I am aware that Heather Stewart's article in the Guardian, in response to Zack Polanski's speech yesterday, has grossly misrepresented modern monetary theory.
She said:
But Polanski called for a much more radical approach – of scrapping the OBR altogether in favour of what he called “fiscal referees”, who would give a general ruling on whether the government's plans looked sustainable, rather than a pass or fail against narrowly drawn rules.
That would be a significant shift, and might cause market anxiety, but steers well short of modern monetary theory, which Polanski has previously been accused of flirting with, and which suggests governments can simply print money.
Apart from Heather Stewart clearly misinterpreting the speech by conflating these two issues, she is also grossly wrong in her representation of MMT. I have sent a letter to the Guardian this morning pointing this out.
There is, of course, no guarantee that the Guardian will publish my letter. Others may wish to join in. One of us might succeed.
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Once upon a time, a politician would campaign to erase a government department that seemed to have out lived its purpose. The politician would claim to be returning to a more simple form of government that had previously existed. There was nothing to fear. This was called conservatism and certainly not radical. I don’t know the purpose of the OBR. MMT makes the case that it is completely irrelevant. We have become so devoid of our own self confidence that we can’t live without the rubber stamp approval of a government body. No thank you.