Why MMT does not work outside of wealthy developed economies (why it fails in low net-worth emerging economies).
- Degree of monetary sovereignty is directly related to National wealth. Which we will keep coming back to.
- Claiming food & energy sovereignty is best said to mean that without food & energy, or trade, entire countries would collapse overnight—again
National wealth matters.
- Production comes first thus the act of printing does not add value. Since the act of printing fundamentally does not add value, we once again came back to National wealth.
- A federal ‘job guarantee’ is not a job. Its ‘fakeworkfare’.
Meaning no production nor wealth is being added to the National wealth while more bonds are being created along with less services (and less demand for the currency). Cue higher rates (and welcome to Venezuela).
- MMT can only apply (and negative effects are masked) in countries with high National wealth.
Best viewed as altitude above ground when a person jumps out of a plane with no parachute trying to prove humans can fly. If altitude is low (1000′) the person hits the ground very quickly and theory proven wrong. If a person jumps at a high altitude (60,000′) it will be awhile before the impact with the ground proves the theory—that humans cannot fly—wrong.
Same goes with MMT. No matter how high, or how much wealth an economy has, eventually the result will be the same. There will be a big thump with the ground. Undesirable to say the least.
While they can make many cute stories why the 1000′ jump did not work; and then also make the same stories from 60,000′ up saying the entire time: ‘Look ladies and gentleman, humans can fly! No one can refute how beautiful and sound the theory is! Sign up now and you too can fly, hurry! Our airplanes are standing by!’
That is what Magic Money Tree sophistry does. They are selling you first class tickets to go skydiving without a parachute because humans can fly!!!