Trump\u2019s war is exposing the truth in one of the central insights of modern monetary theory (MMT).<\/p>\n
The United States is not running out of dollars as a result of Trump's war. It is, it has now been revealed, instead running out of weapons, production capacity and military resources.<\/p>\n
That distinction matters because it challenges one of the biggest myths in economics.<\/p>\n
Conventional economics tells us governments are limited by money. MMT says something very different. A government that issues its own currency can always create the money it needs. The real constraint is whether the economy has the people, skills, factories, materials and technology required to deliver what that money is meant to buy.<\/p>\n
Trump\u2019s request for another $65 billion from Congress to fund his war illustrates the point perfectly. More money cannot instantly produce missiles, factories or skilled workers. Real resources always come first.<\/p>\n
The same lesson applies far beyond war.<\/p>\n
The NHS does not simply need bigger budgets. It needs doctors, nurses and equipment. Housebuilding needs land, labour and materials. Climate policy needs engineers, factories and infrastructure.<\/p>\n
That is why governments should stop asking, \u201cWhere will the money come from?\u201d and start asking, \u201cDo the resources exist to deliver what we need?\u201d<\/p>\n
In this video, I explain why Trump\u2019s war has unintentionally demonstrated one of MMT\u2019s most important insights, and why that changes how we should think about inflation, public spending, economic policy and the role of government.<\/p>\n