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The Fiscal Deficit, Modern Monetary Theory and Progressive Economic Policy
by Andrew Jackson
The Bullet, Socialist Project, July 14
https://socialistproject.ca/2020/07/fiscal-deficit-mmt-progressive-economic-policy/

 . . . "MMT rightly challenges the orthodox idea that government
budgets should be balanced and that deficits should be incurred only
to fight deep depressions when low interest rates no longer work. As
argued by Keynes in the 1930s, deficits will not crowd out savings and
private investment if the economy is operating below capacity. Indeed,
public investment financed by deficits can “crowd in” private
investment. And public investments financed through deficits and debt
can create a more robust economy and infrastructure, leaving future
generations with greater wealth and opportunities. Keynes, unlike the
“bastard Keynesian” wing of mainstream economics, looked forward to
the day when the economy would be driven by productive public
investment with no need for the state to borrow from the rentiers
living off interest income.

"In short, the key ideas of MMT are not so much modern as a return to
the radical Keynes and the left Keynesian tradition. Both hold that
conventional policy results in economies running well below capacity
much of the time, and both reject the mainstream view that the
macro-economy should be primarily managed through monetary rather than
fiscal policy.
 . . .
"In short, MMT, based on the theoretical legacy of left Keynesian
economics, offers us a way forward, but it does not free us from the
very real constraints of capitalism."

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