{"id":79213,"date":"2024-12-20T07:58:11","date_gmt":"2024-12-20T07:58:11","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=79213"},"modified":"2024-12-20T07:58:11","modified_gmt":"2024-12-20T07:58:11","slug":"modern-monetary-theory-really-does-describe-how-government-funding-works","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2024\/12\/20\/modern-monetary-theory-really-does-describe-how-government-funding-works\/","title":{"rendered":"Modern monetary theory really does describe how government funding works"},"content":{"rendered":"<p>I have <a href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2024\/12\/20\/can-democracy-survive-the-amounts-musk-can-spend-on-politics\/\" target=\"_blank\" rel=\"noopener\">already noted this morning<\/a> the imminent shutdown of the US Federal government as a result of Trump and Musk demanding that the US Congress block spending plans for 2025.<\/p>\n<p>Now we know that<a href=\"https:\/\/www.ft.com\/content\/c42ec427-307a-4fe2-a4b7-9a1fce2de30a?segmentId=b0d7e653-3467-12ab-c0f0-77e4424cdb4c\" target=\"_blank\" rel=\"noopener\"> Trump's own plan<\/a>, which was put to the House last night, has also been rejected. Mayhem will ensue. A pattern for the next four years is being set.<\/p>\n<p>However, I wanted to note some other dimensions to this.<\/p>\n<p>First, the House is effectively refusing to increase the level of US national debt. Doing so, it is acknowledging that US debt funds the government.<\/p>\n<p>It is also acknowledging that money is created by the national debt.<\/p>\n<p>And it is recognising that it is government-created money and not tax that funds US government spending.<\/p>\n<p>In other words, it is noting that the US government works as modern monetary theory describes, just as the UK government also does.<\/p>\n<p>There is little comfort in the mess that Trump is already creating, but this is nonetheless worth noting.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I have already noted this morning the imminent shutdown of the US Federal government as a result of Trump and Musk demanding that the US<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2024\/12\/20\/modern-monetary-theory-really-does-describe-how-government-funding-works\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,174],"tags":[],"class_list":["post-79213","post","type-post","status-publish","format-standard","hentry","category-economics","category-modern-monetary-theory"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/79213","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=79213"}],"version-history":[{"count":1,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/79213\/revisions"}],"predecessor-version":[{"id":79214,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/79213\/revisions\/79214"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=79213"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=79213"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=79213"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}