Modern Monetary Theory and government accounting

Cullen Roche  |  August 13, 2019

“MMT makes a mess out of this stuff. They claim to be accounting experts, but they totally botch the idea of ‘net saving.’ … We should be very clear about this - government bonds are not net financial assets in the aggregate. They are net financial assets for the private sector. But the private sector is necessarily liable for the government sector. … We form the government as a separate entity for legal purposes. But that entity is very much funded by the private sector. It isn't a piggy bank that you can just tap into when you want.”

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