuance of bonds, since it is possible to add other factors of internal production to the mathematical formula, and thus compensate for this "supposed" deficit.
In this way, maintaining employment can achieve greater production, increase GDP and thus compensate for debt.
Many times the surpluses of any sector of the economy are taken and channeled to compensate for the deficit of some other sector and of internal indebtedness.
It should be noted that this theory only applies to the administrations of countries that own their sovereign currencies, so it is an internal procedure to increase the public debt through the issuance of bonds. For this reason, this theory could not be applied per se to business or personal finance.
Your friend, Juan
Thank you for your amazing comment @juanmolina
I seriously wonder how MMT would deal with inflation (losing fiat currency value). After all inflation is nothing but 'hidden tax', that can destroy economy and businesses. Just like tsunami would.
Also Im curious how countries following MMT monetary system would deal financially with those who stick to traditional/current ways. Something would surely have to change.
Yours
Piotr